The Ultimate (SaaS) Churn Rate Cheat Sheet

Yesterday I shared my goals for the next few months for how I am planning to grow my website over the next couple of months. If you have not read it yet, you can find it here: Every journey starts with a goal, mine is two signups a day.

One of the main caveats that I added to my post was how I would have to take a guess at what my Churn Rate is going to be as I have no data on which I can base this number from day one.

In itself calculating churn is not a straight-forward process so I was glad when my friend Bryan pointed me to a helpful cheat sheet earlier today.

The following Churn Rate Cheat Sheet has been produced by ChartMogul and provides a good guide to Churn for those of you that have not worked with it in the past as well as some guides for when to recognise Churn and what is a Healthy Churn.

Here is a quote from ‘What is a healthy churn rate?’:

B2B enterprise-y companies tend to have the lowest churn rates, deals tend to be annual or even multi-year and buyers are not price sensitive (and are not spending their own money). Jason M. Lemkin shared that EchoSign had annual negative MRR churn of -10% to -30% (including offset for cancellations and downgrades). Tomasz Tunguz reports that New Relic’s and Zendesk’s MRR churn rates are at -14% and -20% respectively.

From this I am happy to leave my original calculation at 15% and analyse the figures again at the end of month 2 and see where I am really sat at that point.

You can find the cheat sheet here:

https://chartmogul.com/resources/churn-cheat-sheet/

I suggest you give it a read if you run a SaaS business as it may help with your future projections and identifying if you have a problem that needs to be solved.

I am currently working on putting together my plans for when my goals take effect on 1st August and will provide some details on how I intend to hit my goals over the next few days.

Stay tuned readers.