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User Churn: Calculating and Optimizing

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User Churn threatens your ability to generate Monthly Recurring Revenue, as well as putting a halt on your ability to grow the business. Tracking User Churn will allow your team to create a better overall experience that aligns with a value driven product. This in turn increases users, which fuels the growth engines of your SaaS business.

Here we walk through exactly how to calculate User Churn, including what to and not to include in the calculation, as well as how to optimize this crucial SaaS metric.

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User Churn: Calculating and Optimizing

  1. 1. User Churn: Calculating and Optimizing Price Intelligently’s SaaS Metric Mondays Price Intelligently SaaS User Churn
  2. 2. Let’s talk about User Churn Your SaaS company’s silent killer. Price Intelligently SaaS User Churn
  3. 3. User = Someone who uses/subscribes to your product Churn = A measure of attrition or loss SaaS MRR ChurnPrice Intelligently
  4. 4. User Churn = The occurrence of a customer losing access to your service and or the subscription running out. Want To See What Your User Churn Is Right Now? Get your free ProfitWell account – 1-click SaaS Metrics >> Price Intelligently SaaS User Churn
  5. 5. SaaS User Churn Here’s How You Breakdown User Churn Visually (image taken from ProfitWell – free SaaS Metrics dashboard) Price Intelligently
  6. 6. All that stuff is great but…why should you even care? Price Intelligently SaaS User Churn
  7. 7. “Not tracking User Churn is like – trying to eat a bowl of cheerios with a pitchfork; you won’t retain much” Price Intelligently SaaS User Churn
  8. 8. More specifically… Understanding your User Churn can help Identify which aspect of your product is causing churn Product Improve projections and financial planning models to account for lost users FinanceMarketing Identify channels bringing in crappy/happy customers See the breakdown of your User Churn with ProfitWell >> Price Intelligently SaaS User Churn
  9. 9. Let’s go even deeper and calculate User Churn like a #boss Price Intelligently SaaS User Churn
  10. 10. User Churn is all about the folks leaving your business User Churn Criteria Breakdown Items to Include Items to Exclude Churned Users that cancelled Cancelled users who have not churned Expired subscriptions Delinquent Accounts Price Intelligently SaaS User Churn
  11. 11. Price Intelligently SaaS User Churn Total Churned users (via cancellations) for the month Total Expired Subscriptions for the month The calculation breakdown EQUATION Calculating User Churn is very simple and straightforward. Simply take the SUM of the total churned users (who cancelled) + the total expired subscriptions in a given month
  12. 12. Once you know how to calculate like a #boss you can optimize like an even bigger #SaaS superstar Price Intelligently SaaS User Churn
  13. 13. Here’s how to eliminate as much User Churn as possible: 1. Fix your pricing 2. Churn loss surveys & conversations 3. Increase your active users $ $ $ $ $ $ $ $ $ $ $ $ Price Intelligently SaaS User Churn
  14. 14. Improper pricing can heavily influence your User churn, especially if you don’t have a proper value metric or your customers just don’t match your product’s value with your price. Key Optimization #1 Fix Your Pricing Strategy Price Intelligently SaaS User Churn
  15. 15. You’re likely missing the true reasons folks are leaving your product. Running proper customer loss surveys that force respondents to choose the biggest reason(s) their leaving will help you identify these reasons real quick. Key Optimization #2 Run Churn Loss Surveys Price Intelligently SaaS User Churn
  16. 16. This is much easier said than done, but a lot of active cancellations come from individuals who don’t get hooked into habitually using your product. Obsess over active users. Key Optimization #3 Increase your active users Price Intelligently SaaS User Churn
  17. 17. Boom. You’re now a User Churn rock star*. *…or just a normal SaaS aficionado that’s more informed and hopefully learned something useful. Price Intelligently SaaS User Churn
  18. 18. Want real time SaaS Metrics (including User Churn)? Know and understand your SaaS Metrics with ProfitWell for free - the most accurate metrics on the market. Click here to get your free ProfitWell account >> Price Intelligently SaaS User Churn

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