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Customer churn and revenue churn side by side — because the gap between them tells you who is leaving.
One churn number hides the diagnosis. Customer churn and revenue churn diverge in a way that tells you whether you are losing your smallest accounts or your largest ones — problems with completely different fixes.
Upgrades and expansion, excluding new customers
Count only customers who were there at the start. Including customers who both joined and left within the month distorts the denominator.
The customers leaving are worth 1.5× your average — you are losing larger accounts than typical. That is a more urgent problem than the headline rate suggests.
What each monthly rate means annually
| Monthly | Annual | Average lifetime |
|---|---|---|
| 1% | 11.4% | 100 months |
| 2% | 21.5% | 50 months |
| 3% | 30.6% | 33 months |
| 5% | 46.0% | 20 months |
| 8% | 63.2% | 12.5 months |
At 5% monthly you replace nearly half your customer base every year just to stay flat. That is the treadmill that makes growth feel impossible while the top-of-funnel numbers look fine.
| Segment | Healthy monthly churn |
|---|---|
| Consumer / prosumer | 3–7% |
| SMB SaaS | 3–5% |
| Mid-market | 1–2% |
| Enterprise | Under 1% |
Compare like with like. A consumer app at 5% and an enterprise product at 5% are in entirely different amounts of trouble.
GOOD QUESTIONS
It depends entirely on segment. Enterprise products should be under 1% monthly; SMB SaaS typically runs 3–5%; consumer products 3–7%. Comparing across segments is meaningless — a 5% rate is normal for one and alarming for another.
Customer churn counts accounts lost; revenue churn counts the MRR they represented. If revenue churn is higher, you are losing larger-than-average customers. If lower, you are losing smaller ones. The gap is the diagnosis.
Net revenue churn can be, when expansion from existing customers exceeds what you lose. Customer churn cannot be negative. Negative net revenue churn means your base grows with no new customers at all.
Not by multiplying by twelve. Use 1 − (1 − monthly)^12. At 3% monthly that is 30.6% annually, not 36% — churn applies to a shrinking base each month.