Churn
The rate at which paying subscribers cancel, measured monthly or annually. High churn eats growth faster than any acquisition strategy can outrun.
Churn is the percentage of your paying customers who cancel in a given period. Monthly churn is usually reported; annual is a rollup. A 5% monthly churn rate means about half your customers cancel over a year — a devastating number for a subscription business.
Two forms of churn matter: - **Logo churn**: how many customers left, regardless of size. - **Revenue churn**: how much MRR you lost. A big customer churning weighs more than a small one leaving.
Related: **net revenue retention (NRR)** measures revenue churn net of expansion. NRR of 120% means existing customers grew their spend by 20% net of churn — a very healthy signal. NRR of 80% means the business is shrinking on the same customer base, and no amount of new-logo acquisition will fix it.
Churn's math is brutal. A product with 8% monthly churn caps out at about 12 months of average customer lifetime — everything you spend to acquire a customer needs to pay back inside a year. A product with 2% monthly churn has ~50 months of lifetime; you can invest in acquisition, product, and support at a very different pace.
Voluntary churn (customers actively canceling) is different from involuntary churn (failed payments, expired cards). Involuntary churn is often 30-50% of total churn and is fixable with better dunning (payment-retry) systems — the customer didn't want to leave; their card just declined.