Why did churn rise after our price change?
Conceptual Case study. This is an editorial illustration of how RAZOOM is designed to approach the problem, written by the RAZOOM team. It was not produced by a working system, and the figures in it are illustrative.
The Case outcome at a glance
If legacy-price customers show the same rise in churn, price is not the main cause and rolling it back would lose revenue without fixing churn.
- Next action
- Compare churn between legacy and new-price cohorts before deciding anything about price.
- What could change it
- Legacy-price customers churning at the same higher rate
Original problem
A subscription business raised prices by 15% in March. Monthly churn rose from 2.1% to 3.4% over the following quarter. The team wants to know whether to roll the price back.
Why the question is hard
- The timing makes the price change look like the cause — but several things changed at once.
- Rolling back is costly and may not fix the problem if the cause lies elsewhere.
- Churn is noisy; a quarter of data can mislead.
How RAZOOM would reframe it
How much of the increase in churn is caused by the price change, and would reversing it recover more revenue than it costs?
Separating cause from coincidence comes first. The roll-back decision depends on the size of the causal effect, not on the correlation.
Problem graph
Decision
Roll back the price?
Method: Decision threshold analysis
Subproblems
Causal effect of price
Method: Causal inference
Competing causes
Method: Hypothesis Ecology
Net revenue impact
Method: Unit-economics model
Drivers
Cohort behaviour
Method: Time-series analysis
Feeds: Causal effect of price, Net revenue impact
Onboarding change
Method: Causal inference
Feeds: Competing causes
Competitor launch
Method: Market research
Feeds: Competing causes
Selected methods
- Causal inferenceEffect of price
- Customers on legacy pricing form a natural comparison group.
- Time-series analysisCohort behaviour
- Separates seasonality and trend from the March change.
- Hypothesis EcologyCompeting causes
- Keeps the onboarding change and a competitor launch in play.
- Unit-economics modelNet revenue impact
- Higher price on retained customers may outweigh extra churn.
Evidence needed
- Churn by cohort, split by legacy versus new pricing
- Release dates of the new onboarding flow
- Exit survey reasons before and after March
- Competitor launch timing and pricing
What could change the decision
- Legacy-price customers churning at the same higher rate
- Churn concentrated in users who joined after the onboarding change
- Revenue per retained customer rising more than churn costs
