Master the essential revenue and financial metrics that drive B2B SaaS success. From ARR and MRR to retention metrics and customer economics, these terms are critical for understanding pipeline health, forecasting growth, and making data-driven decisions.

Logo Churn

Short Definition

Measures the percentage of customer accounts (“logos”) that cancel or fail to renew their subscription over a given period, regardless of how much revenue each one contributes. Also called customer churn.

Definition

Logo churn counts how many distinct customers leave, not how many dollars are lost. A $200/month customer and a $20,000/month customer are each one logo when they churn, which makes logo churn a strong signal of product‑market fit and customer satisfaction across the base.

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This metric is often used alongside revenue churn; logo churn tells you how broadly churn is happening, while revenue churn shows its financial impact. High logo churn, even with low revenue churn, can signal over‑reliance on a few large customers and weak fit in lower tiers.

How to Calculate

Logo churn is the number of customers lost in a period divided by the number of customers at the start of that period, expressed as a percentage.

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Logo Churn Rate = Number of Customers Lost During Period ÷ Number of Customers at Start of Period × 100%

Example

If you start the quarter with 200 customers and lose 10 (through cancellation or non‑renewal), your quarterly logo churn rate is 10 ÷ 200 = 5%.

Why Logo Churn Matters

Logo churn is a direct measure of how many relationships your business fails to retain, making it a core health indicator for SaaS revenue executives and investors. High logo churn means your team must constantly replace lost customers just to keep the base flat, which makes growth expensive and signals product, onboarding, or ICP issues.

Logo churn is the beating heart of LTV. For example, 3% monthly logo churn implies an average lifetime of about 33 months, while 5% monthly churn implies ~20 months. That’s a ~40% drop in lifetime value that cascades into weaker unit economics and lower LTV:CAC.

Industry Benchmarks

Benchmarks vary by segment and ACV, but typical ranges look like this:

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Segment	Typical Logo Churn (Annual)	Notes
SMB SaaS	15–30% (3–5% monthly common)	Higher due to business failures and budget volatility
Mid‑Market	~10–20%	Target closer to low teens or below
Enterprise	5–10% (often measured annually)	Best‑in‑class aim <5%

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Many operators use a rule of thumb: for sustainable SaaS growth, aim for <20% annual logo churn (<2% monthly).

Real-World Examples

A PLG SMB product runs at 5–6% monthly logo churn; analysis shows many very small customers churning. The company tightens ICP and raises minimum contract size to improve logo quality and reduce churn.
An enterprise platform shows low revenue churn but surprisingly high logo churn in its lowest-priced tier, signaling that the core product fits enterprise customers well but not SMB; leadership pivots focus up‑market.

Common Mistakes

Treating logo churn and revenue churn as interchangeable, which hides whether churn is concentrated in small or large accounts.
Using end‑of‑period customer count instead of beginning‑of‑period as the denominator, which skews the rate.
Ignoring involuntary churn (payment failures) and only tracking voluntary cancellations.
Reporting a single blended logo churn rate without segmenting by ICP, plan, or region, which conceals where problems really are.
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The Fix: Standardize the formula on “lost logos ÷ starting logos,” track voluntary vs. involuntary separately, segment by ICP/plan/segment, and review logo churn alongside revenue churn, NRR, and LTV. That way, Product, CS, and Sales can target the right problems.

Frequently Asked Questions

What is the difference between logo churn and revenue churn?

Logo churn counts how many customers you lose, while revenue churn measures how much recurring revenue those lost customers (and downgrades) represent.

Is high logo churn always bad?

High logo churn in very low-ACV segments may be tolerable if revenue churn stays low, but persistently high logo churn usually points to ICP, onboarding, or product fit issues.

How often should logo churn be measured?

Most SaaS companies monitor logo churn monthly and quarterly, then benchmark and report it on an annual basis for boards and investors.

Should free or trial users be included in logo churn?

Typically no. Most teams define logo churn on paying customers; free users are usually tracked with separate activation/retention metrics.

Can logo churn ever be “negative”?

No. Logo churn itself cannot be negative, but you can have low logo churn with strong expansion that yields negative net revenue churn.

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Last Updated: December 15, 2025
Reviewed by: Ben Hale

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