In this post I want to break down a question I received on churn’s relationship to sales growth. In the end, we’ll both have an answer to this question, and more insight into churn’s effects on a business. The question reads: “What direction does churn tell us to go? If churn is based on all deletes, would churn go consistently go down b/c deletes within the month are relatively low when compared to the total customer base?...
Customer churn refers to the rate at which customers stop using a company’s products or services. Within the SaaS environment, it’s simply the rate at which customers cancel their subscriptions. The two main measures of churn are: Customer churn Revenue churn These two metrics are often correlated but they have subtle differences. Customer-based churn is when the paying entity, be it an account or user stops using your service. Whereas, revenue churn encompasses less customer spending or plan downgrades....