FAQ & key takeaways
How to read this metric
What it measures
Churn Rate is the percentage of your customers who cancel their recurring subscriptions within a given time period. It is the literal opposite of your Retention Rate.
Why it matters
Churn is the silent killer of SaaS businesses. If your churn rate is higher than your new customer acquisition rate, your business will eventually shrink. Understanding churn allows you to calculate the “leaky bucket” effect on your growth.
How to reduce Churn
- Customer Feedback: Regularly talk to churning customers to understand why they left.
- Improve Engagement: Use email and in-app notifications to bring users back into the product.
- Exit Surveys: Implement mandatory exit surveys to identify common pain points.
- Offer Pausing: Sometimes users just need a break; offer to pause their subscription instead of a full cancellation.