Churn Rate

The percentage of customers who cancel in a given period.

Customer Success

Definition

Churn rate is the percentage of customers (or revenue) lost in a given period. Two main types: Customer Churn (logo-count churn) and Revenue Churn (MRR/ARR churn). Lower churn dramatically improves LTV and reduces acquisition pressure.

Key points

  • Customer Churn = Churned Customers / Starting Customers × 100
  • Revenue Churn = Churned MRR / Starting MRR × 100
  • Gross vs Net: Net Churn includes expansion from remaining customers
  • Best-in-class SaaS: <5% annual logo churn, negative net revenue churn
Example

Start the month with 1,000 customers. End with 980 (20 churned, 10 added elsewhere — those don't offset). Customer churn = 20/1000 = 2%.

Related terms

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CRM, communications and operations share one database here, so the numbers this term describes are a dashboard rather than a spreadsheet.

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