What is Churn Rate?
How fast you lose customers or revenue - the single biggest enemy of recurring-revenue growth.
Churn Rate: definition
In a recurring-revenue business, churn is the leak in the bucket - every new customer must first replace the ones lost before growth begins. Churn is measured two ways: customer (logo) churn counts customers lost, while revenue churn counts recurring revenue lost, which better reflects financial impact because not all customers are equal in size. Small differences in churn compound dramatically into lifetime value.
Churn rate
Customer Churn = Customers Lost ÷ Customers at Start × 100
Revenue churn = MRR lost ÷ starting MRR × 100. Gross revenue churn ignores expansion; net revenue churn subtracts expansion and can be negative.
How Fintra handles it
Fintra computes customer and revenue churn from actual billing records, and pairs them with cohort curves so you see not just the headline rate but which cohorts churn and when. Because churn feeds lifetime value and retention on the same model, its financial impact - and the payoff from reducing it - is grounded in real numbers.
- Customer and revenue churn computed from billing records
- Cohort curves show where and when churn concentrates
- Churn feeds LTV and retention so its impact is quantified
Worked example
Frequently asked questions
What is the difference between customer churn and revenue churn?
Customer (logo) churn counts the percentage of customers lost. Revenue churn counts the percentage of recurring revenue lost. Revenue churn is often more meaningful because it weights larger customers more heavily - losing one big account can matter more than losing several small ones.
What is a good churn rate?
It varies by market and customer size, but for many subscription businesses monthly revenue churn in the low single digits or below is healthy, and enterprise products aim lower still. Because churn compounds, even small reductions meaningfully increase lifetime value.
What is negative churn?
Negative churn occurs when expansion revenue from existing customers exceeds the revenue lost to churn and downgrades, so the customer base grows in value even without new customers. It corresponds to net revenue retention above 100% and is a powerful growth engine.
How does churn affect lifetime value?
Strongly. Average customer lifetime is roughly the inverse of churn, so lower churn extends lifetime and raises LTV disproportionately. Reducing churn is often the highest-leverage way to improve unit economics, which is why Fintra ties the two together.
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