Churn and Metrics - SaaS Brief

Dear SaaStr: What Are the Most Important SaaS Metrics in the Early Days?

SaaStr

NOVEMBER 12, 2024

Dear SaaStr: What Are the Most Important SaaS Metrics in the Early Days? In the early days, there are probably only 5 metrics that really matter : ARR ARR Growth Rate Burn Rate True Customer Happiness. NPS is A Great Core Metric. Churn is important, but in the early days, just drive it down. Your Burn Mutliple ?

Metrics

Metrics Venture Capital SaaS Churn

Dear SaaStr: Which Tactics Always Work to Drive Down Churn, and Drive Up Retention?

SaaStr

NOVEMBER 19, 2024

Dear SaaStr: Which Tactics Always Work to Drive Down Churn, and Drive Up Retention? Churn is a bummer, and high churn is bad. First, measure Churn. Know exactly what your churn is, and don’t judge it (too much). And make driving down churn each quarter a Top 5 goal of the company. Second, segment churn.

Churn

Churn Retention Scale Investment

Dear SaaStr: What are Some Tricks Software Companies Use to Manipulate Churn Metrics?

SaaStr

JUNE 2, 2021

Q: What are some tricks software companies use to manipulate churn metrics? Churn” is a surprisingly imprecise term. Some ways saas companies “manipulate” churn, which may be 100% legitimate in some cases: Not counting churn until after 90 days. If a customer churns in a week, why count them? Every quarter.

Churn

Churn Metrics Software Enterprise

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Two SaaS Metrics That Actually Don’t Matter That Much in the Earliest Days: Absolute Churn and Sales Cycles

SaaStr

JUNE 13, 2022

Metrics are critical in SaaS, and you need to track them fastidiously. But it’s also important to focus on the right metrics, at the right stage, and not obsess about the less important ones at the wrong times. >> Let’s Start with Churn. Absolutely, getting your churn trending downward is important.

Sales Hiring

Sales Hiring Scale Churn Metrics

Big Companies Don’t Churn. They Quit You.

SaaStr

DECEMBER 14, 2020

“Churn” is a term we all use in SaaS as a core metric, but its roots, as near as I remember and can tell, come from our B2C colleagues. Folks churn out of their Verizon plan, their Netflix subscription, etc. And sometimes they’ll churn even just for a modestly better deal. the dynamics are similar.

Churn

Churn Sales Hiring Systems Review B2C

How to Improve Any SaaS Metric: Obsess About It

SaaStr

APRIL 20, 2021

Q: What core SaaS metrics should we obsess about? Beyond MRR growth + managing the burn rate — which really are all that matters … you should obsess over improving every key metric and KPI. Or churn is too high. First just establish your baseline, for better or worse, in each key metric.

Metrics

Metrics SaaS Churn Engineering

If Nothing Else – Segment Churn

SaaStr

APRIL 26, 2021

Everyone seemingly became an expert in churn. Your churn rate should be 0.123909% per month. Churn is not a GAAP metric. In fact, Christoph Janz had a great post a ways back noting how even public companies define churn differently. But they excluded churn in the first 60 days. It should be net negative.

Churn

Churn Retention Metrics B2B

Measure Your Churn. But What’s Even More Important is to Measure Your “Almost Churn”. 5 Tricks to Help You Here.

SaaStr

MARCH 17, 2021

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. But maybe even more important is measuring Almost Churn.

Churn

Churn Metrics Customer Success Investment

6 Important Things Founders Get Wrong In Their Core Metrics

SaaStr

NOVEMBER 18, 2020

SaaS metrics can be more confusing than one might think. What if a customer churns, but is on an annual contract? My SaaS Metrics Primer: * ARR always = 12x MRR. Look, ARR and MRR aren’t really GAAP metrics. Something important is off in finance, in metrics, in reporting, and/or collections. I hear you.

Metrics

Metrics Banking Scale Churn

The Complete Guide to SaaS Pricing Strategy

Tom Tunguz

FEBRUARY 26, 2025

Third, contracts mitigate churn rates because the customer is only making a renewal decision once per year, instead of 12x per year. Similarly, Salesforce began with a usage-based approach before shifting to annual seat contracts when churn rates became significant and revenue predictability faltered. Sales teams lose leverage.

SaaS Payments

SaaS Payments Pricing Strategy Scale

The Silent, Lurking Churn: Activation Rates Less Than 90%

SaaStr

MAY 21, 2020

It took me a little while to see activation rates as literally one of the 3-4 most important metrics in SaaS, but it probably is. I don’t have a perfect metric, but after working on this with a dozen+ SaaS companies recently, I have a simple heuristic: 90% or more of your customers need to activate in the shortest practical time.

Churn

Churn B2C B2B Metrics

Dear SaaStr: What Is the Playbook for a Successful Customer Success Team?

SaaStr

MAY 10, 2025

Use metrics like product usage, NPS, and engagement to identify risks early. Focus on Net Retention Net retention is the ultimate metric for customer success. It combines renewals, churn, and upsells. But in the earliest days, NRR is the simplest core metric for Customer Success. This also reduces the burden on your CSMs.

Sales Hiring

Sales Hiring Customer Success Scale Retention

FT: Yamini Rangan’s Top Metrics as HubSpot’s New CEO

SaaStr

DECEMBER 20, 2021

Moving from Churn to NRR as the Core Retention Metric. This may sound obvious to more enterprise folks, but many Very Small Business and SMB focused SaaS companies still focus more on churn than NRR. NPS is now the #1 metric at HubSpot — for all employees. NPS is A Great Core Metric. #3. I Was Wrong.

Metrics

Metrics SMB Scale B2C

I Was Wrong. NPS is A Great Core Metric.

SaaStr

DECEMBER 4, 2022

It created a lot of discussions and was more controversial then — that NPS was a great core metric. Back then, I wrote that when I was a SaaS founder, I thought Net Promoter Score (“NPS”) was a somewhat dumb, Big Company metric. NPS isn’t tied to upsells, churn, or revenue. NPS is A Great Core Metric.

Metrics

Metrics Churn Engineering Innovation

The Challenge with SMB SaaS: High Growth Can Only Mask High Churn For Just So Long

SaaStr

JULY 26, 2022

But beyond all the other Pros and Cons of SMB vs enterprise, there’s one looming issue with SMB SaaS: Churn. Endemic churn. The type of churn you almost can’t do anything about. Net net, most true SMB SaaS products often churn on the order of 3% per month almost no matter what you do. And measuring it.

SMB

SMB Churn Payment Services SaaS

How to Leverage Pricing and Packaging to Drive Growth, Revenue, and Profit with Miro, Loom, OpenAI, and Splunk

SaaStr

DECEMBER 4, 2024

Though it seems counterintuitive to maximize revenue, Miro intentionally set the threshold high enough that when someone bought Miro, they were getting the collaborative value because the users needed to use the product as a team vs an individual (which early data showed the highest churn in).

Payments

Payments Pricing Scale Revenue

How Top SaaS Companies Drive 2-3x Better Campaign Performance Through Multi-Channel Personalization with Customer.io

SaaStr

FEBRUARY 7, 2025

Let’s break down the real metrics from companies doing this right. But the data showed that behavioral triggers (like “2 hours after last app session”) consistently outperformed time zone optimization by 40-50% on engagement metrics. Quick Reality Check: 84% of customers now expect personalized experiences.

Scale

Scale SaaS B2B Scaling

Dear SaaStr: What Should I Do in a Sales Audit?

SaaStr

APRIL 30, 2025

Rep Performance : Dive into individual and team performance metrics. Metrics like time spent in each stage and reasons for lost deals can provide clarity. Churn and Expansion : For existing customers, analyze churn rates, upsell/cross-sell performance, and NRR (Net Revenue Retention). If so, why?

Technical Review

Technical Review Sales Forecasting AI

CLTV: Important. But Not the North Star Metric It Used To Be.

SaaStr

JUNE 11, 2020

In B2C and high-churn environments, it’s indeed a critical metric. But in SaaS, in the earlier days, we inherited a lot of our lingo and metrics from B2C web services. So we used their core metrics like “Churn” and “Lifetime value”. We’ve moved on in SaaS from CLTV being a core north star metric.

Metrics

Metrics Customer Lifetime Value B2C B2B

3 Ways to Create and Nurture Great Customers for Long-Term Success with Workato’s SVP Embedded Sales

SaaStr

JANUARY 16, 2025

Time-to-value is your most critical early metric. What Most SaaS Companies Get Wrong The standard playbook is: Hire sales Hit growth targets Eventually add CS when churn becomes painful But that’s backward. Don’t wait until you’re forced to fix churn. Shocking, I know. Way earlier.

Sales Hiring

Sales Hiring Scale Sales Churn

10 Rules for Defining Churn with ForgeRock and Solarwinds

SaaStr

JANUARY 14, 2021

Reducing churn in SaaS, along with increasing new ARR is the backbone to growing your business. In this guide, Andrea Webb, the SVP of Customer Success & Retention at Solarwinds , and Tim Willey, the SVP of Commercial Strategy & Operations at ForgeRock , share their tips for understanding and combating churn. .

Churn

Churn Customer Success Subscription Payment Features

The Ultimate Guide to Software Customer Churn

Stax

MARCH 16, 2025

The average churn rate for the software industry as a whole is 14%. Thats actually one of the lowest churn rates across all industries. That said, industry experts agree that your SaaS companys goal churn should be below 2%. TL;DR The average software industry churn rate is 14%, but SaaS companies should aim for under 2%.

Payment Solutions

Payment Solutions Software Review Churn SaaS Payments

Flat Metrics: The One Clear and Simple Sign its Time to “Top” a VP

SaaStr

SEPTEMBER 1, 2021

Really, what you tend to see when you keep a stretch VP too long in their current role is flat metrics. Churn that stops decreasing. Churn should keep coming down, at least a bit, until it’s top quartile at least. When you see bookings, leads, churn or feature velocity flatten — that’s a flag.

Sales Recruiting

Sales Recruiting Sales Hiring Scale Metrics

What metrics are the most important for your product?

Intercom, Inc.

OCTOBER 18, 2021

The SaaS industry is full of advice on the perfect product metrics to gauge your users’ activation, engagement, and interactions. If you don’t know exactly what questions you want answered, these product metrics leave you blinded by the very data you hoped would open your eyes. What are product metrics?

Metrics

Metrics Customer Lifetime Value User Experience Engagement

ServiceTitan: Benchmarking the S1 Data

Clouded Judgement

NOVEMBER 18, 2024

”” Benchmark Data The data shown below depicts how the ServiceTitan data compares to the operating metrics of current public SaaS businesses. Together, we refer to our Pro and FinTech products as “add-on products.””

Benchmarks

Benchmarks Payments Payment Services SaaS Payments

15 Signs You Have A SaaS Metrics Problem (and How to Fix it) with Dave Kellogg, EIR at Balderton Capital

SaaStr

DECEMBER 13, 2023

Dave Kellogg, EIR at Balderton Capital and 25-year C-level veteran, shares the top 14 signs that you have a SaaS metrics problem, the five reasons those symptoms exist, and a SaaS metrics maturity model with five layers to help you move the needle at every stage. The 15 Types of Misuse and Abuse of SaaS Metrics #1: Bludgeoning.

Metrics

Metrics Sales Hiring Benchmarks SaaS

Dear SaaStr: What “Quotas” Should My VP of Customer Success and VP of Product Have?

SaaStr

MARCH 23, 2025

For a VP of Customer Success (VPCS), their “quota” or ownership should revolve around two key metrics: Net Revenue Retention (NRR) and Gross Retention Rate (GRR). NRR is the North Star metric for customer successit measures how much revenue youre retaining and expanding from your existing customer base.

VPCs (Virtual Private Cloud)

VPCs (Virtual Private Cloud) Customer Success Churn Retention

A Look Back: “SaaS Metrics Masterclass: Key Business Metrics, Pricing Strategies and Billing Models with Stripe’s Head of France and Southern Europe, Guillaume Princen” (Video + Transcript)

SaaStr

APRIL 30, 2022

Check out this 2018 Europa session with Guillaume Princen, Head of France and Southern Europe @ Stripe, where he talks about the metrics you need to be focused on in your startup. If you don’t have the time to watch the whole session, here are the main metrics you should be mindful of. One is your churn. MRR, obviously.

SaaS Payments

SaaS Payments Metrics Payment Methods Scale

The Three SaaS Metrics That Matter in 2024 with SaaStr Founder and CEO Jason Lemkin

SaaStr

MAY 3, 2024

What are the three most under-discussed metrics on social media, with VCs, and especially with founders? They went from on-prem to a SaaS model and may flatter their metrics a little by confusing them. Key Takeaways Track your net new customers after churn. This should be your North Star metric. They’re all at $2.5B

Metrics

Metrics SaaS Scale Social Media

How to Optimize Your Product Metrics for Growth by Dan Olsen

User Pilot

NOVEMBER 29, 2024

Dan, a Stanford-trained engineer with experience guiding companies like Intuit, understands how to optimize your product metrics for growth by focusing on retention and building a product users truly value. Understanding the product metrics Let’s have two products – A and B. The key is to go beyond surface-level metrics.

Metrics

Metrics Scale Acquisition Retention

The $10M to $1B Vertical SaaS Playbook: Key Lessons from Procore’s Chief Product Officer Wyatt Jenkins

SaaStr

FEBRUARY 12, 2025

Balanced Metrics : While they track traditional SaaS metrics, they also measure customer success indicators specific to the construction industry. Lower Churn : When software is deeply embedded in industry workflows, switching costs become naturally high.

Construction

Construction Scale SaaS Travel

Most SaaS Metrics Really Only Work if You Have 75%+ Gross Margins and 100%+ NRR

SaaStr

DECEMBER 3, 2023

So over the past decade-and-a-half we’ve come up with a lot of yardsticks, metrics and rules for SaaS companies. E.g.,: CAC of < 12 months is Good-to-Great Paying sales reps 25%-30% of what they close is Good A burn ratio of 1 or less is Good These metrics do sort of work, if you have some capital to spend (i.e., They don’t.

SaaS Payments

SaaS Payments Metrics SMB Payments

What Core Metric Should Your VP of Sales Be Responsible For? It Really Matters What You Pick.

SaaStr

MARCH 11, 2021

Churn is not her responsibility, nor is there any material credit for multi-year deals. This makes your VPS also implicitly responsible for churn as well, as well as net revenue retention for all accounts. Up until $8m-$10m ARR or so, this disalignment is relatively smallb/c it takes a while for renewals (and churn) to be material.

Sales Hiring

Sales Hiring Metrics Sales Churn

Phil Libin, CEO of mmhmm and Evernote on How to Lower Your “Bounce Rate”, High vs. Low Value Churn, and More

SaaStr

OCTOBER 28, 2021

Be Careful About the Metrics and Ratios You Pick. At Evernote, there was a push to do more and more analysis on the metrics and numbers. The thesis was many metrics were too easy to game. At Evernote, they conflated bounce with churn — and Phil challenges us not to. For example, there are always 7.8

Churn

Churn Retention Acquisition Startup

5 Metrics Every SaaS Company Should Care About In Any Market Environment with Salesforce Ventures Investor Jessica Bartos (Video)

SaaStr

FEBRUARY 14, 2023

In this week’s Workshop Wednesday , Salesforce Ventures Investor, Jessica Bartos, shares the 5 metrics every SaaS company should care about in any market environment, especially the one we’re currently in. Growth Is Still Number One Growth is still the number one metric, but it’s not the only one. You do that by showing momentum.

Metrics

Metrics Marketing SaaS SMB

Crafting the Perfect Investor Pitch: 5 Metrics Metrics That Matter with Christoph Janz of Point Nine Capital

SaaStr

SEPTEMBER 25, 2024

What data and metrics do you need to convince SaaS investors you’re in good shape and aligned with what they care about? These metrics are more targeted to those preparing for a Series A or B round and could make the difference between an excited-to-invest-in-you investor and a pass.

Metrics

Metrics Sales Hiring Retention Churn

Our CAC is Way Too High. Should We Cut and Marketing To The Bone?

SaaStr

MAY 16, 2025

High CAC Is a Symptom, Not the Root Problem If your CAC is too high, its likely because of one (or more) of these issues: Churn is too high : If customers arent sticking around, your CAC payback period will balloon. Fixing churn is often the fastest way to make CAC more reasonable. Itll just starve your pipeline and make things worse.

Marketing

Marketing Scale Churn Content Marketing

Why NRR is Probably The Wrong Core Metric for Your Customer Success Team

SaaStr

APRIL 28, 2022

So don’t get me wrong — NRR is a Top 3 Metric for any SaaS company. And importantly — importantly — they don’t sweat churn too much if the NRR goal is still being met. Or logo retention as a metric can work as well, especially in B2D and other models that grow a lot over the year on their own.

Customer Success

Customer Success Metrics Scale Retention

10 Key Lessons from Calendly’s CPO and Head of UX on Building AI that Actually Works

SaaStr

MARCH 9, 2025

Meeting intensity KPI challenge : Sometimes AI efficiencies can reduce a company’s core metrics (like Calendly’s “meeting intensity”), requiring leadership to make conscientious decisions about value tradeoffs. Building separate AI interfaces can create unnecessary tech debt and learning curves.

AI

AI Scale Education User Experience

The Most Important SaaS Metrics In 2023 with monday.com CEOs and Co-Founders Eran Zinman and Roy Mann, and SaaStr Founder Jason Lemkin

SaaStr

AUGUST 7, 2023

Learn about the most important SaaS metrics for founders in 2023 with the CEOs of the most metric-oriented company, monday.com, and the founder of SaaStr. For a quick recap on SaaS metrics: What is ARR in SaaS? So now we must be smarter about the most important SaaS metrics because they matter again. The takeaway?

Metrics

Metrics SaaS Sales Hiring Finance

How to Convince Investors to Fund You With Data: Christoph Janz of Point9 Capital

SaaStr

MARCH 24, 2025

Some fun facts: 10+ years of SaaStr conference attendance Partner at Point Nine Capital, a leading early-stage VC firm Geographic reach: Actively investing across Europe, US, and Australia Notable portfolio: Zendesk, Algolia, Contentful, Loom (and many more) Known for his “five ways to build a $100M business” framework The 5 Key Things (..)

Data

Data Acquisition AI Finance

10 Awesome Things the Free SaaStr AI Can Do For You, From Reviewing VC Pitches to Drafting Cold Outbound For You

SaaStr

MAY 3, 2025

Our AI Can Help You Figure Out What To Do About Churn and Other Issues Share all your challenges and metrics, and our AI will help come up with a game plan for you. #6. Our AI Can Help You Figure Out if You Can Get Funded Or Not Share all your metrics, and ask for a full assessment. #9.

Sales Hiring

Sales Hiring AI Interviewing B2B

Dear SaaStr: What’s a Good Example of a Monthly Investor Update?

SaaStr

FEBRUARY 23, 2025

It tends to be very predictive — and smooth over some variability.

Churn

Churn Startup Metrics Revenue

Dear SaaStr: In Consumption-Based Models, Should We Pay Out on Deals Closed or Usage?

SaaStr

APRIL 15, 2025

For example, HubSpot famously split commissionshalf on deal closure and the other half when the customer hit a specific usage metric (e.g., Avoid the Silent Churn Problem : Many SaaS companies are shocked to discover how low their activation rates are when they start tracking them. The customer churns within the first 6 months.

Scale

Scale Compensation Retention Churn

Dear SaaStr: What Are the Most Important SaaS Metrics in the Early Days?

Dear SaaStr: Which Tactics Always Work to Drive Down Churn, and Drive Up Retention?

Webinars

Trending Sources

Dear SaaStr: What are Some Tricks Software Companies Use to Manipulate Churn Metrics?

Webinars

Two SaaS Metrics That Actually Don’t Matter That Much in the Earliest Days: Absolute Churn and Sales Cycles

Big Companies Don’t Churn. They Quit You.

How to Improve Any SaaS Metric: Obsess About It

If Nothing Else – Segment Churn

Measure Your Churn. But What’s Even More Important is to Measure Your “Almost Churn”. 5 Tricks to Help You Here.

6 Important Things Founders Get Wrong In Their Core Metrics

The Complete Guide to SaaS Pricing Strategy

The Silent, Lurking Churn: Activation Rates Less Than 90%

Dear SaaStr: What Is the Playbook for a Successful Customer Success Team?

FT: Yamini Rangan’s Top Metrics as HubSpot’s New CEO

I Was Wrong. NPS is A Great Core Metric.

The Challenge with SMB SaaS: High Growth Can Only Mask High Churn For Just So Long

How to Leverage Pricing and Packaging to Drive Growth, Revenue, and Profit with Miro, Loom, OpenAI, and Splunk

How Top SaaS Companies Drive 2-3x Better Campaign Performance Through Multi-Channel Personalization with Customer.io

Dear SaaStr: What Should I Do in a Sales Audit?

CLTV: Important. But Not the North Star Metric It Used To Be.

3 Ways to Create and Nurture Great Customers for Long-Term Success with Workato’s SVP Embedded Sales

10 Rules for Defining Churn with ForgeRock and Solarwinds

The Ultimate Guide to Software Customer Churn

Flat Metrics: The One Clear and Simple Sign its Time to “Top” a VP

What metrics are the most important for your product?

ServiceTitan: Benchmarking the S1 Data

15 Signs You Have A SaaS Metrics Problem (and How to Fix it) with Dave Kellogg, EIR at Balderton Capital

Dear SaaStr: What “Quotas” Should My VP of Customer Success and VP of Product Have?

A Look Back: “SaaS Metrics Masterclass: Key Business Metrics, Pricing Strategies and Billing Models with Stripe’s Head of France and Southern Europe, Guillaume Princen” (Video + Transcript)

The Three SaaS Metrics That Matter in 2024 with SaaStr Founder and CEO Jason Lemkin

How to Optimize Your Product Metrics for Growth by Dan Olsen

The $10M to $1B Vertical SaaS Playbook: Key Lessons from Procore’s Chief Product Officer Wyatt Jenkins

Most SaaS Metrics Really Only Work if You Have 75%+ Gross Margins and 100%+ NRR

What Core Metric Should Your VP of Sales Be Responsible For? It Really Matters What You Pick.

Phil Libin, CEO of mmhmm and Evernote on How to Lower Your “Bounce Rate”, High vs. Low Value Churn, and More

5 Metrics Every SaaS Company Should Care About In Any Market Environment with Salesforce Ventures Investor Jessica Bartos (Video)

Crafting the Perfect Investor Pitch: 5 Metrics Metrics That Matter with Christoph Janz of Point Nine Capital

Our CAC is Way Too High. Should We Cut and Marketing To The Bone?

Why NRR is Probably The Wrong Core Metric for Your Customer Success Team

10 Key Lessons from Calendly’s CPO and Head of UX on Building AI that Actually Works

The Most Important SaaS Metrics In 2023 with monday.com CEOs and Co-Founders Eran Zinman and Roy Mann, and SaaStr Founder Jason Lemkin

How to Convince Investors to Fund You With Data: Christoph Janz of Point9 Capital

10 Awesome Things the Free SaaStr AI Can Do For You, From Reviewing VC Pitches to Drafting Cold Outbound For You

Dear SaaStr: What’s a Good Example of a Monthly Investor Update?

Dear SaaStr: In Consumption-Based Models, Should We Pay Out on Deals Closed or Usage?

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