Gainsight Glossary

Calculating Churn Rate

To proactively measure and manage logo churn, businesses have each developed their own terminology, approaches, and measurements to calculating churn rate.

5 critical metrics for Calculating Churn Rate:

  • Customer Success Magic Number
    [ARR/MRR of customers renewed in period + ARR/MRR of up-sells in period] / [Total cost of Customer Success team + Customer Support team]
  • Customer Success Batting Average
    [# of customers renewed in period] / [# of customers eligible for renewal in period]
  • Customer Success Headwind
    [ARR/MRR* of churned customers and ARR/MRR decreases] / [Beginning of period ARR/MRR]
  • Customer Success Tailwind
    [ARR/MRR of up-sell and price increases] / [Beginning of period ARR/MRR]
  • Net Revenue Retention Calculation
    [Beginning of period ARR/MRR + ARR/MRR of up-sell and price increases – ARR/MRR of churn and price decreases] / [Beginning of period ARR/MRR]

Learn more about Calculating Churn Rate:

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