Churn

Noun · Verb · Startup & VC

Definitions

  1. The rate at which customers cancel their subscriptions or stop using a product. A SaaS company's most watched (and most dreaded) metric. Customer churn counts heads; revenue churn counts dollars.

    In plain English: The percentage of customers who quit using your product in a given time period — the leaky bucket that makes growth a treadmill.

  2. Logo churn (customer count) and revenue churn (dollar amount) can tell very different stories. Losing 10 small customers while retaining your enterprise accounts means high logo churn but low revenue churn. Net revenue retention above 100% means expansion from existing customers exceeds churn.

    Example: 'Our logo churn is 5% monthly but net revenue retention is 115%. We're losing small accounts but our enterprise customers keep expanding.'

    Source: metric nuance

Etymology

1800s
From Old English 'cyrnan' — to agitate cream into butter — metaphorically extended to turbulent movement
1990s
Telecom companies adopt 'churn rate' for customer turnover; SaaS companies inherit the metric
2010s
Churn becomes the defining SaaS metric — even small changes in monthly churn compound dramatically over a year

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