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Retention

Customer churn

The share of customers who cancelled in a period, counted as logos rather than as revenue.

Customer churn, sometimes logo churn, is the proportion of customers who left:

Customer churn = customers lost in the period รท customers at the start

It weights a $20 account the same as a $20,000 one, which is exactly why it is reported next to churned MRR rather than instead of it. Divergence between the two is informative: high logo churn with low revenue churn means you are losing small accounts, which may be a pricing or segment problem rather than a product one.

Always state the window. Monthly churn of 2% is roughly 22% annually, and the two numbers describe the same business.

Related terms

  • Churned MRR Recurring revenue lost from customers who cancelled outright in the period, whether they chose to leave or their payments stopped working.
  • Involuntary churn Customers lost because a payment failed rather than because they chose to leave. Usually the cheapest churn to recover.
  • Retention curve The share of a cohort still active plotted against months since they started. Whether it flattens is the single most important thing about it.
  • Cohort analysis Grouping customers by when they started and tracking each group over time, so retention and expansion can be read without new customers hiding them.