Glossary term

churn

Customer Churn

The rate at which customers stop using a product or service over a given period.

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When you'd see it: Subscription businesses talk about churn constantly. Monthly churn rate, annual churn, gross vs net churn. Customer-success teams own it; growth and finance teams watch it closely.

Why it matters: Churn is the opposite of growth. A business adding 100 customers a month while losing 95 is barely growing. Companies with high churn must spend more on acquisition just to stand still, which is why investors scrutinize it as a signal of product-market fit.

Common mistakes: Treating all customers as equal when computing churn. Losing one large customer hurts revenue more than losing several small ones, which is why "net revenue churn" (weighted by spend) tells a different story than "logo churn" (counting customers).

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