Val Geisler is the founder and CEO (that’s Chief Email Officer for the rest of you nerds out there) of Fix My Churn. With an obsession for customer communication, Val spent over a decade inside companies from non-profits to 7-figure businesses to tech startups. She brings her background in content creation, CX, and digital strategy to her clients every day.
Val is an Email Marketing Strategist and Conversion Copywriter, and ridiculously obsessed with email and customer retention.
Wanna know how to reduce your churn rate with Email Marketing?
📌 Watch this short recording and learn how to use email to strategically generate leads and fix your SaaS churn rate!
Is my churn rate too high?
While it might sound like a simple question on the surface, the answer is anything but. A “good” churn rate for one company might be terrible for another. Worse, comparing average churn rates across different markets and industries will leave you mired in confusing statistics and contradicting studies.
So how do you know what a healthy churn rate is for your SaaS company? Why is it so hard to define an average churn rate—and what does that mean for your subscription business?
In SaaS, the average churn rate is around 5%, and a “good” churn rate is considered 3% or less. However, this varies greatly across businesses and industries, so in reality, there is no universal “average” churn rate. Churn (aka customer attrition) targets tend to fall all over the map, and everyone has a different idea of what an acceptable churn rate looks like.
The data tells a clear story:
The average churn rate for SaaS companies landed around 4.8%, with upper and lower quartiles of 8.5% and 2.9%, respectively.
Media and entertainment services recorded monthly churn of roughly 5.2%.
Healthcare subscription services came in a little higher at around 7.5%.
Education services and consumer goods saw identical monthly churn rates of around 9.6%.
Subscription boxes were the highest of the bunch, with monthly churn of 10.54%.
What is the SaaS churn?
SaaS churn measures the number of SaaS customers who cancel their subscription. Since recurring revenue is the lifeblood of a SaaS business, churn is a metric of critical importance to a SaaS company’s long-term viability.
What are your takeaways from this episode? Comment to let me know!
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Hi, I’m Natalie Luneva and I identify high ROI growth opportunities for SaaS companies
I am a growth and team performance coach to SaaS founders. I have worked with more than 100 companies.