Is churn only relevant in B2B industries? We think not. Here's how to calculate it, and the best ways to counteract it.

2. Only relevant to B2B?
Customer
experience &
service experience
impacts customer
retention
B2B B2C
SIMILAR
More relevant to
consider if it is
non-SaaS or SaaS
!

3. SaaS vs Non-SaaS
Predictable revenue model -
Monthly, quarterly, or annual
subscription fee
All licensing fee usually
paid up-front
Churn SaaS Revenue
immediate & drastic impact
Opportunity cost for
SaaS customer to
switch vendors is
LOW
SaaS companies need to have tools & processes in place to predict potential churn

4. Churn Retention
Takes into account only
existing customers
Opposite of retention
Calculated by calculating
number of clients retained
over a particular time period
Number of customers who
have not remained loyal to
your product over a particular
time period

5. Different Ways
Revenue Churn vs User Churn
Revenue Churn - Measures revenue lost from a cohort
Customer Churn - Measures number of paying customers lost from a cohort
Churn =
Lost customers
Existing customers + New customers − Customers lost
x 100

6. No aggregate is ever going to perfectly communicate a particular
customer behaviour : an aggregate is a lossy compression after
all. But, what you want to avoid are aggregates that hide big
news, tell you something has changed when everything remains
the same, or leave you with the opposite impression of what is
actually happening
- Steven H Noble
“ “

7. Useful to put your churn rate in perspective
Industry standards vary
- depending on sector, maturity of company, customers targeted
Compare against realistic expectations for your stage as a company

8. In a perfect world, churn rate is low.
annual churn rate acceptable
in Saas companies
(Bessemer Venture Partners / Lincoln Murphy)
5% - 7%
Need to distinguish between
annual churn rate & monthly churn rate