## 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 1. Improve onboarding 2. Increase product usage 3. Build switching costs 4. Proactive customer success 5. Address churn reasons