What is churn, and what are some common reasons customers churn?
What the interviewer wants to hear
- Defines churn as customers or revenue lost
- Mentions logo vs revenue churn
- Lists reasons such as poor onboarding, low value, champion loss, budget, competitor
- Notes that some churn is preventable with early action
Model answer
Churn is when a customer stops paying, either by cancelling or not renewing. We can measure it as logo churn, which is the number of customers lost, or revenue churn, which is the money lost including downgrades. Common reasons include poor onboarding, where the customer never reaches first value; low adoption, so the product feels like a cost rather than a tool; losing an internal champion; budget cuts; a better or cheaper competitor; and repeated product or support issues. Some churn, like a company shutting down, is hard to prevent. But much of it shows warning signs months before, such as falling usage or no executive engagement. The CSM's job is to spot those signs early and act.
Can you answer it under time pressure?
Take a timed easy round and get scored on every answer.
More easy Customer Success Manager questions
- In your own words, what does a Customer Success Manager do?
- Why is customer success important for a subscription business?
- How would you run a kickoff call with a new customer?
- A customer is upset and complaining on a call. How do you handle it?
- How do you build a strong relationship with a customer you have just been assigned?
- How do you say no to a customer request you cannot fulfil?
- Which tools have you used in customer success, and how did they help you?
- A new manager at a customer asks, "Why are we paying for this?" How do you answer?
- How do you make sure no renewal in your book of business catches you by surprise?