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In the SaaS landscape, retaining customers often delivers greater long-term value than acquiring new ones. Subscription-based models rely on consistent revenue streams, and even minor retention gaps can escalate into significant revenue losses over time. Each churned customer represents more than a dropped subscription; it signals a potential breakdown in user experience, perceived value, or ongoing engagement. Every lost account is also a missed chance to build stronger relationships and increase lifetime value. This is why SaaS churn rate is one of the most critical SaaS metrics you should track and manage carefully. In this guide, we will explain what churn in SaaS means, how to calculate it, the types, benchmarks you should track, why it's important, and how to reduce it, helping you spot gaps before they impact growth. What is SaaS Churn Rate? SaaS churn rate measures how many customers or how much recurring revenue your business loses over a specific time frame. It’s a metr...

In the fast-paced world of SaaS, success isn’t defined by growth alone. Some companies scale rapidly but burn through cash, while others stay profitable yet struggle to expand. So how do investors and founders know if a SaaS business is truly healthy?  That’s where the Rule of 40 comes in, a simple yet powerful benchmark that combines two of the most important SaaS metrics—growth and profitability—into one clear indicator of performance.  In this blog, we’ll explore what the Rule of 40 means, why it matters for SaaS valuation, when to use it, and how to calculate it with real-world context. Whether you’re building an early-stage startup or managing a mature SaaS product, understanding this metric can help you make smarter, data-driven business decisions. What is the Rule of 40? The Rule of 40 is a benchmark that helps SaaS companies determine if they're growing efficiently. Originally popularized by venture capitalists, Rule of 40 is now used by SaaS leaders to determine whet...