To help illustrate the power of negative churn, take a look at the two charts below, which show the behavior of a cohort with 3% churn and 3% negative churn, respectively. Since this is the first time I’ve used the word cohort, let me explain what it means. A cohort is just a fancy word for a group of customers. In the SaaS world, it’s often used to describe a group that joined in a particular month. So there’d be a January cohort, a February cohort, etc. In the charts below, each month’s cohort is a different color so we can see how they’re declining or growing based on their churn rate.
In the top graph, we are losing 3% of revenue each month, and you can see that at a fixed booking rate of $6,000 per month, revenue is at $140,000 after 40 months, and growth is flattening out. In the bottom graph, we may be losing some customers, but the remaining customers are making up for it by increasing revenue. At a 3% negative churn rate, we are at $450,000 in revenue over 3x, and revenue growth is increasing, not flattening out.
cohortCohort Performance
For readers interested in putting together dashboards to cameroon mobile database help them manage their SaaS business, the following section should be most useful. To do this, we created an excel file for an imaginary SaaS company and laid out a traditional numeric report on one tab, and then laid out a chart dashboard on a second tab see below. These represent one view of how to do this. You may have a very different approach. But hopefully this will give you some ideas. I recommend adding a dotted line with the plan number through all the charts. This will allow you to quickly see how your work compares to the plan.