Executive Summary

January 30, 2026

Predictive Churn Model for customer retention in SaaS companies

Ana Flávia de Toledo Serrain; Daniel de Souza Valotto

Summary prepared by ResumeAI, an artificial intelligence solution developed by Instituto Pecege focused on synthesis and writing.

The objective of this research was to develop a predictive churn model for “Software as a Service” (SaaS) customers, which would identify cancellation risk patterns to optimize the performance of “Customer Success” teams and strengthen retention strategies. The study aimed to create a tool that integrated multiple indicators of customer behavior and satisfaction, providing a structured database for proactive decisions and for mitigating recurring revenue losses, a critical factor for the sustainability of subscription-based businesses.

The transition to subscription-based business models has changed the relationship between companies and consumers. As Steinman et al. (2017) illustrate, the paradigm has shifted from owning a good to continuously accessing a service, requiring a focus on delivering constant value to ensure loyalty. In this scenario, a business’s sustainability depends on its ability to build lasting relationships (Baxter, 2020), making retention a more important strategic pillar than acquisition. This logic is prominent in the technology sector; the SaaS model has become consolidated. As defined by Satyanarayana (2012), SaaS offers software as a cloud service, with remote access and recurring payment, which allows for continuous improvements (Melo et al., 2007), but also facilitates customer cancellation.

In this context, the customer relationship begins with the sale (Tzuo, 2018), which led to the emergence of the “Customer Success” area. The “Customer Success Manager” (CSM) is responsible for ensuring that clients achieve their goals when using the solution (Damin, 2019), being essential to mitigate “churn” – the cancellation of contracts and the consequent loss of revenue. The growing expectation for continuous value makes the role of “Customer Success” a crucial factor for loyalty and contract retention (Santos, 2021), aligning customer success with company growth (Rigonatti, 2024).

The relevance of retention is corroborated by market data. The research “State of SaaS LatAm 2024” (2024) demonstrated a strong correlation between the growth of Annual Recurring Revenue (ARR) and customer satisfaction, with the most successful companies registering churn rates close to 1%. In light of this, predictive churn models emerge as tools to anticipate risks and guide preventive actions (Gold, 2020), analyzing historical data to identify patterns that precede cancellation. Although the phenomenon of churn is studied in B2C contexts, there is a gap in analyses applied to the B2B environment in the SaaS sector (Çalli and Kasim, 2022); the impact on recurring revenue and customer lifetime value (LTV) is more significant.

This study aims to fill part of this gap by developing a model that combines different data sources for a holistic view of cancellation risk. The approach integrates engagement metrics, satisfaction, technical support, and the CSM’s qualitative assessment, recognizing that “churn” is a multifactorial phenomenon. The model aims not only to predict but to provide diagnoses that allow “Customer Success” teams to act assertively and personalized, strengthening the customer relationship and the organization’s financial health.

The research was conducted with a descriptive approach of a mixed nature, combining qualitative and quantitative data for an in-depth understanding (Creswell, 2010). The design was a Field Survey, focused on analyzing historical and behavioral customer information to identify patterns (Sampieri et al., 2013). The collection of secondary data occurred between April and May 2025. Five categories of data sources were used: 1) internal records from a Brazilian technology company (cancellation reasons, NPS, accesses, support calls); 2) market “benchmarks”, such as reports from Agile Growth Labs (2025) and Patrick Campbell (2020); 3) reports from consultancies and surveys, such as the “Report SaaS Brasil 2023” and “SaaS Survey Results” (SaaS Capital; KeyBanc Capital Markets, 2022); 4) specialized literature in the field; and 5) third-party surveys, such as “Customer Insights 2024” (Zenvia et al., 2024).

The sample was composed of secondary data, with emphasis on the database of the partner technology company: an organization with over 30 years in the market, 15,000 active clients, and 3,000 employees, operating in the legal and business segments. Its high level of operational maturity allowed for an in-depth analysis of patterns associated with “churn”. The diversity of sources was fundamental to minimize biases and contextualize the analyzed metrics. The confidentiality of the information was guaranteed.

Qualitative data, such as customer comments, were subjected to content analysis. Quantitative data underwent descriptive statistical treatment, including standardization and frequency analysis, using Microsoft Excel (Levine et al., 2008). The calculation of “churn” risk was performed through an aggregated score, obtained by the weighted sum of the selected indicators, resulting in an index classified into risk bands (low, medium, and high). The study followed applicable ethical guidelines, using an Informed Consent Form (TCLE) when necessary.

The analysis was structured in three stages: survey of the SaaS scenario, development of the predictive model, and analysis of the model’s application in the CSM’s routine. The “Report SaaS Brasil 2023” revealed that 89.7% of Brazilian SaaS companies operate in the B2B model, but only 9.4% had retention as a strategic focus. The same study showed that sales-driven growth strategies present the lowest “churn” rates (4.7%), in contrast to community-driven ones (8.2%). The Agile Growth Labs (2025) survey indicated an average monthly “churn” rate of 4.1%, differentiating between voluntary (3.0%) and involuntary (1.1%) cancellations. Analyses by ProfitWell (Campbell, 2020) and SaaS Capital (2022) indicate that healthy SaaS companies maintain annual “churn” rates below 5% in the B2B market. The “Customer Insights 2024” survey (Zenvia et al., 2024) showed that 67% of organizations with an LTV greater than one year have a consolidated CS or CX area for more than two years, reinforcing the correlation between the area’s maturity and customer longevity.

Based on this scenario, the predictive model was built on four indicators with distinct weights. The first, Human Indicator, received the highest weight (30%), reflecting the importance of human interaction. This qualitative indicator assesses the relationship with the client from the CSM’s perception, classifying it as “engaged”, “at risk”, or “with mapped risk”, functioning as a calibrator that captures nuances not revealed by raw data. The second, Net Promoter Score (NPS), with a weight of 20%, measures satisfaction and loyalty (Reichheld, 2003). The model considers a warning sign when a client remains in the risk zone (NPS from -100 to 0) for two consecutive months. The third indicator, Engagement, with a weight of 30%, assesses platform usage, considering variables such as days without access and number of active users, comparing the behavior of the last three months with the previous period. A consistent drop in engagement is a strong predictor of silent churn.

The fourth indicator, Support Calls, with a weight of 20%, analyzes the quantity and nature of open calls. A high volume of issues may indicate wear and tear in the experience, although the act of opening a call also demonstrates engagement. The final risk score is calculated by summing the weights of the indicators in alert status, classifying the customer into three tiers: Low Risk (0-20%), Medium Risk (21-50%), and High Risk (above 50%). For example, a customer with an NPS in the risk zone (20%) enters low risk. If they express dissatisfaction in a meeting, the Human Indicator is triggered, adding another 30% and elevating them to medium risk (50%). If, subsequently, engagement decreases, another 30% is added, totaling 80% and classifying them as high risk.

The model validation was performed with historical data from 2024, using a sample of 26 strategic clients. The results demonstrated high effectiveness: of the clients who performed some type of cancellation (34.6% of the sample), the model correctly identified 77.8% of them as being at medium or high risk. A crucial finding was that 100% of clients who canceled a service showed the low engagement indicator as a warning sign, confirming the relevance of its 30% weight. Similarly, the Human Indicator was present in 100% of cancellation cases, validating its importance. The 22.2% of unpredicted cancellations were related to interactions with other areas of the company, pointing to the need for a more integrated internal communication flow.

Among the customers who did not cancel (65.4% of the sample), the model correctly identified 17.6% as being at risk, allowing the implementation of preventive action plans that reversed the dissatisfaction situation. The analysis also revealed that NPS, although useful, has limitations in predicting partial cancellations, as the perception of one user may not reflect problems in another sector of the same company. This suggests the need to segment the application of the NPS survey for key users. The model proved to be a robust tool for directing the CSM’s attention, prioritizing high-risk customers and proactively monitoring medium-risk ones.

The predictive model proved to be an efficient tool for identifying customers at risk of “churn”, especially in strategic accounts; the combination of quantitative data and human insight is fundamental. The research highlighted that indicators such as low engagement and the CSM’s qualitative assessment are the strongest predictors of cancellation, justifying their high weights. In practice, the study offers a structured instrument that allows “Customer Success” managers to optimize resource allocation, prioritize retention actions, and base decisions on a complete data analysis. By strengthening retention capacity, the model contributes to the financial health and stability of SaaS companies. Additionally, by proposing improvements in customer management, the research aligns with SDG 9 (Industry, Innovation, and Infrastructure).

Despite its effectiveness, the model has limitations, such as its focus on high-value clients, which may restrict the generalization of results, and the inherent subjectivity of the Human Indicator. Future research could explore the inclusion of new indicators, such as default, test more sophisticated algorithms, and evaluate the model’s applicability in different sectors or with customer profile segmentation. It is concluded that the objective was achieved: it was demonstrated that the proposed predictive model, which combines quantitative and qualitative indicators, is a relevant and effective tool for identifying churn risk patterns, supporting strategic retention decisions, and strengthening the relationship with high-value clients in the SaaS segment.

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AGILE GROWTH LABS. 2025. SaaS churn rate benchmarks 2025. Available at: https://www. agilegrowthlabs. com/blog/saas-churn-rate-benchmarks-2025/. Accessed on: May 5, 2025.
BAXTER, Robbie Kellman. 2020. The forever transaction: how to build a subscription model so compelling, your customers will never want to leave. 1st ed. McGraw-Hill Education, New York, NY, USA.
BUILDERS 2 BUILDERS. 2023. Report SaaS Brasil 2023. Available at: https://blog. vindi. com. br/saas-brasil-2023/. Accessed on: May 5, 2025.
CRESWELL, John W. 2010. Research design: qualitative, quantitative, and mixed methods. 3rd ed. Artmed, Porto Alegre, RS, Brazil.
ÇALLI, Levent; KASIM, Sena. 2022. Using Machine Learning Algorithms to Analyze Customer Churn in the Software as a Service (SaaS) Industry. Academic Platform Journal of Engineering and Smart Systems. Available at: https://dergipark. org. tr/en/pub/apjess/article/1139862? issueid=72618. Accessed on: Dec. 16, 2025.
DAMIN, Hiram B. 2019. Customer Success: the success of companies focused on customers. 1st ed. DVS Editora, São Paulo, SP, Brazil.
FORRESTER. 2023. Net Promoter Score℠ (NPS) essentials. Available at: https://www. forrester. com/report/net-promoter-score-tm-nps-essentials/RES60925. Accessed on: Sep. 8, 2025.
GOLD, Carl. 2020. Fighting churn with data: the science and strategy of customer retention. 1st ed. Manning Publications, Shelter Island, NY, USA.
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