Logo Churn vs Revenue Churn | Futureproof
Logo Churn vs Revenue Churn
Quick Definition
Logo churn counts customers lost; revenue churn counts dollars lost. They reveal different aspects of retention health.
What is Logo Churn vs Revenue Churn?
Logo churn counts customers lost regardless of size. Revenue churn counts dollars lost. They often tell different stories about business health.
If you lose 10 small customers paying $100/month and gain expansion from 5 large customers paying $1,000/month, logo churn looks bad but revenue churn might be excellent.
Why the Distinction Matters
Logo churn reveals customer satisfaction breadth. Revenue churn reveals financial impact. A company with high logo churn but low revenue churn is losing small customers while retaining large ones.
This pattern might be fine strategically if you're moving upmarket. It might be concerning if small customers are your future growth engine.
How to Calculate Both Step by Step
Step 1: Pull your customer list at the start and end of the month. Identify which customers left entirely (logo churn) and their associated MRR (revenue churn).
Step 2: Calculate logo churn.
- Customers at start of month: 380
- Customers who cancelled: 12
- Logo Churn = 12 ÷ 380 = 3.16%
Step 3: Calculate revenue churn using the same churned customers.
- Starting MRR: $152,000
- MRR from those 12 churned customers: $3,200
- Revenue Churn = $3,200 ÷ $152,000 = 2.11%
Step 4: Compare the two rates. The relationship reveals your churn pattern:
- Logo churn (3.16%) > Revenue churn (2.11%) → Small customers are leaving. Your larger, more valuable customers are sticky. This is often acceptable if you're moving upmarket.
- Revenue churn > Logo churn → Your biggest customers are leaving. This is a serious problem — investigate immediately.
- Both equal → Churn is evenly distributed across customer sizes.
Step 5: Calculate average churned customer value vs average customer value.
- Average churned customer MRR: $3,200 ÷ 12 = $267
- Average overall customer MRR: $152,000 ÷ 380 = $400
- Churned customers are 33% smaller than average — confirms small-customer churn
Common mistakes founders make:
- Only tracking one metric (you need the comparison to diagnose the pattern)
- Not segmenting by plan tier (logo churn on your $29 plan is a different issue than on your $500 plan)
- Ignoring the signal when revenue churn exceeds logo churn (your best customers are unhappy)
Which Metric to Prioritize
Revenue churn matters more for financial health. Logo churn matters more for understanding product-market fit across segments. Track both and understand the relationship between them.
Formula
- Logo Churn = Customers Lost ÷ Starting Customers × 100
- Revenue Churn = MRR Lost ÷ Starting MRR × 100
- Gross Revenue Churn excludes expansion. Net includes it.
Example
Monthly churn analysis:
- Starting customers: 100
- Customers churned: 5 (logo churn = 5%)
- Starting MRR: $100,000
- MRR from churned customers: $2,500
- Revenue churn: $2,500 ÷ $100,000 = 2.5%
5 small customers churned (5% logo) but only 2.5% of revenue. Your larger, more valuable customers are staying.