SaaS Churn

The rate at which customers or revenue is lost.

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SaaS Churn measures the percentage of customers or revenue a company loses over a specific period.

In depth

Churn can be measured in terms of customers or revenue. Customer churn tracks the percentage of users who leave, while revenue churn measures the loss in recurring revenue. High churn indicates dissatisfaction or poor product fit, while low churn signals strong retention. For SaaS startups, managing churn is critical because acquiring new customers is often more expensive than retaining existing ones. Reducing churn improves lifetime value and overall business stability.

Example

Let’s consider a real-world example of a SaaS startup calculating churn.

Customers at start of month: 1,000
Customers lost: 50

Churn Rate = 50 ÷ 1,000 = 5%

This means the startup lost 5% of its customers during the month.