Churn: Net-First or Sum-First?
While I’ve already done a comprehensive post on the subject of churn in SaaS companies and some perils in how companies analyze it, in talking with fellow SaaS metrics lovers of late, I’ve discovered a new problem that isn’t addressed by my posts. The question? When calculating churn, should you sum first (adding up all the […]
You Can’t Analyze Churn by Analyzing Churn
One thing that amazes me is when I hear people talk about how they analyze churn in a cloud, software as a service (SaaS), or other recurring revenue business. You hear things like: “17% of our churn comes from emerging small business (ESB) segment, which is normal because small businesses are inherently unstable.” “22% of our […]
Measuring SaaS (or Cloud) Renewal Rates: Way More Than Meets the Eye
I love cloud computing. I love metrics. And I love renewals. So when I went looking on the Web for a great discussion of SaaS renewals and metrics I was surprised not to find much. Certainly, I found the two classics on SaaS metrics: The Bessemer Venture Partners 10 Laws of Cloud Computing white paper, […]
Measure Your Churn. But What’s Even More Important is to Measure Your Almost Churn. 5 Tricks to Help You Here.
Churn is a paramount topic in SaaS, as we all know. If every dollar of ARR is worth $6+ in the long term, including upsells and second order revenue … then of course, by the same token, for every dollar of ARR that churns … you’re losing $6 of notional ARR. Lose a $100k customer? […]
