Archives for February 2013

SaaS Churn Rate Improvement: Monitor and Drive Engagement

SaaS Churn Rate Improvement - Monitor and Drive EngagementIn my last post I shared some actual ways to reduce your SaaS Churn Rate, including attracting the right customer and managing expectations.

In this post, I’m going to go deeper, and share some awesome methods for improving customer retention by leveraging the power of the SaaS business model, specifically the ability of the provider to monitor for and drive Customer Engagement.

[Read more…]

SaaS Churn Rate Reduction Starts with Attracting the Right Customers

Customer churn can have a devastating effect across your entire SaaS company.

From the negative impact on your company valuation because your SaaS churn rate is too high, to the drag on growth you feel when you have to replace lost customers or revenue before you can make forward progress… churn is bad news.

Over the next several posts I’ll outline five methods for churn reduction and customer retention that fully embrace the power of the SaaS business model…. let’s get started.

[Read more…]

SaaS Churn Rate: Go Negative with Expansion Revenue

I mentioned, “Expansion Revenue” and “Negative Churn” in my post SaaS Churn Rate: What’s Acceptable? and I wanted to expand on those concepts a bit.

But first…

UPDATE 1 : Dollar Revenue Retention – DRR – is the latest SaaS churn rate metric you need to know about (after you read this post, of course).

UPDATE 2: Actually, DRR isn’t the best metric. Net Revenue Retention – NRR – is. NRR is the “net” revenue left over from an existing cohort of customers, less any revenue churn (caused by customers leaving totally or staying, but paying less for the privilege), plus any expansion revenue from upsells, cross-sells, etc.

UPDATE 3: I’m so over the term “Negative churn.” Can we agree to call it Account Expansion?

Okay, so back to the original points of this 2013 post – Expansion Revenue and “Negative Churn” (ugh, see above)… I honestly believe that fully grasping the power of these two concepts could change your SaaS business forever.

No pressure… but you might want to read this post carefully.

[Read more…]

SaaS Churn Rate: What’s Acceptable?

saas-churn-rate-what-is-acceptableIs 5% a good monthly SaaS Churn Rate? Read on to learn the answer…

As a consultant to SaaS and Cloud providers that are looking to grow, I get asked what an acceptable SaaS churn rate is all the time.

As I stated in my article SaaS Providers: Growth Requires Proactive Customer Retention the answer is you want a churn rate that is “as low as possible.”

[Read more…]