Definition
What is Churn Rate?
The percentage of customers or revenue lost in a given period.
Churn rate measures how quickly a business is losing customers (customer churn) or revenue (revenue churn / MRR churn). High churn is the silent killer of SaaS — a 5% monthly churn means ~46% of the customer base turns over annually, making growth very expensive. Net revenue retention (NRR) captures the combined effect of churn and expansion revenue.
Formula
Monthly Churn Rate (%) = Customers Lost in Month ÷ Customers at Start of Month × 100Example
Starting with 500 customers and losing 20 in a month: churn = 20 ÷ 500 × 100 = 4% monthly (≈ 40% annually).