What are the best KPIs for churn?

There are several indicators companies can use to measure and prevent churn, but many factors will influence the best ones for you such as whether your business is a PLG or sales-led, if your product is freemium, whether your company is an early stage vs late stage startup, and more. But basically, consider the following:

• Customer health score: This tells you whether a particular customer is happy or unhappy with your company and may be a leading indicator of churn. This score is typically a formula that considers the customer's overall satisfaction (NPS), support requests resolved over time, number of escalations, and more.

• Customer engagement: if the customer is not 'engaged' with your product, this can lead to churn. No one wants to pay for something they don't use. You may want to track engagement with your product overall or with specific features. It will be important to determine what "engagement" means to your company (e.g. login within a specific timeframe, use of certain features, or a number of features used in sequence, etc.).

• Active users: Similar to the 'customer engagement' metric, this looks at how many of the total users that the customer has paid for are actively using the product. If a customer purchased, let's say, licenses for 100 users but only 10 have been active in the past 30 days it could indicate a propensity to churn.

• Renewals: Customers that don't renew their subscriptions on time are more likely to churn. You can establish a process for reaching out to customers to prompt them to start the renewal process 30, 60, or even 90 days before their subscription (for SaaS products) expires. Keeping track of renewal schedules is important to prevent churn and start mitigation processes in case customers indicate they don't intend to renew their licenses.

• NPS: The key indicator of customer satisfaction, the net promoter score, is widely used across industries to understand whether customers are loyal and if they will churn.

Churn is a critical measurement for my area of the business, which includes services: The best KPIs for churn:

1. Churn rate: direct measurement of churn

2. Customer Engagement Score: Higher engagement usually equates to higher loyalty

3. Net Promoter Score: measure of satisfaction indicates likeliness to churn

4. Customer Retention Rate: another direct measurement of churn