Glossary
Churn Rate
The percentage of customers (or revenue) lost over a period. Logo churn vs revenue churn measure different things. Monthly churn of 5% is generally considered high for SaaS.
By Amit Tyagi, Fitoor Capital · AletheiaAI Glossary
Definition
Churn Rate measures customer or revenue loss over a defined period. Two distinct measures: logo churn (% of customers who cancelled) and revenue churn (% of recurring revenue lost).
Formula: Logo Churn = Customers Lost in Period / Customers at Start of Period. Revenue Churn = Revenue Lost in Period / Revenue at Start of Period.
Annual benchmarks for Indian SaaS: under 5% annual logo churn is excellent; 5-10% is healthy; over 15% signals product/market problems. Monthly: under 1% monthly is excellent; over 3% monthly is concerning.
India Context
Indian SaaS churn data is harder to interpret than US SaaS because cohort sizes are smaller. Series A investors look at churn trends over time, not single-period numbers. Improving churn trend matters more than absolute level at early stage.
Example
A B2B SaaS starts the quarter with 100 customers paying ₹50L MRR. During the quarter: 4 customers cancelled (₹2L MRR lost). Logo churn = 4%; Revenue churn = 4%. If lost customers had above-average ARPU, revenue churn would be higher than logo churn (concerning); if below-average, lower (healthy).
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