What is Customer Churn Analysis?

Customer churn analysis is the study of which customers stop using a SaaS product, when, and why. Median B2B SaaS gross revenue retention was 88% in 2024 and 84% in 2025, according to Aleph and Benchmarkit’s 2026 benchmarks. Churn analysis incorporates collecting, quantifying, and analyzing different types of churn by customer segment and sign-up cohort to analyze trends and customer behavior and search for potential solutions to churn.

There are different types of churn:

• Customer Churn: This churn type measures the percentage of customers who cancel their subscriptions during a given period. It serves as an outcome measure of business performance, especially regarding clients.
• Revenue Churn: This metric pertains to recurring revenue fluctuations linked to cancellations or downgrades. When it comes to churn, one must always consider the cost, especially for any business establishment.
• Voluntary Churn: It happens when customers choose to leave because they are dissatisfied, have found better alternatives, or no longer require the product.
• Involuntary Churn: This occurs due to something out of the customer’s control, such as a declined payment or expired credit card.

The way to calculate the customer churn rate is:

(Number of Churned Customers / Total Number of Customers at the Start of Period) x 100

Revenue churn is calculated in the same way as the customer churn rate, but with MRR lost to cancellations and downgrades in place of customers lost, and starting MRR in place of starting customers. Aleph and Benchmarkit’s 2026 benchmarks put median gross revenue retention, the revenue kept before expansion, at 84% for B2B SaaS companies in 2025, down from 88%.

Understanding the causes of churn is very important when solving it. Some common causes include:

• Poor onboarding and user experience: Customers struggle to get started with or use the product.
• Lack of customer support and engagement: Customers who cannot get help when they need it may stop using the product.
• Pricing and packaging issues: Customers may leave over pricing, hidden fees, or package offerings that do not match the value they get.
• Product-market fit: Customers are inclined to discontinue utilizing products that do not align with their specifications.
• Competition: Customers can easily be attracted by competitors who offer better features, lower prices, or better support.

Reducing churn is an ongoing process that necessitates proactive strategies.

• Improve onboarding and user experience: Try to establish an optimal set of procedures and templates for onboarding, and provide people with documentation and tutorials for leveraging the system to the maximum extent. And, finally, gather feedback from the users to amend the existing approaches.
• Provide excellent customer support: Some recommendations for providing support are hiring a competent support team, establishing several avenues of customer support (for instance, chat, e-mail, phone), and contacting the customers proactively.
• Review pricing and packaging: Pricing and packaging reviews address the alignment of costs and plans with customer value, and include provisions for adaptation.
• Focus on customer success: Implement customer success strategies for users to achieve their product objectives.
• Monitor customer health scores: Monitor the customer’s activity and traffic patterns to establish some of the signals that may indicate their desire to leave and reduce the likelihood of churn. Churn prediction models use usage and support data to flag at-risk accounts early.

To reduce churn, focus on customer satisfaction, product value, and proactive support to build a loyal customer base.