Churn Rate
The percentage of customers who stop using your product in a given period.
Definition
Churn rate measures customer attrition. Customer churn = (customers lost ÷ total customers at start) × 100. Revenue churn uses the same formula with MRR instead of customer count. Net revenue churn subtracts expansion revenue — if expansion exceeds churn, you have negative churn (the holy grail).
Why it matters for founders
High churn is a leaky bucket — you can't grow if customers leave as fast as they arrive. For SaaS, monthly churn above 3% makes scaling nearly impossible. Reducing churn is often more impactful than increasing acquisition.
Example
You start the month with 200 customers. 10 cancel. Customer churn = 5%. If those 10 customers paid $100/month and you had $20,000 MRR, revenue churn = $1,000 ÷ $20,000 = 5%.
How Foundra helps
Foundra's Onboarding & Activation card in the Build phase helps you design first-run experiences that reduce early churn — the most critical retention period.
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Related terms
Monthly Recurring Revenue (MRR)
The predictable revenue your business generates every month from subscriptions.
Lifetime Value (LTV)
The total revenue a customer generates over their entire relationship with your business.
Customer Acquisition Cost (CAC)
The total cost to acquire one new customer.
Net Revenue Retention (NRR)
The percentage of revenue retained from existing customers after accounting for churn, downgrades, and upgrades.