When it comes to your Churn Rate, there are two different but very important types of churn for your business to track: Customer Churn and Revenue Churn.

Your Customer Churn is the amount or percentage of customers which your business has lost in a given period. It is calculated through taking the number of customers who you have lost (churned customers) divided by your total customer base.


Customer Churn (%) = (Churned Customers)/(Total Customers)

Similarly, Revenue Churn is the amount or percentage of revenue that you have lost as a result of churned customers. It is typically calculated in terms of MRR, by taking your revenue lost (churned revenue) for the current month and dividing that by the prior month MRR.

Revenue Churn (% MRR) = (Current Mo. MRR Churn)/(Previous Mo. MRR)

It is important to note that Customer and Revenue Churn are two different calculations, even though they might seem to be the same. For example, if you lose your highest paying customer your customer churn will only be equal to that one customer, where your revenue churn will be significantly higher.