Your SaaS Churn Rate Is Wrong (and here's how to fix it)

SaaS Reddit AMAs with Luke Marshall · 25 min 38 sec · Published 21 March 2026

About this video

This video explains why churn rate is a policy decision rather than a simple formula and shows SaaS founders, RevOps managers and CEOs how to define active customers, handle delinquent subscriptions and reconcile data between Stripe and Baremetrics. Viewers will leave with a clear framework for calculating trustworthy churn and documenting the policy for board reporting.

The episode details churn definitions, active-customer criteria, handling of free trials, cancel-at-intent versus cancel-at-period-end, delinquent MRR, dunning windows and data-quality issues that affect churn calculations.

What this video covers

• Why churn has no universal standard and how to create a definition that fits your model
• Differences between Stripe and Baremetrics active-customer definitions and their impact on churn data
• Guidelines for including free trials, freemium users and paused accounts in churn calculations
• Trade-offs of cancel-at-intent versus cancel-at-period-end and handling annual contracts
• Identifying data-quality red flags such as duplicate subscriptions and mid-cycle plan changes

Chapters

1. 00:00 — Why churn is a policy, not just a formula
2. 01:38 — The 5 pillars of SaaS MRR growth (new MRR, expansion, contraction, churn, reactivation)
3. 02:00 — How to define an active customer: free trials, freemium plans, and paused accounts
4. 02:43 — Stripe vs. Baremetrics: how each platform determines active customer status
5. 04:25 — Should free trial cancellations count toward your churn rate?
6. 05:32 — Scheduled cancellations: cancel at intent vs. cancel at period end
7. 06:10 — How cancel-at-period-end inflates MRR and creates bad financial decisions
8. 07:44 — How to handle annual enterprise accounts that go silent before renewal
9. 09:37 — Delinquent customers: are failed payments churn or at-risk MRR?
10. 10:46 — What is a dunning sequence and how does it protect your revenue?
11. 12:49 — How long should your dunning window be? (Monthly vs. annual subscription guidelines)
12. 13:32 — Data quality: the hidden factor that corrupts your churn calculation
13. 14:02 — Common data issues: duplicate subscriptions, legacy plans, mid-cycle plan changes
14. 15:55 — How to reconcile Stripe and Baremetrics (and what a healthy variance looks like)
15. 16:12 — How often should you audit your subscription data?
16. 18:25 — Summary: the 4 churn policy decisions every SaaS founder needs to document
17. 20:16 — How Baremetrics Recover, retention tables, and cancellation insights help reduce churn
18. 21:12 — What's coming in Part 2: diagnosing why customers are churning

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