Churn

The churn rate refers to the proportion of customers or revenue that a company loses in a given period. A distinction is commonly drawn between customer churn (customer attrition) and revenue churn (loss of revenue).

In the SaaS context, a low churn rate is regarded as an indicator of good product-market fit and strong customer loyalty. It is therefore a central driver of a valuation. In combination with net revenue retention, it provides a more precise picture of the dynamics within the existing customer base.