Churn Rate and Retention #
Churn rate measures how fast you are losing customers. Retention rate measures how well you are keeping them. DMSI Analytics tracks both.
Definitions #
| Metric | Definition |
|---|---|
| Churn Rate | Percentage of customers (or MRR) lost in a period |
| Retention Rate | 1 – Churn Rate. Percentage of customers retained. |
| Customer Churn | Customers who cancelled all subscriptions or let all licenses expire |
| Revenue Churn (MRR Churn) | MRR lost from cancellations, downgrades, and expirations |
How DMSI Analytics Calculates Churn #
Monthly Customer Churn Rate:
Churned Customers in Month / Customers at Start of Month x 100
Monthly Revenue Churn Rate:
Churned MRR in Month / MRR at Start of Month x 100
The Churn_Calculator runs nightly and stores both metrics.
Reading the Churn Chart #
The Churn & Retention chart on the Customer Analytics page shows:
– Red line: Monthly churn rate
– Green line: Monthly retention rate
– Both expressed as percentages
What is a Healthy Churn Rate? #
Healthy churn depends on your business type. General benchmarks for SaaS/digital products:
| Churn Rate (Monthly) | Assessment |
|---|---|
| Below 2% | Excellent |
| 2% to 5% | Good |
| 5% to 8% | Concerning |
| Above 8% | Critical attention needed |
Reducing Churn #
DMSI Analytics helps you identify at-risk customers before they churn. See Predictive Analytics: Churn Risk Scoring for details on the predictive churn feature.