Churn
Churn is the rate at which a subscription business loses customers (customer or logo churn) or recurring revenue (revenue churn) in a period. It is expressed as lost ÷ starting base, per month or per year.
Formula
Worked example
Starting a month with 400 customers and losing 10 is 2.5% monthly customer churn — which compounds to roughly 26% annually, not 30%, because the base shrinks each month.
Customer churn and revenue churn routinely diverge: if your smallest customers churn most (typical), revenue churn runs below customer churn. Track both — customer churn measures product-market fit breadth, revenue churn measures financial damage.
The classic mistake is annualising by multiplying by 12. Churn compounds: annual churn = 1 − (1 − monthly churn)^12. At 5% monthly that is 46%, not 60%.
Compute it: Churn rate calculator