How does revenue churn differ from customer churn?

Revenue churn and customer churn are different metrics that reflect business losses, but from different perspectives:

• Customer churn — this is the percentage or number of customers who stopped using a product or service over a certain period. For example, if you had 100 customers and 5 left, then customer churn = 5%.

• Revenue churn — this is the percentage or amount of lost revenue due to customer attrition or reduction in their payments. For example, if customers who contributed 10% of revenue left, then revenue churn = 10%.

The difference is that customer churn considers the number of customers, while revenue churn considers how much money is lost. If small customers leave, customer churn can be high, but revenue churn can be low. Conversely, losing one large customer can significantly impact revenue churn but hardly change customer churn.

It is important for a business to track both metrics to understand not only how many customers leave but also how it affects income.