Customer churn formula
Customer churn rate = Customers lost during the period ÷ Customers at the start of the period × 100. State whether the period is monthly, quarterly or annual.
Example
If 35 of 1,000 starting customers cancel during a month, logo churn is 3.5% for that month. New customers acquired during the month are not added to the starting denominator in this simple calculation.
Logo churn versus revenue churn
Logo churn counts customer accounts. Revenue churn measures lost recurring revenue and can tell a different story when small and large accounts behave differently. Use the metric that matches the decision.
Segment before acting
Break churn down by plan, acquisition cohort, customer age, region and cancellation reason. Check whether the reason is supported by behavior, and pair churn with retention, expansion, gross margin and cash payback.