SaaS & growth
Churn Rate
Formula reviewed by Tahir Asif, CMA
The percentage of customers (or revenue) lost over a period, the inverse of retention.
Customer churn rate is the percentage of customers who cancel or don't renew during a period. Revenue churn rate measures the same idea in dollar terms, which can differ meaningfully from customer churn if the customers who leave are disproportionately large or small accounts.
Churn compounds: even a modest-looking monthly churn rate erodes a much larger share of the customer base annually than it appears to at a glance, which is why it's usually tracked both monthly and as an annualized figure.
Customer churn rate
Customers lost ÷ Customers at start of period
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