Customer Metrics

Churn Rate

The percentage of customers or revenue lost during a given period due to cancellations or downgrades.

Churn is the gravitational force working against every subscription business. Even a modest monthly churn rate compounding over a year creates severe revenue leakage — 3% monthly churn means losing roughly 30% of revenue annually. Churn is measured in two ways: logo churn counts the proportion of customers who left, while revenue churn counts the proportion of revenue that disappeared. Both matter, but revenue churn is more directly connected to the financial model. High churn early in a customer's life often points to onboarding failures or poor-fit customers, while high churn later suggests competitors, changing needs, or product stagnation. Reducing churn by even one percentage point can have a larger long-term revenue impact than acquiring many new customers.