[bmccormack]

"Switching customers to annual billing radically decreases churn, one of the key risks to SaaS businesses long-term."

Where I can I read more about annual billing decreasing churn? I've read your blog post (or email?) about switching to annual billing to free up revenue to acquire new customers, but I don't remember reading about how it decreases churn as well.

[patio11]

Dharmesh Shah has talked about it extensively -- basically, of people on monthly billing, at any given time approximately 100% are at risk of churn. Of people on annual billing, < 10% are at risk of churn at any given time. They also have less opportunities to hit involuntary churn like, e.g., getting a CC declined or expired.

[dshah]

Indeed, that's true.

One additional point: Customers that commit to annual billing generally tend to churn less often overall -- because they've made a more "considered" purchase and committed more time to the purchasing decision.