How is the Churn Health Grade calculated?

The grade is derived from the Churn Health Score, which starts at 100 and deducts points per identified churn driver: 20 for critical, 12 for high, 6 for medium, and 2 for low severity. The final numeric score maps to a letter grade by range. The calculation runs automatically on every RetentionCheck analysis.

What does a C Churn Health Grade mean?

A C grade (score 50–64) means warning signs are present across multiple churn drivers. It looks tolerable on the surface but compounds quickly. Two to four active drivers at this level typically produce a D or F grade within two to four quarters if left unaddressed. A C grade requires immediate action, not monitoring.

What is the difference between a Churn Health Grade and a Churn Health Score?

The Churn Health Score is a precise 0–100 number that reflects the severity and count of active churn drivers. The Churn Health Grade is a letter (A through F) derived from that score to make severity instantly readable. The score is better for tracking incremental progress over time; the grade is better for communicating urgency.

What should I do if my product gets an F Churn Health Grade?

An F grade (score 0–34) signals systemic retention failure. The first step is stopping or reducing acquisition spend until retention is fixed, because new customers will churn at the same rate. Use the driver breakdown from your analysis to prioritize the one or two highest-severity issues and resolve them before moving to lower-priority fixes.

What Is a Churn Health Grade?

The Churn Health Grade Scale

The Churn Health Grade translates a numeric Churn Health Score (0–100) into a letter grade that makes severity immediately readable. Five grades map to five distinct states of retention health, each with a different required response.

Grade	Score Range	Status	Required Action
A	80–100	Minimal churn risk. Healthy retention.	Monitor and maintain. Identify what's working.
B	65–79	Mostly healthy. Minor issues to watch.	Address the specific drivers before they compound.
C	50–64	Warning signs present.	Act now. Multiple drivers are degrading retention.
D	35–49	Serious churn issues.	Treat as a top-priority retention crisis.
F	0–34	Systemic retention failure.	Stop new acquisition spend until retention is fixed.

How the Grade Is Calculated

The grade derives from the Churn Health Score, which starts at 100 and deducts points for each identified churn driver based on its severity: critical drivers subtract 20 points, high-severity drivers subtract 12, medium-severity drivers subtract 6, and low-severity drivers subtract 2. The score floors at 0. The grade is then assigned by range.

This means a product with three critical drivers and two high-severity drivers scores 100 − (3×20) − (2×12) = 16, which is an F. A product with one medium driver and two low drivers scores 100 − 6 − 4 = 90, which is an A. The math reflects actual severity distribution, not averages.

For the full scoring methodology, see What Is a Churn Health Score?

What Each Grade Means in Practice

Grade A (80–100): Healthy Retention

An A grade means your cancellation feedback is either sparse or concentrated in low-severity issues. Most customers who cancel are doing so for reasons outside your control: budget cuts, company shutdowns, role changes. The product is delivering value for the segment it serves. The job at this grade is to understand what's working and protect it, not to over-engineer.

Grade B (65–79): Watch List

A B grade usually means one or two real drivers are present but haven't reached critical mass. Common examples: a pricing objection showing up in 15% of cancellations, or a specific feature gap that a vocal minority mentions. These issues are fixable, but the window closes if they go unaddressed for multiple quarters. A B that stays a B for six months is a business risk.

Grade C (50–64): Act Now

A C grade is the most dangerous position for a SaaS company because it looks tolerable. Monthly churn may still be in the 3–5% range, revenue is growing, and the problems feel manageable. They are not. A C grade typically reflects two to four real drivers spreading across the customer base. The compounding effect of unaddressed C-grade problems produces a D or F grade within two to four quarters. Run your analysis at RetentionCheck and build a prioritized fix list immediately.

Grade D (35–49): Retention Crisis

A D grade means multiple high or critical drivers are active simultaneously. This is not a product quality problem in one area. It is a systemic signal that the product-market fit has eroded, the customer profile has drifted, or the value delivery mechanism is broken at multiple points. At D, reallocating acquisition budget to retention is the correct financial decision: acquiring customers into a leaking bucket accelerates cash burn without building the business.

Grade F (0–34): Systemic Failure

An F grade means the product is in a retention crisis. Cancellation feedback at this level contains a clear and consistent pattern: customers are not getting the core value they paid for. The drivers are not edge cases. Fix the core before anything else. See the example analyses for patterns that typically produce F-grade scores and how they were resolved.

Using the Grade Alongside the Score

The grade gives you a fast read on severity. The score gives you precision for tracking progress over time. A team that moves from F (score: 18) to D (score: 42) has made meaningful progress that the grade alone does not fully capture. Tracking the numeric score each quarter shows directional movement before you cross a grade threshold.

Both the grade and score are generated automatically on every analysis at RetentionCheck. You do not calculate them manually.

Common Misreadings

Two patterns cause founders to misread their grade. First, averaging across customer segments: a mixed enterprise and SMB book may show a B grade overall while the SMB cohort is at D. Always segment your analysis by customer type before acting on the aggregate. Second, conflating a stable grade with a solved problem. A B grade that holds steady for three quarters while your company grows means the same drivers are spreading to more customers. A stable grade against a growing base is a deteriorating situation.

For a deeper treatment of the underlying score methodology, see Churn Health Score. For benchmarks on what churn rates correspond to each grade, see good churn rate for SaaS.