Churn
Rate of customers who leave you
It's the percentage of customers who cancel your service in a specific period. If you have 100 customers and 5 cancel in a month, your monthly churn is 5%. It's your most important health indicator in subscription models.
How to use churn in your pitch with investors?
Say: 'Our monthly churn is 3%, vs. 10% industry average. This means we retain customers. With an LTV of $X and low churn, each acquired customer is profitable in Y months.'
Real examples
CFO asks why revenues aren't growing despite sales
“Instead of: 'We lost some customers.' Better: 'We have 8% monthly churn. We sell 20 new customers but lose 15. We need to lower churn before growing. It's like filling a bucket with holes.'”
Deciding between acquiring more customers or improving product
“Instead of: 'We need more marketing.' Better: 'With 12% churn, for every 100 new customers, we lose 12 per month. Investing in lowering churn to 5% is 2x more profitable than just acquiring more.'”
Analyzing why a feature didn't move the needle
“Instead of: 'The feature didn't work.' Better: 'Churn of users who use that feature is 2% vs. 10% general. It does work, but few discover it. We need onboarding, not more features.'”
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