Key Takeaways
- Even 5% monthly churn compounds to losing 46% of customers annually. Small churn improvements have massive impact.
- Revenue churn matters more than customer churn: losing a $100K account is worse than losing ten $1K accounts.
- Negative net churn (expansion exceeds losses) is the gold standard, meaning you grow even without new customers.
Types of Churn and How to Measure Them
| Churn Type | Formula | What It Reveals |
|---|---|---|
| Customer churn | Lost customers / Starting customers | Retention effectiveness |
| Revenue churn (gross) | Lost MRR / Starting MRR | Revenue impact of attrition |
| Net revenue churn | (Lost MRR - Expansion MRR) / Starting MRR | Overall revenue health |
| Logo churn | Lost accounts / Starting accounts | Account retention regardless of size |
Track all four metrics. A company can have acceptable logo churn but dangerous revenue churn if large accounts are leaving. Conversely, low revenue churn can mask high logo churn if small accounts leave while large ones expand.
Frequently Asked Questions
Related Services
Need Help With Implementation?
Our team specializes in implementing the solutions described in this glossary.
Get in Touch