This post is by Amelia Ibarra from SaaStr
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Reducing churn in SaaS, along with increasing new ARR is the backbone to growing your business. In this guide, Andrea Webb, the SVP of Customer Success & Retention at Solarwinds, and Tim Willey, the SVP of Commercial Strategy & Operations at ForgeRock, share their tips for understanding and combating churn.
Rule 1 – Customer vs. ARR Churn
When you set out to track your churn, it’s vital to pick the correct metric. Often, multiple churn measurements are lumped together, and it’s important to differentiate the areas you are measuring:- Customer Churn: This measures how many customers you lose.
- ARR Churn: This measures how much ARR (Annual Recurring Revenue) you lose.
Rule 2 – ARR ≠ ATR Churn
ATR (Available To Renew) churn is calculated by dividing the amount of ARR lost by the starting dollar amount of the ATR pool. Tim says ForgeRock chooses to focus primarily
