Customer Churn Rate and Revenue Churn Rate

This article is a part of my Churn Combat Kit. Read the rest of the chapters here.

These two churn metrics are easy to find in your billing providers, such as Stripe.

• Customer Churn: answers how many?

• Revenue Churn: answers how much?

  
  

You want to know how many customers churn and how much revenue churn took place.

Say, you have 1000 customers. If 100 churned last month, your customer churn rate is 10%.

But if the 100 customers were worth $5000 and the remaining 900 customers were worth $95,000, then your revenue churn is $5000/$100,000 = 5%

	Customer	Revenue
Total	1,000	$100,000
Churned	100	$5,000
Remaining	900	$95,000
Rate	10.00%	5.00%

Revenue churn helps you measure the revenue impact of churn. Did small customers leave us? Or did large customers leave us?

In the above example, we can infer that more users are leaving but our enterprise audience base seems quite stable.

Now, look at your data and try to answer this question.

Which one's higher for you?

• Customer churn: we're losing more customers, but less $$
• Revenue churn: we're losing fewer customers, but more $$

In the following chapters, we'll learn to read cohort charts too. They're a bit more granular.

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