In this cheat sheet we’re focusing on some of the ways we’ve been thinking about churn at ChartMogul.
Particularly around how to better classify churn, e.g.
- Pro-active churn (e.g. cancellations)
- Passive churn (e.g. user doesn’t update an expired card)
- “Happy” churn (the user finished using your product for the purpose they intended)
- Churn that isn’t really churn (e.g. a cancellation and refund within a money-back-guarantee period)
And also best practices for when to recognize churn, e.g.
- At the time of cancellation
- At the end of the current (paid-up) billing period
The Ultimate (SaaS) Churn Rate Cheat Sheet
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References used in creating this cheat sheet:
Lincoln Murphy – SaaS Churn Rate: What’s Acceptable?
Jason M. Lemkin – What is a reasonable churn rate for a subscription business?
Tomasz Tunguz – Why Negative Churn Is Such A Powerful Growth Mechanism
Alex Turnbull (GrooveHQ) – Results Of The 2013 SaaS Small Business Conversion Survey!
Will Kurt (KissMetrics) – Why Modeling Churn is Difficult
Steven H. Noble (Shopify) – Defining Churn Rate
Devin Brady (Recurly) – A Better Way to Calculate Your Churn Rate