Churn, specifically in B2B SaaS, refers to the rate at which customers cancel or choose not to renew their subscriptions to a software service. It's an important metric for companies as it directly impacts revenue and growth. Keeping churn rates low is crucial as the cost of acquiring new customers is far more expensive than the cost of retaining existing ones.

While some level of churn is unavoidable, reducing churn should always be a priority because as churn decreases, overall customer lifetime revenue increases. Churn rate can be measured as:

• Customer churn: the percentage of customers lost during a specific period
• Revenue churn: the percentage change in monthly recurring revenue due to customer cancellations and upgrades

Understanding both aspects of churn gives a comprehensive view of customer retention and revenue impact. Understanding the underlying reasons for churn is the first step in developing effective mitigation strategies.

Factors contributing to churn can vary, but common reasons include poor onboarding experiences, lack of perceived value, technical issues or the emergence of competing solutions.

To combat churn, companies often employ a multi-faceted approach, focusing on enhancing customer satisfaction, providing proactive support and continuously improving their product or service based on customer feedback.