The SaaS Churn Rate is a performance indicator primarily used in the software as a service (SaaS) and online services industry. It measures the percentage of customers who have canceled or terminated their subscription during a given period (typically on a monthly or annual basis).
The SaaS Churn Rate is calculated by dividing the number of customers who have canceled or terminated their subscription by the total number of active customers during the specified period, and then multiplying the result by 100 to obtain a percentage. For example, if a company has 100 active customers and 10 of them have canceled or terminated their subscription in a month, its SaaS Churn Rate would be 10%.
The SaaS Churn Rate is an important indicator for businesses offering online services or SaaS, as it allows them to measure the stability of their business model and understand the reasons why customers are leaving the company. A high churn rate can be a sign of service quality issues or a lack of perceived value by customers, and it can result in a decline in company growth.