Churn
Churn definition for SaaS and AI founders: what it means, how to calculate it, and common pitfalls when reading it in dashboards.
Churn is the share of customers (logo churn) or recurring revenue (revenue churn) lost in a period.
Formula
Gross MRR churn % = Churned MRR ÷ Starting MRR × 100
In practice
Monthly and annual churn are not interchangeable: 3% monthly is roughly 31% annually, not 36%.
Related terms
Related
- ARPAAverage MRR per paying customer.
- ARRAnnualized recurring revenue: MRR multiplied by twelve.
- CACSales and marketing spend per new customer.
- COGSThe direct cost of delivering your product to existing customers.
- Contribution marginRevenue minus all variable costs, including variable sales costs.
- Expansion MRRMRR added by existing customers through upgrades or more seats.
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