Logo churn counts lost customers, not lost revenue. It treats a small account and a large one the same, which makes it a good measure of how many customers you keep and a poor measure of revenue impact.
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How to calculate it
Divide the number of customers lost during a period by the number at the start. Use a consistent period and decide how to treat downgrades and paused accounts before you start.
Read it with revenue churn
A business can have high logo churn but low revenue churn if mostly small accounts leave. Reviewing both shows where the real problem lies.
Common mistakes
Mixing logo and revenue churn
State which one a number refers to, or comparisons mislead.
Frequently Asked Questions
Both, since they answer different questions about retention.
Keep reading
- Churn Rate: The rate at which a SaaS company loses customers or recurring revenue over a period. Logo churn counts accounts; revenue churn counts dollars.
- Gross Revenue Retention: The share of recurring revenue kept from existing customers over a period, counting only losses from churn and downgrades. It can never exceed 100%.
- Net Revenue Retention: The share of recurring revenue kept from an existing customer group over a period, including expansion, after downgrades and churn. Above 100% means growth.
- Negative Churn: When expansion revenue from existing customers is larger than the revenue lost to cancellations and downgrades, so the existing base grows on its own.
- Acquisition Channel: A route through which a company finds new customers, such as organic search, paid ads, referrals, partners or outbound sales. Each has its own costs and limits.
- Annual Recurring Revenue: The yearly value of a SaaS company's active subscription contracts, excluding one-off fees. The headline size metric for most subscription businesses.
- Average Contract Value: The average annual value of a customer contract, excluding one-off fees. It shapes which sales motion and acquisition channels a SaaS company can afford.
- Average revenue per account: Average revenue per account is recurring revenue divided by the number of paying accounts.
