Announcing Churn and Retention Prediction in FunnelStory!

Introducing FunnelStory's Churn Prediction: a data-driven tool that uses AI/ML to identify and act on revenue and expansion opportunities. Gain insights into renewals, account health, and retention with minimal setup

By Arun Balakrishnan

Cofounder and Head of Product

Aug 07, 2024 • 4 min read

Today we are launching a new product - Churn Prediction. Before we get into what it does and how it works, let’s first look into what led us to build this. Over the last few months, a common trend started to emerge in our customer conversations - most organizations are struggling to get new logos. This was consistent across the board irrespective of size of the company, technology focus area, and target customer profiles.

Organizations are increasing focus on post-sales ARR

This is in line with the research from EBSTA where they saw 69% of reps falling short on average in 2024 and over 44% of deals being pushed back to subsequent quarters. All this is forcing organizations to focus more on post-sales. Traditionally, in most B2B enterprises, getting additional revenue from existing customers has a lower cost of sales than getting net new logos. According to this research from Pavilion, organizations are starting to focus on increasing their expansion ARR as a percentage of total new ARR and it hit 35% in FY-2023. However, identifying post-sales opportunities and converting them is not easy.

Let’s first look at how pre-sales opportunities are handled in most B2B organizations. B2B organizations who follow a traditional enterprise selling motion go through these stages - sales qualified leads, POC/POV, technical win, negotiations, and closed won. Each of these steps have measurable outcomes. For example, in the POC stage, there are clear success criteria defined and the team works towards meeting or exceeding them. Given that these steps take place over a few weeks, measuring these outcomes is also easier. Also, in the pre-sales motion, usually fewer individuals and teams are involved.

Compare that to post-sales - there are numerous individuals and teams involved - both from the seller’s side and from the buyer’s side. Different teams in the organization would have a different perspective on how the customer is doing - the customer’s health, their adoption, the customer’s use cases, the value the customer has experienced, etc. Each of the teams will then have a different evaluation of expansion and revenue potential. What organizations lack is a data-driven approach to revenue signals vs. being opinion-based.

Churn Prediction with FunnelStory

Building on top of what we do today for customer success teams and product adoption, we are launching Churn Prediction - a data-driven approach to identifying revenue and expansion opportunities.

Comprehensive view into your renewal funnel

Get a single view into all upcoming renewals, product and non-product data associated with these accounts, and the predictions.

Account-level diagnosis and predictions

From the top-level view, one can drill down into each account. As you can see, FunnelStory’s AI/ML models are able to give detailed predictions with in-depth analysis at an account level. The models are also able to look at “good” behavior and predict both retention and expansion opportunities.

Minimal configuration required

Traditionally, revenue prediction tools require the user to define what metrics matter, how it matters, and how much. These are static rules - they are one-size-fits-all and quickly outdated. For e.g. let’s say the user defines “less than 5 open tickets” as “good”. It wouldn’t take into account the fact that a customer that is disengaged and doesn’t use the product also doesn’t create any tickets.

FunnelStory’s AI/ML models, on the other hand, look at all aspects of a customer - both in-product and non-product data - to determine what factors matter. With FunnelStory, users need to just provide guidance and the AI/ML models do everything else!

Automatically determine factors contributing to predictions

FunnelStory automatically determines what matters for retention and churn and provides detailed information on what exactly led to the predictions.

This gives post-sales teams visibility on where each account is today, what matters for retention, and actionable insights into what can be improved.

We are excited and the initial feedback from customers and prospects show they are equally excited about this new product too! Read more about the technology driving this product in this technical blog from our co-founder.