Companies with longer contracts (2+ years) reported the lowest annual unit churn

From For Entrepreneurs.com
Quote in SaaS & Tech Growth Strategy

Reported median annual unit churn (by customer count) is 10% for the group. This median has remained relatively consistent with 2015 findings.

Not surprisingly, companies with longer contracts (2+ years) reported the lowest annual unit churn.

Median annual gross dollar churn (without the benefit of upsells) is ~8%. This result is comparable to past survey results (7% in 2015, 6% in 2014, 8% in 2013).

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The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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How to Reduce Churn

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

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