Changes to churn recognitionOctober 5, 2016
Problem: FirstOfficer marks customer as lost immediately when charging fails. But what should be done when invoice is not created?
If loss of customer is probable and we do not mark the customer as lost, the MRR estimate will be temporarily too high.
If retention is probable and we mark the customer as lost, the losses will be temporarily overestimated.
Old Solution: Wait 14 days and then mark customer as lost.
Majority of missing invoices were caused by rare delays in Stripe invoicing. The invoices were eventually always sent. However, when FirstOfficer API was added, we now face an increasing amount of missing invoices where the loss of the customer is probable. 14-day wait period prevents you from getting the churn information in time.
New Solution: For non-Stripe invoices, wait 6 hours and then mark customer as lost. For Stripe invoices, wait 4 days and then mark customer as lost.
This solution should ensure timely detection for real losses and still prevent false alarms from temporary system malfunctions.