The percentage of customers who cancel their subscription over a given period, usually a month.
Customer churn rate = (customers lost in period ÷ customers at start of period) × 100
You start the month with 200 customers and 12 cancel.
(12 ÷ 200) × 100 = 6% monthly customer churn
Customer churn rate (also called logo churn) measures how many customers you lose over a period as a share of how many you started with. It counts customers, not revenue — losing a £10/mo customer and a £10,000/mo customer each count as one churned logo.
The standard formula divides customers lost during the period by the number of customers at the start of the period. Be consistent about whether new customers acquired mid-period are included in the denominator — most teams exclude them to keep the measure clean.
Logo churn tells you about product-market fit and satisfaction. To understand the financial impact, pair it with revenue churn, which weights each cancellation by the money it took with it.
Churn is the silent killer of subscription growth. High churn means you are filling a leaky bucket — every new customer just replaces one you lost. Lowering churn compounds: it lifts lifetime value, lengthens payback, and makes growth far cheaper to sustain.
Healthy SaaS: roughly 5–7% monthly logo churn for SMB-focused products, and under 1% monthly (often quoted annually as 5–7%) for enterprise.
Customer churn counts logos lost; revenue churn weights each loss by the MRR it removed. A single large account churning can mean low customer churn but high revenue churn.
For SMB-focused SaaS, 5–7% monthly logo churn is common; enterprise products typically run under 1% per month. Lower is always better, and the goal is to push toward net revenue retention above 100%.
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