Churn

Customers or revenue lost from the starting base over the period, over the starting base. Where there is no subscription, a customer is lost when silence exceeds a stated multiple of its own order cadence, and churned revenue is the run rate before the silence.

DefinitionCustomers or revenue lost from the starting base over the period, over the starting base. Where there is no subscription, a customer is lost when silence exceeds a stated multiple of its own order cadence, and churned revenue is the run rate before the silence.

Retention plus churn

On the same basis, they sum to 100 percent. Renewal rate does not, because its denominator is only what was due.

Reactivations go forward

A lost customer that returns is a reactivation in the period it returns. Last year's churn is not rewritten.

How it is computed

Customers, or recurring revenue, lost in the period divided by the customers or revenue at the start. Where there is no contract to cancel, lost is defined by a stated rule on silence.

Example

A base of 400 customers and $12.0 million at the start of the year lost 36 customers worth $0.6 million: 9 percent by count and 5 percent by revenue.

Where it goes wrong

Quoted by count only, or with new customers netted off. Churn is about what was lost from the starting base; growth is a separate line.

Articles that use this term

AI and self-service analytics

Account health score: why a computed score beats a colour-coded one

What is wrong with the red-amber-green account health field most CRMs carry, what a computed health score is made of, five inputs from the ledger and the CRM with stated weights, how the weights are set from the company's own churn history rather than opinion, why the score is shown with its inputs and never alone, the identity that every account has one score from the same rule, and how the score is validated against what happened.

16 Sept 20263 min read Forecast and pipeline

B2B churn without a subscription: measuring lost customers from the ledger

How a company that sells on orders rather than subscriptions measures churn from its ledger: the definition of a lost customer from its own order cadence, churned revenue as the run rate before the silence, the churn rate by segment and by rep, the identity that ties churned plus retained plus new to the two periods' revenue, and why a fixed 12-month rule counts the wrong customers as lost.

16 Sept 20262 min read Forecast and pipeline · Customer service

Contact volume per account against its own baseline: the surge list

How a customer service leader turns the ticket export into a weekly list of accounts whose contact volume has jumped against their own history, why the account's own baseline beats a global threshold, the surge score, and the two readings every surge has: a product problem or an account about to leave.

16 Sept 20262 min read Board and management reporting

Count-weighted and value-weighted: why every ratio on this site says which

The difference between a ratio weighted by count, accounts, deals, inquiries, and one weighted by value, revenue, notional, premium, why the two disagree whenever the large items behave differently from the small ones, the six measures where the difference is largest, hit ratio, coverage, win rate, share of wallet, renewal rate and retention, the rule that a report shows both and ranks by value, and the case where count is the honest one.

16 Sept 20263 min read Wallet share and penetration

Cross-sell and upsell: measuring each from the ledger so they stop being one number

The difference between cross-sell and upsell, how each is computed from the ledger, cross-sell as new product lines at an existing customer and upsell as more of a line already bought, the norm each is measured against, the two lists they produce, and why blending them into one expansion figure hides which of the two a team is good at.

16 Sept 20262 min read Board and management reporting

Customer lifetime value from the ledger: the honest version

How to compute customer lifetime value from data a B2B company actually holds: contribution per year per customer from the ledger and cost to serve, expected remaining life from the company's own churn by segment and tenure, and the two together, with the range rather than a point, the identity that ties it to the ledger, and the four assumptions that turn an honest figure into a marketing one.

16 Sept 20263 min read