Churn Rate

Churn is usually tracked two ways that tell different stories: customer churn (the raw percentage of accounts that cancel) and revenue churn (the percentage of recurring revenue lost, which weighs a large account leaving more heavily than a small one). A business can hold flat customer churn while revenue churn worsens if it's disproportionately losing its higher-value accounts, so tracking only one of the two hides real risk.

Net revenue churn also accounts for expansion — existing customers upgrading or adding seats — which is why some SaaS businesses report negative net churn: revenue from expansion among retained customers exceeds what was lost to cancellations, even while some customers are still leaving.

Churn is a lagging indicator of product and onboarding quality more often than a marketing problem — a high-CAC channel bringing in customers who churn quickly is usually a targeting or onboarding mismatch, not proof the channel itself is broken, which is why churn and CAC are usually read together rather than in isolation.