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The Ultimate (SaaS) Churn Rate Cheat Sheet

Churn rate is one of those subject areas that seems to be endless.  There are many, many great articles out there on how to model or reduce churn or (as our investor Christoph Janz wrote recently) why most SaaS startups should aim for negative churn.

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

Presenting…

The Ultimate (SaaS) Churn Rate Cheat Sheet

churn-cheat-sheet

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References used in creating this cheat sheet:

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