Churn Rate

Churn rate is the percentage of customers (logo churn) or recurring revenue (revenue churn) a business loses in a given period, usually a month. It's the single biggest determinant of a subscription business's durability and therefore its multiple. For example, 5% monthly customer churn means the average customer stays 20 months; halving churn to 2.5% doubles that lifetime and materially raises the valuation. Buyers treat low, stable churn as a proxy for genuine product-market fit.