Last quarter, one of the CS teams at a portfolio company reviewed every churned account from Q1. They sorted each one into three buckets: regrettable, non-regrettable, or hybrid.
The hybrid pile was the biggest. And it bothered me. Surprised?
I did what I love doing and addressed the obvious elephant in the room.
"If you had to pick one - regrettable or non-regrettable - which is it?" Most of the hybrids became regrettable.
Late onboarding.
Unclear expectations set during the sales handoff. T
racking issues we'd flagged internally but never resolved with enough urgency.
One client told us we were "the best relationship-wise" but still left because we couldn't hit the metrics they set out to hit.
We defined that as hybrid. It wasn't even close to hybrid.
With one example, we had six months of runway to fix a known problem and didn't treat it like the fire it was.
The tendency to soften accountability by inventing a middle category that sounds analytical but teaches nothing. "Hybrid" is the business equivalent of rating your day a 7 out of 10. It's a cop-out that lets everyone off the hook and makes you feel nuanced instead of honest.
The worst part is that most teams doing this aren't dishonest. They're conflict-averse. "Hybrid" lets your CS manager acknowledge the problem without owning the solution. It lets the CS team off the hook. It gives the owner permission to feel like the problem is being addressed.
In short - It's a hedge dressed up as nuance. And it kills any chance of learning from a loss that was preventable.
So we killed the middle category entirely. Two buckets. That's it.
Non-Regrettable: the client moved states, got hit with a $50K tax bill, closed shop for reasons that had absolutely nothing to do with our delivery.
Regrettable: Anything else. If we could have set better expectations, flagged risk earlier, executed faster, or communicated more clearly, it belongs to us.
After reclassifying Q1 with this binary lens, our Regrettable Churn Rate was 68%.
Ugly right?
But for the first time, we had a single theme to fix: expectation-setting. Not five themes. Not a vague "do better." Not a bunch of “hybrids” that we don’t learn from.
Working Theory
Run these four questions on every lost account:
Did we set success metrics in writing within 7 days of kickoff?
Did the client see first value inside 14 days?
Did we flag risk at least 2 weeks before they canceled?
Could a process change or training have prevented the root cause?
One "yes" means you own it.
The number you get will probably make you uncomfortable. That's the point. Comfortable churn analysis produces comfortable inaction. Binary ownership produces the patterns you can actually fix.
The companies I work with that compress churn fastest aren't the ones with the best product. They're the ones who refuse to let a middle category absorb accountability that belongs to them.
