Logo Churn vs Revenue Churn
Logo churn measures the percentage of customer accounts lost. Revenue churn measures the percentage of recurring revenue lost. They often diverge significantly — you can lose many small accounts (high logo churn) while retaining large ones (low revenue churn), or vice versa.
Why Logo Churn vs Revenue Churn Matters for SaaS Companies
Reporting only one type of churn hides half the story. High logo churn with low revenue churn means your small customers are not finding value — a product-market fit signal for that segment. Low logo churn with high revenue churn means your biggest accounts are leaving — a much more urgent problem. Investors and board members need both numbers to understand your retention reality.
An Operator's Take
I once worked with a founder who proudly reported 2% monthly revenue churn. Looked great on the surface. But logo churn was 8% monthly — they were hemorrhaging small accounts while their top 3 enterprise contracts kept the revenue number stable. The problem: those 3 enterprise contracts came up for renewal in the next quarter. When I pointed out that their entire revenue retention story depended on 3 accounts renewing, the conversation changed immediately. We shifted focus to fixing SMB retention while simultaneously building a renewal playbook for enterprise.
Common Mistakes
What I see go wrong at Seed to Series B companies.
Reporting only the more flattering churn number to your board. If logo churn is 8% but revenue churn is 2%, share both — they need the full picture.
Comparing your logo churn to industry benchmarks that report revenue churn. These are different numbers and the comparison is meaningless.
Assuming low revenue churn means retention is healthy. If it depends on a few large accounts, you have concentration risk, not good retention.
What to Do This Week
Concrete steps you can take right now.
Calculate both logo churn and revenue churn for the last 4 quarters. If they diverge significantly, investigate why.
If logo churn is high but revenue churn is low, analyze what is different about the small accounts that leave vs. the large ones that stay.
Check your revenue concentration: what percentage of MRR comes from your top 10 accounts? If it is over 30%, you have concentration risk.
Related Resources
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Frequently Asked Questions
Which is more important — logo churn or revenue churn?
Neither is more important in isolation. Revenue churn matters more for financial planning and investor conversations. Logo churn matters more for understanding product-market fit across segments. The relationship between them reveals your customer concentration risk. Track and report both.
How do you calculate logo churn rate?
Logo Churn Rate = (Number of customers lost in period / Number of customers at start of period) x 100. Count any account that fully cancels as a lost logo. Do not count downgrades — those affect revenue churn but not logo churn.
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