Formula
customer churn = customers lost / customers at start revenue churn = MRR lost / MRR at start
Churn rate
Churn rate is the percentage of customers or revenue lost over a period, usually measured monthly.
Worked example
Losing 12 of 400 customers in a month is 3 percent customer churn.
Benchmark
SMB SaaS commonly runs 3 to 5 percent monthly. Products sold to larger companies target under 1 percent.
Customer churn counts logos, revenue churn counts money, and they diverge when accounts differ in size. Losing small accounts puts revenue churn below customer churn; losing large ones does the reverse. Watching both tells you which customers you are losing.
Churn compounds, which is why small differences matter so much. Five percent monthly churn loses roughly 46 percent of customers in a year.
Related terms
Keep this number live
Plainhub computes churn rate from money you record in plain words, so it is current when you need it rather than the night before a board meeting.
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