Quick summary: Discover how AI reveals relationship, pricing, and contract risks that traditional health scores miss—plus how to catch churn well in advance—with these churn mitigation tips.
On your CSM’s dashboard, everything looks fine. The customer’s usage is up. Their health score is green. The renewal appears to be locked in.
Unfortunately, that dashboard is mistaken. In six months, the account will be gone.
The issue is that traditional CS dashboards tell you what happened, rather than what is happening.
In a recent conversation with Karl Ortmanns, host of the Revenue Problem Solvers podcast, Lukas Alexander, vice president of customer success at ChurnZero, explained why this is a more urgent problem for CS leaders than ever.
It’s all thanks to AI, which is changing SaaS rapidly enough to break the most longstanding assumptions about renewals, health scoring, and churn risk.
Watch the conversation in full—or scroll down for the top churn mitigation tips that Lukas shared.
1. Partner your health scores with relationship data.
Historically, health scores based on behavior and usage data have presented one major challenge: by the time a score moves downward, the relationship has typically soured already. Relationship data, meanwhile, has been hard to capture systematically. However, AI-powered relationship scoring is changing this.
“With AI, you can really get into the relationship data,” Lukas says. “The tone, or the sentiment of relationships is where I’m seeing CS teams find earlier churn or risk signals, because in a lot of cases it shows up in the relationship first while your usage and health is still green.”
“The ChurnScore, or health score, or likelihood of renewal is a metric that CS teams should absolutely keep,” he says.
“But I’m also seeing a lot more CS leaders and revenue leaders looking into having a separate relationship score based on sentiment factors—such as whether your customers are talking about the right topics in meetings or mentioning competitors instead.”
2. Rescue your CSMs from reactive workflows.
There’s little point to making relationship signals your leading risk indicator unless you have someone in the relationship to catch and act on it. However, too many CSMs are still stuck absorbing reactive admin work that could be taken over by AI.
“Using AI agents to get CSMs out of the reactive work, so they can spend more time on workshops, business reviews, or value reviews, helps the relationship very early on,” Lukas says.
“CSMs should also spend more time connecting customers with peers, or being a thought partner for strategy. Those are the moments where proactive, live relationship-building that adds a ton of value to the partnership.”
Think about it like this: every hour from which you free your CSMs from reactive support is an hour that you can reinvest into the proactive work that surfaces risk early. It also frees your CSMs from the ‘subjectivity trap’ that colors their view of churn risk in the long run.
“What’s great about that is there’s no room for bias,” Lukas says. You can ask AI to take a model and look through the customer history, look through the customer context, and produce some reasons around why the customer might have churned. There’s less subjectivity and a lot more consistency.”
If this sounds all too familiar, audit where your CSMs’ time is going this quarter. If it’s still dominated by reactive tickets and manual churn tagging, your AI reallocation isn’t happening yet, which means your relationship visibility is still blocked.
3. Anticipate your seat-based pricing model becoming redundant.
Seat-based pricing—or one person using one license to do their job—doesn’t work now that AI has doubled, tripled or quintupled what one person can do.
“If you build AI products that double your customers’ productivity, what happens to your ARR?” Lukas asks.
“Seat-based pricing assumes human activity, but AI breaks that assumption entirely,” he says. “One person with AI can do what five used to do in a seat, which means your pricing model can collapse pretty much overnight.
Hybrid models, which keep seat and platform revenue and layer flexible AI usage revenue on top, are the current default, he says; not least because they’re an easy position to pivot from in a shifting market.
4. Coach your CSMs to coach their economic buyers.
In what ChurnZero CEO You Mon Tsang refers to as a retention bomb, any contract with an AI line item now gets extra scrutiny about whether long-term commitment is still the right call.
I think longevity is also influenced by the tech debt crisis that’s currently going on,” adds Lukas. “Right now, some companies need to sell because of the debt crisis going on; it’s not just AI.”
The combined effect is that more companies are growing cautious on long commitments generally, which means an extended timeline and approval chain for every renewal.
“I would encourage every revenue leader to check in with their team on the renewal process,” Lukas advises. “When does the process actually start? Are you starting the contracting side of it early enough? Are you asking about the signature process?
“Everyone is evaluating everything right now, so CSMs need to ask early about what customers’ evaluation processes look like? For example, are there any new signature decision-making processes in place?”
“CSMs need to be able to coach economic buyers to sell a multi-year renewal internally,” he says. “This is an overlooked skill, and CSMs or account managers need to lean into it now more than ever.”
5. Know the risks that your multi-year contracts are concealing.
As a retention band-aid that feels like a win to your CSMs and board alike, the multi-year deal is having its moment right now. However, Lukas counsels, locking in longer terms without addressing risk drivers tends to escalate the reckoning down the line.
“I don’t think the multi-year deal solves the actual problem at the core,” he says. “It’s a great tactic—an easy, quick way to get customers locked in—and a great way to show longevity in terms of the numbers you’re presenting to your board. But I don’t think it’s solving the problem at hand.”
The issue is that nothing about the length of a contract fixes a product-fit problem, a budget squeeze, a data gap, or a bad customer experience.
“This is CS and revenue leaders need to dig deeper under the surface,” Lukas says. “Are you having product fit challenges, or are customers struggling with macroeconomics and budget?
I would start by talking to some customers who are churning or already out of the door. I’ve seen several situations where the CS team had a reason why the customer churned, and the ex-customer had an entirely different perspective. Use that relationship to help your company grow and change and evolve.”
If you’re pushing for multi-year renewals, include a diagnostic aspect to examine customer fit or budget/macro pressure rather than simply defaulting to the contract as the fix. A churn postmortem process will also help you make better multi-year decisions.
Three ways to adopt these churn mitigation tips… starting this week.
Lukas closed the interview with three specific things for every CS leader to look into right away, starting with a question for your finance team.
“Ask your CFO: if AI doubles our customers’ efficiency or productivity, what actually happens to our ARR?” Lukas says. “If no one knows the answer, your pricing strategy is not built for the world that you’re actually in right now.”
Next item: go and find gaps in your pricing before customers do.
“Pull your three to five most at-risk renewals that you have coming up,” Lukas says. “Have an honest, internal conversation about whether your pricing model is still fair to those customers given how AI has changed things. Don’t wait for the customer to raise it; do it proactively. And, if your model feels wrong, these customers probably already know it.”
Finally, check your renewal mechanics.
“When are your CSMs, or your account managers, asking about the decision-making process or the evaluation process?” Lukas asks.
“I’m willing to bet lots of money that everyone is evaluating everything right now. Go and look at the mechanics of the contracting process in your renewal cycle, and whether they’re too late, or early enough—and whether you have the right tools to equip economic buyers to sell on your behalf.”
Want to learn more from Lukas? Start with his seven principles for protecting the revenue you earn.
