Metrics & Performance
Churn Rate
Also Known As
Customer ChurnRevenue ChurnAttrition
Churn rate is the percentage of customers or revenue lost over a given period, typically measured monthly or annually. Lower churn indicates better customer retention.
What is Churn Rate?
Churn measures customer loss. In subscription businesses, churn is the opposite of retention—it's customers (or revenue) leaving. Reducing churn is often easier than acquiring new customers.
Types of Churn
Customer Churn (Logo Churn):
Customer Churn = Lost Customers / Starting Customers
Revenue Churn (Gross Revenue Churn):
Revenue Churn = Lost MRR / Starting MRR
Net Revenue Churn:
Net Churn = (Lost MRR - Expansion MRR) / Starting MRR
Churn Benchmarks (Monthly)
| Segment | Good Churn |
|---|---|
| Enterprise | <0.5% |
| Mid-Market | <1% |
| SMB | <2% |
| Consumer | <3-5% |
Negative Churn
Negative net revenue churn means expansion exceeds losses:
- Upsells > Downgrades + Cancellations
- Revenue grows even with customer losses
- The holy grail of SaaS metrics
Reducing Churn
- Improve onboarding
- Increase product usage
- Build switching costs
- Proactive customer success
- Address churn reasons
Example Usage
“After implementing a customer success program, monthly churn dropped from 3% to 1.5%.”