How to Calculate SaaS Churn

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visible.vcMost companies spend a great deal of time and financial resources on customer acquisition. This is particularly true in those early months and years of a startup. Acquiring new customers never gets old and watching your sales grow is a good indicator that you have a product that sells. But having a product or service that sells is not the only metric in determining the success of your company. Customer churn is another key metric to be concerned about.

What is Customer Churn?

Customer churn is the opposite of customer retention. It is losing customers to a competitor or experiencing non-renewal of your services. Churn rate is expressed as a percentage and can be determined over any consistent time period, like quarterly. The only remotely positive churn is when you lose customers that are costing you more than they are worth or who are a pain in your assets.

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photo CC by Anssi Koskinen

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