Logo Churn vs Revenue Churn
| Metric | Logo Churn | Revenue Churn |
|---|---|---|
| Definition | Customers lost ÷ Total customers | Revenue lost ÷ Total revenue |
| Focus | Customer count | Dollar impact |
| Use Case | Customer success capacity | Financial health |
| Example | 10 of 100 customers churned = 10% | $50k of $500k MRR churned = 10% |
💡TL;DR
Logo Churn = % of customers lost. Revenue Churn = % of revenue lost. Scenario A: 10 SMB customers ($500 each) churn = 10% logo churn, 5% revenue churn (if you have enterprise customers). Scenario B: 1 enterprise customer ($5k) churns = 1% logo churn, 5% revenue churn. Track both: logo churn for CSM workload, revenue churn for financial impact. Low logo + high revenue = big customers leaving.
Definition
Two related but distinct churn metrics. Logo Churn (customer churn) measures the percentage of customers who cancel. Revenue Churn measures the percentage of revenue lost to cancellations and downgrades. They often differ significantly based on which customer segments churn.
🏢What This Means for SMB Teams
SMB-focused SaaS often has high logo churn (10-15% annually) but manageable revenue churn if they retain larger accounts. Watch for revenue churn exceeding logo churn—it means your best customers are leaving.
Track MRR, churn, CAC payback—AI acts when metrics slip.
Metrics that matter, actions that move them.
📋Practical Example
A 35-person vertical SaaS had "healthy" 8% logo churn but 14% revenue churn. Investigation revealed: SMB customers (80% of logos, 40% of revenue) had 6% logo churn, but enterprise customers (20% of logos, 60% of revenue) had 12% logo churn. They were losing their best customers. Root cause: enterprise customers needed features SMBs didn't. They prioritized enterprise feature requests, hired an enterprise CSM. After 6 months, enterprise logo churn dropped to 5%, revenue churn fell to 7%.
🔧Implementation Steps
- 1
Calculate both metrics monthly: logo churn and revenue churn.
- 2
Segment by customer size: SMB, mid-market, enterprise.
- 3
Alert when revenue churn > logo churn by more than 2x.
- 4
Analyze churned customers by segment to identify patterns.
- 5
Set separate targets for each metric based on customer mix.
❓Frequently Asked Questions
Which metric is more important?
Revenue churn for financial health; logo churn for operational planning. If you must pick one, revenue churn matters more to investors and board. But watching both reveals where to focus retention efforts.
What about gross vs. net revenue churn?
Gross revenue churn = churned + downgrade revenue only (always positive). Net revenue churn = gross churn minus expansion revenue (can be negative if expansion > churn). Net negative churn is the "holy grail"—you grow from existing customers.
⚡How Optifai Uses This
Optifai tracks both logo and revenue churn by segment, alerting when revenue churn significantly exceeds logo churn. Churn risk signals identify at-risk high-value accounts for proactive intervention.
📚References
- •
- •
Related Terms
NRR (Net Revenue Retention)
The percentage of recurring revenue retained from existing customers after accounting for expansion, contraction, and churn. NRR = (Starting MRR + Expansion - Contraction - Churn) ÷ Starting MRR × 100. NRR >100% means you grow even without new customers.
Customer Retention
The ability of a company to keep its customers over time, measured as retention rate (percentage of customers who continue doing business over a period).
Churn Risk Signals
Behavioral indicators that predict customer churn before it happens. Common signals include: declining login frequency, reduced feature usage, support ticket spikes, NPS score drops, billing page visits, and engagement with competitor content. Early detection enables proactive intervention.
Expansion Revenue
Additional recurring revenue from existing customers through upsells (higher tier), cross-sells (additional products), or seat expansion. Expansion Revenue = Ending MRR from Existing Customers - Starting MRR from Same Customers (excluding churn).