Churn

Rate at which customers cancel or stop using a product.

In depth

Gross churn = lost revenue / starting revenue. Net churn = (lost - upsell) / starting revenue. Best-in-class SaaS achieves negative net churn (upsells exceed losses). High churn devastates LTV and unit economics.

Related terms

ARR (Annual Recurring Revenue)

Annualized run-rate of subscription or recurring contract revenue.

LTV (Lifetime Value)

Total profit a customer generates over their relationship with a company.

CAC (Customer Acquisition Cost)

Sales and marketing spend divided by new customers acquired.

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