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
NRR (Net Revenue Retention)GRR (Gross Revenue Retention)LTV (Customer Lifetime Value)Customer Health Score
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