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What sellers say about churn, and how to check it

Twelve claims you will hear in a SaaS acquisition, each with the mechanisms that can sit behind it and the arithmetic that settles it. Most are made in good faith and most do not survive recomputation under a buyer's definition.

The twelve claims

Each page takes one thing sellers say, explains why they say it, lists the mechanisms that can sit behind it, and gives the exact procedure for reproducing or refuting it from a subscription-level export. Thresholds are the ones we use in our own reports.

The claimMost common thing behind itTool
“Churn is about 2% a month.”Logo churn quoted as revenue churnfree churn calculator
“We have net negative churn.”One account doing all the workfree NRR calculator
“No single customer is more than 5% of revenue.”Subsidiaries billed separatelyfree revenue concentration analyzer
“Most customers are on annual contracts.”Renewals that have not happened yetannual-plan churn risk analysis
“MRR has grown every month for two years.”Rising churn masked by rising acquisitionMRR trajectory forensics
“That churn spike was seasonal.”A price increase two renewal cycles earlierchurn divergence detector
“We intentionally churned our bad customers.”Churn that was not selective at allrevenue quality scorecard
“Revenue is 100% recurring.”Setup, onboarding and implementation feesfree MRR health check
“Refunds and chargebacks are negligible.”Refunds clustered in the first thirty daysfree SaaS health score
“Logo churn is low.”Large accounts leaving among many small ones stayingfree churn calculator
“Nobody has churned in the last six months.”Cancelled rows excluded from the exportfree zombie MRR detector
“Our LTV is $3,000, so we can spend $1,000 to acquire a customer.”An unbounded horizonfree LTV calculator
“The business runs itself, about five hours a week.”Acquisition that is the founder personallybuyer risk assessment

How to use this

Work through the claims that apply to the deal in front of you, in order of how much of the valuation rests on each. In practice that usually means starting with the churn rate, then customer concentration, then whichever growth or retention claim the price was justified by. Every check runs on a spreadsheet export; none of them needs access to the seller's live billing account.

Two things are worth saying plainly. First, most of these claims are made in good faith — the usual cause is a dashboard default, not a deception, and the point of the exercise is to recompute under your own definition rather than to catch anyone out. Second, the answer that matters is rarely the level. It is the gap between the seller's figure and yours, and what explains it.

Related: the 23-point due-diligence checklist, the 5-risk buyer-side method, due diligence by marketplace, and getting the export in the first place.

Verify it against the raw rows

Every check on this page can be run by hand in a spreadsheet, and if you have the time you should. If you would rather not: send us the target's subscription export and we run the full human-reviewed analysis — logo churn, revenue churn, customer concentration, annual-plan decay, zombie MRR and an A–F revenue-quality grade. The free Starter tier covers one CSV per month, which is enough to check a single deal.

See a sample report →  ·  Get the free 23-point checklist →

Frequently asked questions

Why do so many SaaS churn claims not survive verification?

Because churn has no single agreed definition. Whether free accounts sit in the denominator, whether the figure counts customers or dollars, how annual plans are treated in non-renewal months, and whether reactivations are netted off each move the answer by between half a point and several points. A seller quoting their dashboard is quoting a real number computed under undisclosed assumptions.

What should a buyer ask for before the LOI?

A subscription-level export including cancelled, paused and past-due rows, covering at least twenty-four months; the formula behind any quoted churn or retention figure in writing; contract terms and renewal dates for every account above 2% of revenue; and any usage or last-login signal. Aggregated monthly summaries cannot answer most of the questions that matter.

Do I need software to run these checks?

No. Every procedure on these pages runs in a spreadsheet on a subscription export, and doing it by hand is the best way to understand a target's book. ChurnLens exists because most buyers would rather not spend the evening on it: send the export and we run the full human-reviewed analysis, with a free tier that covers one file a month.

9%
Median B2B SaaS revenue churn
88%
Median gross revenue retention
23
Audit Checklist Points

The seller's churn number is almost always wrong. Send the CSV and find out before you wire.

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🛡️ Free Starter tier: 1 CSV analysis per month. No credit card. Verify a seller's churn claims before you commit.