Question 1

What is churn rate?

Accepted Answer

Churn rate is the percentage of customers who cancel their subscription in a given period. Monthly churn of 5% means you lose 5 out of every 100 customers per month.

Question 2

What is a good churn rate for SaaS?

Accepted Answer

Best-in-class SaaS companies have monthly churn below 2%. B2B SaaS typically has lower churn (1-3%) than B2C (3-7%).

Question 3

How does churn affect valuation?

Accepted Answer

High churn directly reduces company valuation. A SaaS with 10% monthly churn loses 72% of customers annually, making growth nearly impossible.

Churn Rate Calculator: Measure and Reduce Customer Loss