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.

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