Key CX Metrics:
How Do You Measure Churn?
Churn quantifies customer or revenue loss over a period. Measure it with logo churn (accounts lost), revenue churn (ARR/MRR lost), and net revenue churn (after upgrades). Tie every result to cohorts, product usage, and Finance for decisions that reduce attrition. CX = Customer Experience.
Calculate churn in three complementary ways and report all three: Logo Churn = customers lost ÷ customers at period start; Gross Revenue Churn = recurring revenue lost from existing customers ÷ recurring revenue at start (exclude expansion); Net Revenue Churn = (revenue lost − expansion) ÷ revenue at start. Use cohorts, separate voluntary vs. involuntary churn, and reconcile monthly with Finance.
Principles For Accurate Churn Measurement
The Churn Tracking Playbook
A practical sequence to quantify loss, find causes, and prioritize retention investments.
Step-By-Step
- Standardize definitions — What is a customer? When is churn recognized (cancel vs. end-of-term)? How are free plans handled?
- Build cohorts & identity — Assign each account to a vintage, ensure account IDs across CRM, billing, and product analytics.
- Compute three rates — Logo churn, gross revenue churn, and net revenue churn; include rolling 3/6/12-month views.
- Segment & explain — Split by plan, ARR bands, industry, region, lifecycle stage, and onboarding completion.
- Trace causes — Map churn to drivers (price, value, adoption, support). Tag each churn event with a primary reason.
- Instrument early-warning — Health score combining product use, support, and sentiment (CSAT/CES); set save playbooks.
- Reconcile with Finance — Match churn dollars to the P&L; align GRR/NRR, CLV, and payback assumptions.
- Decide & iterate — Publish an exec dashboard; fund plays that demonstrably reduce churn and improve net retention.
Churn Metrics: When To Use What
| Metric | Best For | Data Needs | Pros | Limitations | Cadence |
|---|---|---|---|---|---|
| Logo Churn Rate | Customer count health & onboarding quality | Customer list, status, start-of-period counts | Simple; universal; great for volume businesses | Ignores deal size differences | Monthly / Quarterly |
| Gross Revenue Churn | Measuring pure revenue loss | ARR/MRR ledger by account, revenue at start | Clear view of leakage before expansion | Does not reflect upgrades | Monthly / Quarterly |
| Net Revenue Churn | Executive retention KPI (ties to NRR) | Losses and expansions by existing accounts | Accounts for upsell/cross-sell | Can hide poor logo retention | Monthly / Quarterly |
| Involuntary Churn | Payment failure prevention | Billing declines, dunning outcomes | Highly actionable with retries & comms | Varies by payment rails/markets | Weekly |
| Cohort Survival / Retention Curve | Long-term health and CLV modeling | Vintage tagging, time-to-event data | Shows decay over time; isolates seasonality | Requires consistent cohorting | Monthly refresh |
Client Snapshot: From Leakage To Lift
A B2B platform split churn by cohort and cause, then launched save plays for involuntary churn and low-adoption segments. In two quarters, gross revenue churn dropped from 3.8% to 2.1% monthly, logo churn improved 24%, and net revenue churn turned neutral as expansion outpaced losses.
Connect churn insights to RM6™ and The Loop™ so retention plays, onboarding, and success motions compound growth.
FAQ: Measuring Churn
Fast answers tuned for executives and quick-answer snippets.
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