Customer Churn Rate

Percentage of customers who leave. Critical insight: 5% monthly churn compounds to 46% annual churn.

Logo Churn = Customers lost / Starting customers Revenue Churn = Lost MRR / Starting MRR (more important)

What it measures

Percentage of customers who cancel or stop using your product over a period. Revenue churn matters more than logo churn: losing one $10K customer differs vastly from losing ten $100 customers. Small monthly numbers compound dangerously—5% monthly churn means losing 46% of customers annually.

What to watch

B2C SaaS: Target 3-5% monthly (good), <2% (great)
B2B SMB/Mid-Market: Target 2.5-5% monthly (good), <1.5% (great)
B2B Enterprise: Target 1-2% monthly (good), <0.5% (great)

In practice

An online learning platform saw monthly churn spike from 6% to 11% after a price increase. But when they segmented by engagement, high-engagement users actually churned less. The spike came from "zombie" subscribers who rarely used the product. The team let them churn and focused on converting engaged free users instead.

Illustrative scenario — a representative composite, not a specific company.

Tools: Cohort Analysis, Exit Surveys, Churn Prediction Models.