There Is Such a Thing as Good Churn (And No, That’s Not as Horrible as It Sounds)

It will always sound wrong when I say it out loud, but there is such a thing as good churn.

And no, this isn’t me saying that when a customer churns, it’s time to pop champagne or throw a party. Loss is still loss. But there comes a very specific moment in a company’s journey when leadership has to take a hard look at who their Ideal Customer Profile actually is… and whether the customers they currently have still align with it.

That moment is uncomfortable. Necessary. And often unavoidable.

I see this most often with early-stage companies that are still finding product-market fit while actively evolving their product. What worked early on doesn’t always scale. What sold well at the beginning doesn’t always match where the business is headed next.

When Growth Forces Hard Decisions

Recently, I was talking with the CEO of a fast-growing early-stage company preparing to raise their Series A. Early on, they had strong success selling to a very specific type of customer. It worked, until it didn’t.

As the market shifted, so did their product and business strategy. Suddenly, they were sitting on hundreds of customers who no longer aligned with where the company was going.

They knew the reality: many of those customers would churn over time.

But knowing that doesn’t make it easy.

They were still responsible for managing that transition without letting all of those customers walk out the door at once, while also protecting Gross Dollar Retention, morale, and the narrative they were telling internally and externally.

That’s a tightrope.

Where Customer Success Gets Stuck in the Middle

This is where Customer Success often finds itself in an impossible position.

You’re being asked to:

• Build processes, playbooks, and teams for the future ICP

• While still supporting a customer base that no longer fits that future

• Without blowing up retention metrics, team confidence, or trust

Having navigated this exact scenario more than once, I learned pretty quickly that pretending everything is fine is the fastest way to make it worse.

Here’s what actually helped.

How I’ve Managed “Good” Churn Without Burning Everything Down

1️⃣ I stopped pretending every customer could be saved

Not every account is meant to be retained forever. Accepting that reality is step one. Fighting it just delays the inevitable and exhausts your team.

2️⃣ I segmented customers with brutal honesty

We got very specific about who was aligned with our future and who wasn’t. No fuzzy middle. No “maybe if…” categories. Just clarity.

3️⃣ I managed expectations, with and for my team

CSMs need to understand why certain decisions are being made. If leadership doesn’t provide context, teams fill in the gaps with fear and frustration.

4️⃣ I focused on managing exits, not just renewals

A controlled exit is still a win. Clear communication, thoughtful transitions, and respectful offboarding protect your brand long after the contract ends.

5️⃣ I kept reporting clean and controlled the narrative

If churn is coming, leadership needs to understand why. Data, segmentation, and clear storytelling matter more than raw numbers in moments like this.

Good Churn Isn’t About Celebration, It’s About Alignment

Acknowledging that there is “good” churn isn’t about celebrating loss. It’s about doing what’s right for the business and your people.

If your company is scaling, your product is evolving, or you’re redefining your ICP, Customer Success sits right at the center of that transformation. How you manage this phase sets the tone for what comes next.

Handled well, it creates focus, clarity, and momentum.

Handled poorly, it can implode trust, morale, and retention all at once.

If you’re navigating something similar right now, you’re not alone. And you’re not wrong for feeling conflicted about it.

I’m curious, if you’re managing through this today, what’s working? And what’s been harder than you expected?