Dollar Churn
Dollar churn measures the revenue lost from customer cancellations and contractions over a period — weighted by dollar impact rather than customer count — the financially meaningful retention metric.
Why This Matters
Dollar churn calculation: revenue lost from churn and contraction / revenue at start of period. Provides financial impact view distinct from logo churn (count-based view). Healthy B2B SaaS dollar churn: under 10% annually for SMB-focused, under 7% mid-market, under 5% enterprise. Dollar churn input to GRR (1 - dollar churn = GRR for that period). Lower dollar churn enables better unit economics, customer lifetime value, and overall company economics.
Frequently Asked Questions
Frequently Asked Questions
Why is dollar churn more important than logo churn for revenue?
Direct financial impact. Losing one $100K customer impacts revenue 10x more than losing one $10K customer. Dollar churn captures this; logo churn doesn't. Revenue planning requires dollar-weighted view.
Can dollar churn and logo churn diverge?
Yes — losing many small customers produces high logo churn with manageable dollar churn. Losing few large customers produces low logo churn with catastrophic dollar churn. Customer concentration drives divergence.