Churn rate measures the percentage of customers or revenue lost in a period. Learn how churn fits into SaaS KPI trees and ARR decomposition.
Churn rate is the percentage of customers (logo churn) or revenue (revenue churn) lost during a specific period. In a SaaS KPI tree, churned ARR is a direct subtraction from the ARR waterfall: ARR = Beginning ARR + New + Expansion - Contraction - Churn. Reducing churn by even 1-2 percentage points can have a larger impact on growth than increasing new sales by 10%.