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Business Term

解約率(Churn Rate)

Churn Rate / チャーンレート

Churn rate is the share of customers or recurring revenue lost during a period. Splitting customer churn from revenue churn shows where MRR and ARR are leaking.

Formula
Churned customers / starting customers
Use when
Shows whether ARR or MRR growth is being masked by heavy new acquisition.
Watch out
Cancellations, expired contracts without renewal, lost contract MRR
Updated: 2026. 05. 09.Quality: ReviewedSources: 3
What it means

Churn rate measures how quickly customers or recurring revenue leave a subscription business. Logo churn counts lost customers, while revenue churn measures lost MRR or ARR. The metric is most useful when segmented by customer size, cohort, channel, onboarding path, and churn reason, because each segment points to a different operational fix.

How to calculate it

The basic formula divides customers or recurring revenue lost during the period by the starting customer count or recurring revenue base. SaaS teams usually separate logo churn, gross revenue churn, and net revenue churn. Logo churn | Churned customers / starting customers | Measures customer-count leakage Revenue churn | Churn MRR / starting MRR | Measures recurring revenue lost from cancellations Net revenue churn | (Churn MRR + Contraction MRR - Expansion MRR) / starting MRR | Shows whether expansion offsets losses

LensFormula / treatmentWhen to use it
Logo churnChurned customers / starting customersMeasures customer-count leakage
Revenue churnChurn MRR / starting MRRMeasures recurring revenue lost from cancellations
Net revenue churn(Churn MRR + Contraction MRR - Expansion MRR) / starting MRRShows whether expansion offsets losses
What counts / what does not

Churn definitions must distinguish cancellation, non-payment, pause, downgrade, and scheduled contract end. Mixing them hides the cause of the revenue leak. Include | Cancellations, expired contracts without renewal, lost contract MRR | The recurring base is gone Exclude | Temporary pauses, recoverable failed payments, same-account plan switches | They may not represent true customer loss Define carefully | Downgrades, seat reductions, delinquency, mid-period cancellations | Treatment differs between logo and revenue churn

ItemTreatmentWhy it matters
IncludeCancellations, expired contracts without renewal, lost contract MRRThe recurring base is gone
ExcludeTemporary pauses, recoverable failed payments, same-account plan switchesThey may not represent true customer loss
Define carefullyDowngrades, seat reductions, delinquency, mid-period cancellationsTreatment differs between logo and revenue churn
What moves the number

Churn moves when product fit, onboarding, service quality, billing reliability, customer segment, or pricing changes. Early churn | Customers leave soon after signup | Check ICP fit, onboarding, and expectation setting Mature churn | Long-tenured customers leave | Check product value, competition, and organizational changes Revenue churn | Large contracts shrink or cancel | Prioritize ARR and NRR impact Payment churn | Failed payments cause loss | Improve dunning, card updates, and billing UX

DriverMetric impactWhat to watch
Early churnCustomers leave soon after signupCheck ICP fit, onboarding, and expectation setting
Mature churnLong-tenured customers leaveCheck product value, competition, and organizational changes
Revenue churnLarge contracts shrink or cancelPrioritize ARR and NRR impact
Payment churnFailed payments cause lossImprove dunning, card updates, and billing UX
When it helps

Shows whether ARR or MRR growth is being masked by heavy new acquisition. Guides investment across onboarding, customer success, product quality, pricing, and billing operations. Protects LTV, CAC payback, hiring plans, and revenue forecasts from optimistic assumptions.

  • Shows whether ARR or MRR growth is being masked by heavy new acquisition.
  • Guides investment across onboarding, customer success, product quality, pricing, and billing operations.
  • Protects LTV, CAC payback, hiring plans, and revenue forecasts from optimistic assumptions.
How to use it
  • Track logo churn and revenue churn separately.
  • Large-account churn can damage ARR even when customer-count churn looks low.
  • Strong acquisition does not cancel out poor retention economics.
  • Early churn often points to onboarding or ICP mismatch.
  • Use cohorts and trend lines rather than one monthly number.
Decision cautions

Churn rate is easy to quote and easy to misuse. The same headline number can mean very different things depending on customer mix and revenue concentration. Low logo churn can still hide high contraction among enterprise accounts. Annualizing monthly churn by multiplying by 12 can misstate compounding effects. Voluntary churn and involuntary payment churn need different fixes.

  • Low logo churn can still hide high contraction among enterprise accounts.
  • Annualizing monthly churn by multiplying by 12 can misstate compounding effects.
  • Voluntary churn and involuntary payment churn need different fixes.
Read with

Read churn with ARR, MRR, NRR, LTV, and CAC so the team sees both retention health and growth efficiency. ARR / MRR | Recurring revenue base | Shows how much revenue churn is leaking NRR | Existing-customer revenue retention | Shows whether expansion offsets churn LTV | Future customer value | Higher churn usually lowers LTV CAC | Acquisition cost | High churn makes acquisition harder to pay back

MetricRoleWhy read together
ARR / MRRRecurring revenue baseShows how much revenue churn is leaking
NRRExisting-customer revenue retentionShows whether expansion offsets churn
LTVFuture customer valueHigher churn usually lowers LTV
CACAcquisition costHigh churn makes acquisition harder to pay back
Example

A B2B SaaS company reports stable 2% monthly logo churn, but revenue churn shows that large-account contractions are removing 4% of starting MRR each month. New bookings hide the issue in total MRR. The team splits churn by cohort and contract size, then focuses onboarding and quarterly business reviews on larger customers. Contraction MRR falls, NRR improves, and the ARR bridge becomes easier to explain in board meetings.

Compare with

Churn rate | Share of customers or revenue lost | Measures leakage Retention rate | Share of customers or revenue kept | Same system, but framed around what remains NRR | Existing revenue retained after expansion and losses | Includes upsell and contraction GRR | Existing revenue retained before expansion | Shows downside pressure directly Downgrade rate | Share moving to lower plans or fewer seats | Captures revenue loss without logo loss

MetricDifferenceWhy read together
Churn rateShare of customers or revenue lostMeasures leakage
Retention rateShare of customers or revenue keptSame system, but framed around what remains
NRRExisting revenue retained after expansion and lossesIncludes upsell and contraction
GRRExisting revenue retained before expansionShows downside pressure directly
Downgrade rateShare moving to lower plans or fewer seatsCaptures revenue loss without logo loss
Common mistakes
  • There is only one churn rate. In practice, logo, revenue, voluntary, and involuntary churn answer different questions.
  • New sales can make churn irrelevant. High churn damages LTV and CAC payback even when top-line growth looks good.
  • Lower churn is always good. Keeping poor-fit customers can increase support cost and distract the product roadmap.
Frequently asked questions
Should I use logo churn or revenue churn?

Use both. Logo churn shows how many customers leave; revenue churn shows the financial impact. B2B SaaS teams with varied contract sizes should treat revenue churn as a core operating metric.

Is a downgrade churn?

Not logo churn if the customer stays. The lost MRR should still be counted as contraction and reflected in revenue churn or NRR.

Do failed payments count as churn?

If they are not recovered, yes. Track them separately as involuntary churn because billing operations, not product value, may be the root cause.

Sources
SourcesKindLink
OpenStax: Principles of MarketingTier-S open textbookOpen
Wikipedia: Churn rateChurn referenceOpen
Wikipedia: Customer retentionRetention referenceOpen