Customer Churn Rate ~ (aka "attrition rate"; monthly form "monthly churn")
How fast customers (or their revenue) leave, per period.
The fork, why two teams get different numbers
Beyond the count-vs-revenue split, the sharp fork is annualization. To turn a
monthly churn rate into an annual one, one camp multiplies by 12 (simple,
overstates), another compounds as 1 - (1 - monthly)^12 (survival, correct for
a decaying base). At 3% monthly the first gives 36%, the second gives 30.6%, a 5-point gap on the same data. A third fork is the denominator: start-of-
period customers vs the average of start and end vs a base that removes
customers who both joined and left inside the window.
The trap
Mixing annualization methods across a deck is the classic silent error: a cohort slide built with 1 - (1 - m)^12 sitting next to a board number built with m x 12 makes churn look like it improved when only the arithmetic changed.
- The full trap, worked on a real export
- Every formula variant, spelled out
- The reconciliation anchor, what to tie it to and when to refuse
Reference: SaaS / RevOps convention - no single standards body