Churn rate is also sometimes called attrition rate. It is one of two primary factors that determine the steady-state level of customers a business will support.

In its broadest sense, churn rate is a measure of the number of individuals or items moving into or out of a collection over a specific period of time.

The term is used in many contexts, but is most widely applied in business with respect to a contractual customer base. For instance, it is an important factor for any business with a subscriber-based service model, including mobile telephone networks and pay TV operators. The term is also used to refer to participant turnover in peer-to-peer networks.

The phrase is based on the English idiom "to churn up", meaning to agitate or produce violent motion.
http://en.wikipedia.org/wiki/Churn_rate

Churn Rate for a SaaS Provider:

So a healthy SaaS business will have a combination of a small churn and relatively high upsell rates, so the total is more than 100% renewal value (e.g. 88% renewal rate + 15% upsell).
http://gadishamia.wordpress.com/2008/09/27/how-to-measure-a-good-saas-company/
Source(s):
http://en.wikipedia.org
http://gadishamia.wordpress.com/2008/09/27/how-to-measure-a-good-saas-compa...


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