Monthly vs. Annual Churn Rates
Now, just so we’re on the same page, 5% – 7% Annual churn – the good churn rate – translates to 0.42 – 0.58% monthly churn.
This means companies with acceptable churn only lose about 1 out of every 200 customers (or dollars) per month.
Now that’s a solid platform you can really build a high-growth company on.
On the flip side, a high churn rate is the reason you ended 2012 with a whole bunch of new customers… but had about the same amount of revenue.
Churn is the reason that – though you acquired a lot of new logos in 2012 – you had no significant year over year growth from 2011.
More SaaS + Software Stats
The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months