β Glossary
Churn Rate
The percentage of customers who stop using a product or cancel their subscription during a given time period.
Monthly churn of 5% sounds small but means losing half your customers every year (compound effect). For SaaS: under 3% monthly churn is acceptable for SMB products, under 1% for enterprise. Net revenue churn includes expansion revenue (upsells) β you can have negative net churn if existing customers upgrade faster than others leave. Reducing churn by 1% often has more impact than acquiring 10% more customers because retained customers compound in value.