Churn Rate
Churn rate measures the percentage of customers or revenue lost over a given period. Customer churn counts logos lost; revenue churn measures the dollar impact. Both are essential for understanding retention health.
What is Churn Rate?
Churn rate is the percentage of customers (logo churn) or recurring revenue (revenue churn) that a business loses over a specific period. It is the inverse of retention -- if your annual retention is 92%, your annual churn rate is 8%.
Churn is the most fundamental SaaS health metric because it directly determines how fast you need to acquire new customers just to maintain current revenue.
Types of Churn
Customer Churn (Logo Churn)
Customer churn measures the count of customers who cancel, regardless of their revenue contribution.
Customer Churn Rate = Customers Lost in Period / Customers at Start of Period x 100
Example: You started the quarter with 200 customers and 12 cancelled. Customer churn rate = 6%.
Revenue Churn (MRR Churn)
Revenue churn measures the dollar value of lost recurring revenue. This is more meaningful than logo churn because losing a $500/mo customer has a very different impact than losing a $50,000/mo customer.
Revenue Churn Rate = MRR Lost to Cancellations / MRR at Start of Period x 100
Net Revenue Churn
Net revenue churn accounts for expansion from remaining customers. If your surviving customers expanded enough to offset losses, net revenue churn can actually be negative -- which is the goal.
Net Revenue Churn = (Churned MRR - Expansion MRR) / Starting MRR x 100
Negative net revenue churn means your existing customer base is growing even after accounting for losses.
What is a Good Churn Rate?
Benchmarks vary significantly by segment:
| Segment | Annual Churn Benchmark | |---------|----------------------| | Enterprise ($100K+ ACV) | 5-7% | | Mid-market ($15K-100K ACV) | 8-12% | | SMB ($1K-15K ACV) | 15-25% | | Self-serve / PLG | 30-50% |
Monthly churn rates should be roughly 1/12 of annual targets, though churn often clusters around renewal dates rather than distributing evenly.
Why Churn Rate Matters for Renewal Teams
Churn is a lagging indicator -- by the time a customer cancels, the decision was made weeks or months earlier. The job of a renewal team is to detect the signals that predict churn before it happens:
- Declining engagement: fewer logins, lower feature adoption, reduced API calls
- Champion departure: your internal advocate leaves or changes roles
- Support escalation patterns: increasing severity or frustration in tickets
- Renewal timing: accounts approaching renewal without a renewal conversation
- Competitive evaluation: signals of alternative tool evaluation
How AI Agents Help
BaseCommand agents are designed to surface churn signals early. The health scoring engine combines multiple signals into a composite risk score, while specialized agents monitor deal velocity, forecast outcomes, and draft rescue outreach before accounts reach the cancellation point.
Browse the agent fleet to find agents that help reduce churn across your renewal book.