Churn (Attrition rate)
Definition
Percentage of clients who stop being clients over a given period. A critical KPI for recurring service providers and SaaS: high churn cancels out acquisition.
Detailed explanation
Churn measures loss. Two calculations: client churn (% of clients lost) and revenue churn (% of MRR lost — worse, because the largest clients often leave first). A WordPress developer with 30 maintenance clients and 3 cancellations per year = 10% churn. To stay stable, they must gain 3 new clients per year — just to stand still. A churn above 15%/year signals a product problem (disappointing delivery, slow support, low perceived value). Reduction strategies: careful onboarding (day 7 is critical), structured monthly reports, proactive upgrades, quarterly relationship touch-points.
Related terms
MRR (Monthly Recurring Revenue)
Monthly recurring revenue, the predictable revenue over 30 days from subscriptions or recurring contracts. The main metric for SaaS busin...
Digital marketingNPS (Net Promoter Score)
A measure of client satisfaction and recommendation, obtained by asking the question 'On a scale of 0 to 10, would you recommend our serv...
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