Churn.
aka customer churn, attrition (customer version), logo churn / revenue churn
Customers who leave. The number that quietly eats growth.
What it actually means
Churn is the rate at which customers stop doing business with a company over a period, usually a month or a year. For subscription businesses it is the single most watched number after revenue, because every lost customer has to be replaced before growth even starts.
The basic formula: customers lost in the period divided by customers at the start. Lose 5 of 100 in a month and monthly churn is 5%, which sounds small and compounds to losing nearly half your customers in a year.
Two versions matter. Logo churn counts customers. Revenue churn counts money, which is different when big customers leave and small ones stay. The flattering cousin is net revenue retention: if the customers who stayed spent more, that can outweigh the ones who left, which is why “negative churn” is the phrase every SaaS company wants in its deck.
Where you'll hear it
Monthly logo churn is 3.1%, but revenue churn is 1.4% because the accounts leaving are small. Net revenue retention is 108%, so the base is still growing on its own.
Translation: we are losing small customers, keeping big ones, and the ones who stay buy more. Not perfect, but healthy.
Also in investor updates, in any subscription business (streaming, gyms, software, meal kits), and in marketing meetings, where the argument is always whether to spend on finding new customers or keeping the current ones. Keeping them is almost always cheaper.
The pop-culture version
The debut album pulled in a million listeners. The second album arrives, and 300,000 of them do not show up. They moved on, grew up, found another band. That is churn: 30% of the audience, gone before the new material even gets a chance.
The band now has two jobs. Find new listeners to replace the 300,000, and work out why they left. If it was the sound, that is fixable. If it was that the first album was a one-off moment, the whole model needs rethinking.
Subscription businesses live this every month. The question is never “did we lose customers?” (always yes). It is “are we losing them faster than we can find new ones, and why?”
High churn makes every other number lie. Impressive new-customer figures with 8% monthly churn is a bucket with a hole in it, and investors check the hole before they admire the tap.
Say it like you mean it
“Monthly revenue churn is 1.4% and net revenue retention is 108%, driven by expansion in the top 20 accounts.”
Names the version of churn, the period, and what is offsetting it.“Churn is 3%.”
Monthly or annual? Logos or revenue? 3% monthly is a problem; 3% annually is world-class. The unit is the whole meaning.If someone quotes churn without a period, ask. The same number means “fine” or “emergency” depending on whether it is per month or per year.
Why customers leave, how to measure it properly and the retention levers that actually move the number.
Decoded next
Decoded by the Kurums editorial team. Kurums Decoded translates the language of business for people who are new to it. Definitions are kept short on purpose; the serious version above goes deep. Nothing here is financial, legal or career advice.
Discover more from Kurums | Business Intelligence
Subscribe to get the latest posts sent to your email.
