No. 4Retention & churn12 min read

Churn arithmetic, done honestly

25 May 2026

Before you can do anything about churn you have to be able to see it, and the default ways of counting it are quietly wrong in ways that flatter you. This is the arithmetic: logo versus revenue churn, why a monthly rate annualised is a lie, what net revenue retention actually tells you, and how to read a cohort chart without fooling yourself.

The short version

→Logo churn counts customers leaving. Revenue churn counts money leaving. They can point in opposite directions and both be true.
→Net revenue retention (NRR) nets expansion against churn. Above 100% means your existing customers grow faster than they leave — the single most important number in B2B SaaS.
→Monthly churn does not annualise by multiplying by twelve. 5% monthly is about 46% annual, not 60%, because you churn 5% of a shrinking base.
→A single blended churn rate hides everything. Split by plan, by cohort age and by acquisition source or the average will describe a customer you don't have.
→Involuntary churn — failed cards, expired cards, banks declining — is commonly cited at 20–40% of total churn. It is the cheapest churn to fix and the most often ignored.

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