Churn Rate

Churn rate is the percentage of customers (logo churn) or revenue (revenue churn) lost during a specific time period. If you start the month with 100 customers and lose 5, your monthly logo churn is 5%. If you start with $100K MRR and lose $8K, your monthly revenue churn is 8%.

Churn rate matters in GTM operations because it’s the leak in your bucket. You can pour as much new business in as you want — if churn is high, growth stalls or reverses. A company adding $100K in new MRR per month with 5% monthly churn needs to acquire increasingly more just to maintain the same growth rate. At scale, churn becomes the single biggest constraint on growth.

The distinction between logo churn and revenue churn is important. Losing ten $1K/month customers is very different from losing one $10K/month customer, even though both represent $10K in churned MRR. Revenue churn weighted by account value gives a more accurate picture of business impact.

Net revenue retention (NRR) is the related metric that accounts for both churn and expansion. If you lose 5% of revenue to churn but gain 8% from upsells and expansions, your NRR is 103% — meaning your existing customer base grows even without new logos. Best-in-class SaaS companies target NRR above 110%.

Understanding why customers churn is more valuable than just tracking the number. Common causes include poor onboarding, lack of product adoption, missing features, champion departure, budget cuts, and competitive displacement. Each cause requires a different intervention. Analytics helps you identify churn patterns and at-risk accounts before they cancel.