Logo churn
Sector Deep DivesThe share of customers lost in a period, counted by customer rather than by revenue.
Also written: customer churn, logo retention, gross logo churn
Logo churn counts customers walking out of the door. Revenue churn counts the euros they took with them. The two answer different questions and a company will usually quote whichever is kinder.
The gap between them tells you about the shape of the customer base. Losing a fifth of customers and a fiftieth of revenue means the leavers are all small, which is what a deliberate move upmarket looks like and also what a product failing in the long tail looks like. Losing few customers and a lot of revenue means one large account left, which is a concentration problem rather than a product problem.
For a business selling to small companies, logo churn is the number that decides whether the model works, because acquisition cost is incurred per logo and has to be repaid per logo. For an enterprise business with a few hundred customers, revenue churn and net revenue retention matter more.
Ask for both alongside the concentration of the base. Net revenue retention on its own can look excellent while the long tail empties out underneath it, and that shows up in logo churn first.
Worked example
A company with 1,000 customers loses 200 of them in a year, so logo churn is 20%. Those 200 were the smallest accounts and represented 2% of revenue, so revenue churn is 2%.
Net revenue retention, after expansion in the remaining base, could still be well above 100%. The customer count is telling you something the revenue figure is hiding.