I've seen a slew of new AI companies doubling down on analyzing usage data as the silver bullet for predicting churn. It’s an attractive idea—track how often customers log in and how many features they use, and you’ll magically, often with some proprietary algorithm, you'll know who’s at risk and who’s primed for expansion.
That’s not how reality works.
Usage data alone is riddled with false positives, often creating a distorted view of account "health." A customer heavily engaging with your product isn’t necessarily satisfied—they might be struggling and frustrated. A drop in product usage doesn’t automatically signal churn risk—perhaps the customer has completed implementation and is now deriving value without needing to log in frequently.
🚨 High Usage ≠ HappinessCustomers with high usage might actually be frustrated and, therefore, a risk. Why are they opening support tickets and emailing their CSMs?Are they engaging because they love the product—or because they can’t figure something out? What are they saying? What’s the context?
⚠️ Low Usage ≠ Churn RiskThe modern technology landscape isn’t about engagement for engagement’s sake—it’s about delivering value with minimal friction. ✔️If your product makes life easier, customers shouldn’t need to use it constantly.
✔️Instead of measuring time spent, measure outcomes.
✔️Instead of chasing logins, track behaviors.This requires context—something raw usage data doesn't provide.
📉 Usage ≠ RenewalsIn SaaS, high usage doesn’t guarantee a renewal.Renewals are driven by:
✔️ Perceived value (or lack thereof)
✔️ ROI & business impact
✔️ Alignment with evolving needs
To truly predict and drive retention, track the right contextual signals like:
✔️ Contract issues
✔️ Bi-directional responsiveness and closed-loop resolutions
✔️ Budget and procurement discussions
✔️ Expansion/contraction language
✔️Change order requests
Look for specific context beyond sentiment.
🔍 No Context, Limited InsightsUsage data doesn’t explain why something is happening. Why did usage drop?
⁉️ Did the customer stop needing what you sold them, or are they trialing a competitor?
⁉️ Have users given up on your solution and found a workaround?
⁉️ Is usage dropping in specific customer segments (e.g., corporate accounts)?
You won’t find these answers in product telemetry alone.
Companies that get this wrong focus heavily on usage metrics and then wonder why their churn predictions fail.
The ones that get it right combine usage data with contextual signals—the insights that explain the "why."
Real-world signals tell you how customers feel and what they need, not just which buttons they click and how often.
If your account management strategy is built purely on tracking usage and opinions, you’re looking at a puzzle with half the pieces missing.