Churn Rate
The percentage of customers or revenue lost over a given time period.
Churn Rate measures the percentage of customers or revenue lost over a specific period.
**Types of Churn:**
• **Logo Churn**: Percentage of customers lost • **Revenue Churn**: Percentage of revenue lost • **Gross Churn**: Total revenue lost (before expansion) • **Net Churn**: Revenue lost minus expansion
**Churn Calculation:**
Monthly Churn = Customers Lost ÷ Starting Customers × 100
**Churn Benchmarks (Annual):**
• Enterprise SaaS: 5-7% • Mid-market SaaS: 10-15% • SMB SaaS: 20-30%
**Churn Causes:**
• Poor product-market fit • Inadequate onboarding • Lack of value realization • Customer business changes • Competitive displacement • Economic factors
**Reducing Churn:**
• Improve onboarding and TTV • Monitor customer health proactively • Build multi-threaded relationships • Conduct regular business reviews • Create stickiness through integrations • Address issues before renewal
Related Terms
Net Revenue Retention (NRR)
A metric measuring revenue retained from existing customers including expansion and contraction.
Customer Lifetime Value (CLV)
The total revenue a business can expect from a single customer account throughout their relationship.
Customer Success
A business function focused on ensuring customers achieve their desired outcomes using your product.