Definition
Churn is the rate at which customers or recurring revenue are lost over a period, often measured as logo or revenue churn.
Why it matters
Small changes in churn have outsized impact on LTV, payback, and growth efficiency.
Pricing implications
Pricing that misaligns value can increase churn; use renewal pricing and usage caps to protect retention.
Measurement tips
Use consistent windows, separate cancellations from downgrades, and track cohorts by start month.
Checklist
- Define logo churn and revenue churn separately.
- Use a standard time window (monthly or annual).
- Separate new, expansion, and contraction components.
- Track churn by segment and plan.
- Measure churn drivers (price, product, support).
- Monitor early-life churn separately.
- Validate churn with cohort analysis.
- Align churn targets with LTV goals.