What is the best way to estimate future churn for a SaaS platform?

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JASON LEMKIN

Broken record, but measure NPS and CSAT from Day 1.

Predicting churn in the early days from data is tough. If you sign 1 year contracts, you won’t even see churn for a year, for example!

And churn from your earliest customers may be statistically insignificant, especially if you are growing quickly. If you had 10 customers a year ago but 1,000 today … the data on that 10 isn’t very telling.

But I’ve learned NPS and CSAT are telling.

Measure them constantly. Segment the data (by size customer, category, etc.). Get the feedback.

High NPS/CSAT customers churn at a much lower rate.

Even when you don’t see it in the MRR.

Take action now, and set a goal, to improve those metrics.

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Published on September 3, 2017
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