Formula
Logo retention = customers with MRR at start and at end
÷ customers with MRR at start
Logo churn for the period = 1 − logo retentionWorked example
Illustrative figures. One year. New customers change the closing count but not the rate.
| Line | Customers |
|---|---|
| Customers at start | 120 |
| Churned during the year | (9) |
| New during the year | 14 |
| Customers at end | 125 |
Logo retention = 111 ÷ 120 = 92.5%
Logo and revenue retention
Logo retention weights every customer equally. A company can retain 95% of its customers and lose a fifth of its revenue if the losses are its largest accounts, or the reverse. Report it with GRR.
Defining a customer
Count at the level the company contracts and reports: the contracting entity or the parent group. A change to the definition, such as rolling subsidiaries up to a parent, changes logo counts without any commercial event and should be disclosed.
Returning customers
Under a point-to-point measure, a customer who churned and returned within the period counts as retained. State whether such customers are included.
How Revnewed calculates it
Logo churn is calculated monthly as customers whose MRR fell to zero divided by customers with MRR at the opening.
Cohort tables switch between net revenue and logos, showing the share of each starting cohort still paying in every later month.
Common misstatements
- New customers in the numerator
- Comparing closing and opening counts measures growth, not retention.
- Monthly rates summed
- Twelve monthly churn rates do not add to an annual rate; retention compounds.
- Reported alone
- Logo retention says nothing about the revenue lost. Pair it with GRR.