What You Need To Know About The Churn Rate And How To Fight It


Churn Rate. But many first time SaaS merchants overlook churn or don’t even know what churn is. We will explore the ins and outs of churn and tell you how to fight it. What is churn rate? In a perfect world, churn wouldn’t exist.

"At current churn rate, 75% of the S&P 500 will be replaced by 2027."

Mark Birch

“At current churn rate, 75% of the S&P 500 will be replaced by 2027.” - Innosight. Creative Destruction Whips Through Corporate America ” (via peterspear ) Or as I would state, the evidence of a healthy economy. economy innovation creative destruction business s&p500

"With attrition rates for many apps so high, reducing your churn rate can boost growth as much as."

Mark Birch

“With attrition rates for many apps so high, reducing your churn rate can boost growth as much as increasing the number of people who download your app.” - Why Engagement Trumps Growth (via datainsightsideas ). In other words, ignore churn at your own considerable risk…. SaaS mobile mobile apps churn metrics business attrition rates

SaaS CEOs: Measure Customer Engagement – Increase Conversions & Lower Churn

For Entrepreneurs

Building for Success SaaS Sales & Marketing Machine Startup Help churn churn rate Cost of Customer Acquisition customer engagement SaaS business SaaS churn SaaS churn rate SaaS customer engagement saas marketing SaaS sales SaaS VCThe goal of a SaaS CEO should be to increase the profit they make from each customer (LTV), and lower the costs in sales and marketing that it takes to acquire each customer (CAC).

Free Trial Average Conversion Rate and Other Metrics

Guy Nirpaz

Following Lincoln Murphy’s post on SixteenVentures.com (talking about conversion average rate for free trials, pricing pages or Freemium for SaaS or Web Apps), conversion rate average figures will do no good, as it doesn’t reflect the whole picture and usually lacking context.

2013 Pacific Crest SaaS Survey

For Entrepreneurs

We worked together with Pacific Crest, an investment banking firm with a specific focus on SaaS, to survey 155 SaaS companies on a variety of topics such as growth rates, CAC (cost to acquire a customer), gross margins, churn rates, etc. Business Model SaaS CAC churn

Your LTV Math is Wrong

Seeing Both Sides

Since I see a few common patterns of mistakes, I thought I'd add to the LTV literature and point out the top three reasons many investors roll their eyes when they see entrepreneurs present inflated, poorly constructed LTVs: 1) Your churn rate is understated. A monthly churn rate of 1%?

2015 Pacific Crest SaaS Survey – Part 2

For Entrepreneurs

This week I’m sharing the results from Part 2 of the survey where we compare application delivery methods, operational costs and gross margins, contract terms, churn rates, capital requirements and accounting methods. Last week I posted the results from Part 1 of our survey in which 300+ SaaS companies shared data on their growth and go-to-market strategies.

Don’t Be Gunshy Because You Dealt With Bucketheads The Last Time Around

Feld Thoughts

One of these was around churn – he asserted that one of the clear weaknesses of the business was the high churn rate. He didn’t have a high churn rate at all – in fact, his churn rate after a customer was paying for three months was minimal. Instead of articulating a powerful story about low customer acquisition costs with minimal downstream churn, he lead with “the worst problem with the business is our high churn rate.”

2014 Pacific Crest Saas Survey- Part 2

For Entrepreneurs

This week we dive into the results from Part 2 of the survey where we compare application delivery methods, operational costs and gross margins, contract terms, churn rates, capital requirements and accounting […]. Last week I shared the results from Part 1 of our survey in which 300+ SaaS companies shared data on their growth and go-to-market strategies.

The 5 Metrics You Need to Track for Your Subscription Business to Succeed

Up and Running

Churn and Churn Rate. Churn is the number of customers that cancel your service in a given month – when they leave, they’ve “churned out” and are no longer subscribing to your service. Churn rate is the percentage of customers that leave every month.

Hiring a data-driven modern marketing team

The Next Web

Conversions, leads and churn rate. Nick is the founder and CEO of Delmondo. He works with brands and startups improving their digital marketing and social media strategy, focusing on branded content.

“What the data reveals about how to make SaaS secret.

Mark Birch

A thoughtful analysis of the economics of price, cost, and churn across SaaS vendors. The decision on which distribution strategy to employ weighs heavily on choices made on price, cost of acquisition, sales & marketing expenses, and churn rates.

Lean Analytics in Polish and Some Great Posts on Analytics (from other people)

Instigator Blog

The Maximum Viable Churn Rate for a Startup. Yesterday I found out that Lean Analytics is now available in Polish! I’m still sort of amazed by it, so I figured I’d share it here with folks–and who knows, some of you may know Polish and be interested in analytics too.

3 Key Steps To Successful Customer Onboarding And Technology Adoption


Customer happiness is the lifeblood of any business — after all, happy customers mean lower churn rates, increased word-of-mouth marketing, a boost for internal morale, and so much more. by Allison Yount, Director of Customer Success at Scout RFP.

Visualizing the Interactions Between CAC, Churn and LTV

A Smart Bear: Startups and Marketing for Geeks

But it’s surprising to me how many companies with recurring/subscription revenue don’t understand the interactions between the elements that make up customer acquisition cost (CAC), churn and lifetime value (LTV). (Guest post by Gordon Daugherty.

Seven Great Startup CTO Posts so far in May


StartupCFO , May 6, 2010 Great look at important metrics for SaaS and the importance of churn rate Continuing my series of posts that I’ve been collecting that live at the intersection of Startups, Startup Development and being a Startup CTO. Here are a couple of the other collections: 16 Great Startup Posts from March , Startup CTO Top 30 Posts for April.

CTO 150

Analysing cohorts made easy

The Equity Kicker

CAC and payback period are key inputs into the financial model which works out how much cash a company will burn each month at a given growth rate, and therefore whether a company can get past key revenue milestones before they need to raise their next round.

Do You Value Customer Relationships as Much as You Should?

Inc Startups

One simple way to calculate customer lifetime value is average monthly spend per customer divided by monthly customer churn rate. So in this example, if the business could cut churn rate in half to 5 percent, it would double its customer lifetime value.

Recognising good growth

The Equity Kicker

High churn rates. High return rates. High referral rates. When I wrote last night about Growing the right way I said that startups should aim to grow sustainably.

Leading Indicators of Customer Churn, And What to Do About It


What you’re experiencing is customer churn. What is customer churn? Also known as “customer churn,” customer attrition is the loss of clients or customers using your service. If you’re unsure, you can learn how to calculate your churn rate here.

Is your Revenue Model accurate?


And of course, you have a retention assumption (1/ churn rate) for how much of your existing revenue you keep. Update your assumptions (key drivers in a model should always be on a separate and easy to update assumptions tab) to show the conversion rates that you experienced last year. Running last year’s traffic with the related conversion rates, ARPU and other key assumptions should replicate the new revenue you added last year.

SaaS Math: Activation, Retention and Churn


This week we’re talking about activation, retention and its polar opposite – churn. As you will see, churn and retention are the most important metrics to the long-term success of a SaaS business. Churn is the % of users / customers that abandon the service over time.

Boost Your SaaS Business Revenue With These 12 Strategies

Up and Running

Reduce churn. Churn is essentially your cancellation rate. The percentage of your paying customers that cancel is your churn rate. Obviously, a lower churn rate is better. Improve signup rates.

This Is Why You Should Start A Subscription Box Business


More importantly, a subscription business model enables you to manage the cash flow, upgrade your business planning and optimize metrics such as churn rates, the lifetime value of a customer, expansion, and more. by Stefan Pretty, founder of Subbly.

When Customers Make You Smarter

Steve Blank

And they realized that the use of the Tidepool software could reduce the device companies’ customer churn rate by at least 1%. We talk a lot about Customer Development, but there’s nothing like seeing it in action to understand its power.

The Beginner’s Guide to SaaS Conversion Optimization


Reducing churn rate. So you can more safely worry about fewer metrics on an eCommerce site, like increasing AOV or conversion rate (not that it’s easy to increase these). However it comes with its own set of challenges, like retention and churn. Churn.

Why Metrics Get Worse With Scale

Seeing Both Sides

Conventional wisdom suggests that the most important metrics for a startup - such as unit economics, cost of acquisition, lifetime value, churn rates - typically get better with time. Take growth rate as a simple one. Churn rates are another metric that can get harder with scale.

Metrics that matter to social platforms (Part 1/3)

Version One Ventures

On the flip side of engagement, we can look at churn as a measure of the number of individuals moving out of a collective group over a specific period of time. Churned users can be segmented as follows: Total Churned Users = New Churned Users + Old Churned Users.

How To Succeed As A Product Manager


These metrics can be obtained through analysing a conversion rate. Another kind of metric in this group is the churn rate which shows all the losses, e.g. in revenue, customers, etc. by Beata Green, Director of HeadChannel.

8 Smart and Practical Ways To Increase Your Small Business Profits

crowdSPRING Blog

Are they staying with your products/services for a long time or using for a short time and leaving (this is called “churn”). A churn rate is the percent of customers who terminate their relationships with your company in a specific period (a month, for example).

Treat Customers Based on Their Values

Guy Nirpaz

This principle would increase conversion rates from prospects and maximize penetration rates withing current customers. Business Insights customer acquisition cost Customer Life Time Value Customer value Increase Conversion Rate penetration rate potential buyer Response

What I’ve Learned About Venture Funding

Both Sides of the Table

But if you don’t – now you have many cynical VCs lining up critiquing your CAC/LTV ratios, your churn rates, your poor performing cohorts. VC funding. Our perspectives on the topic wax and wane with market cycles.

Managing The Operations Of Your Startup


According to an article published by Forbes, metrics that play a critical role in any startup management includes revenue run rate, average revenue per user, customer acquisition rate, churn rate, and operation efficiency. by Cameron Johnson.

The SaaS Certainty Premium


That’s why fixed rate mortgages cost more than variable. Assuming you have low churn rates (the rate at which subscribers cancel), you begin each month, quarter or year already knowing what a good portion of your revenue will be. Its human nature to place a premium on certainty. Its also why we buy insurance and other items to manage risk. We just want peace of mind.

How To Calculate & Increase Customer Lifetime Value


Calculating Your Customer Retention Rate. If you’ve been doing business longer than a few months pay attention to your customer retention rates. In order to calculate your customer retention rate you need to know: Number of customers at the end of the period – E.

Getting Your Series A Mojo Back

Both Sides of the Table

Your churn rates are too high. You Need to Find Your Mojo A Chip On Your Shoulder A few years ago I wrote a blog post on entrepreneurs with a chip on their shoulders. I think it’s an important read.

Profit and Loss Responsibility


It may include profitability, but it more likely will focus on increasing growth, or reducing churn rate, or driving up engagement, or driving revenue, or any number of other possible goals. One question that I continue to get from many company leaders is whether or not product managers should be given P&L responsibility for their products.

The 7 Key Metrics Every Business Owner Should Monitor

Up and Running

For example, if you have an eCommerce website , you’ll want to measure unique visitors, referrals, bounce rate, and similar. If you’re running a subscription business , you’ll want to track churn rate, monthly recurring revenue, lifetime value, and so on. What Is Cash Burn Rate?

4 Business Metrics You Can’t Afford to Ignore

Inc Startups

Churn rate. A rising churn rate could be caused by a number of factors: Dissatisfaction with your products and services, new competition in your market, or even the coming end of a product or service cycle. Churn rate is a solid indicator of rising CAC and lower LTV.