Logo churn
LO-go churn
The percentage of customers (logos) you lose in a period. Counts customers, not dollars.
Logo churn counts how many customers you lost, regardless of how much they paid. If you started the quarter with 200 customers and 10 left, your logo churn rate is 5%.
Logo churn and revenue churn tell different stories. Losing ten $1k customers is the same logo churn as losing ten $100k customers, but the revenue impact is 100x different. A company with 2% logo churn and 8% revenue churn is losing its biggest customers. A company with 8% logo churn and 2% revenue churn is losing tiny accounts that barely mattered.
For SMB-focused businesses, some logo churn is inevitable. Small companies go out of business, get acquired, or outgrow your product. Annual logo churn below 10% is good for SMB. For enterprise, below 5% annually is the target. If your enterprise logo churn exceeds 10%, you have a product or customer success problem.
Examples
A PLG company with high volume, low ACV.
You start the year with 5,000 customers. You lose 750. Logo churn is 15%. But those 750 customers averaged $200/month each. The $1.8M in churned revenue is 4% of your $45M ARR base. The big accounts are staying.
An enterprise company loses a marquee customer.
You have 80 enterprise customers. One $2M ARR customer leaves. Logo churn is 1.25%. Revenue churn is 6.7%. One logo devastated the numbers.
Board reviews churn metrics.
The board asks for both logo and revenue churn because each reveals different problems. High logo churn with low revenue churn means SMB leakage. Low logo churn with high revenue churn means big accounts are contracting.
In practice
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Frequently asked questions
What is a good logo churn rate?
For enterprise SaaS, below 5% annually. For mid-market, below 10%. For SMB, below 15%. PLG products with free-to-paid conversion may see higher logo churn on the smallest accounts and that can be acceptable if revenue retention is strong.
How is logo churn different from revenue churn?
Logo churn counts customers lost. Revenue churn counts dollars lost. They diverge when your customer base includes accounts of very different sizes. Always track both.
Related terms
The percentage of recurring revenue lost from cancellations and downgrades in a period. Measures the dollar impact of attrition.
The rate at which customers cancel or do not renew. Measured as logo churn (customers lost) or revenue churn (dollars lost).
The percentage of revenue retained from existing customers before counting expansion. Measures pure customer stickiness.
The percentage of revenue retained from existing customers after expansion, contraction, and churn. Above 100% means you grow without new sales.
The team and practice of ensuring customers achieve their goals with your product. Owns retention, expansion, and advocacy.
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