All terms
Growth
Churn
The rate at which customers cancel or stop paying for a recurring service, typically expressed as a monthly or annual percentage.
In plain English
How fast you're losing customers. Quietly the single most important metric for any subscription business.
Example
Start month with 100 customers, end with 95 (after new signups offset some loss) → 5% gross churn this month.
Formula
Gross churn % = Customers lost in period / Customers at start of period × 100
Net churn factors in expansion revenue from existing customers.
Why it matters
Below 1% monthly churn for SMB SaaS is healthy. 2-3% is workable. 5%+ means the product doesn't deliver enough value — fix retention before pouring money into acquisition.
Common mistakes
- Reporting net revenue churn while gross logo churn tells a different story
- Ignoring annual customer churn because monthly churn looks low