Churn refers to the rate at which customers stop subscribing to a service. It is a critical metric for SaaS and subscription businesses. Churn can be “voluntary” (customer cancels) or “involuntary” (payment fails and subscription is cancelled).
FAQs:
- What is a good churn rate?
It varies by industry, but lower is always better. 5-7% annual churn is excellent for B2B; B2C often sees higher rates. - How do I prevent involuntary churn?
By using card updaters, smart retry logic (dunning), and sending reminders before cards expire. - Does a refund count as churn?
Not necessarily, but a refund often precedes a cancellation. Churn specifically refers to the loss of the recurring subscription.
Related Terms:
- Dunning
- Retention
- Customer Lifetime Value (LTV)
- Subscription