Most SaaS teams report a single churn number. This is a mistake that hides the actual story of what's happening in your customer base.
There are two fundamentally different churn metrics, and they require different responses:
Contract churn (or logo churn): the percentage of customer accounts that cancel in a period, regardless of their ACV. If you lose 10 accounts out of 100, your contract churn is 10%.
Revenue churn (or gross revenue churn): the percentage of MRR or ARR that cancels in a period. If those 10 lost accounts represented $10K of your $1M ARR, your revenue churn is 1%.
These can tell very different stories:
A company with 15% contract churn and 2% revenue churn has a small-account turnover problem. They're churning lots of small accounts while retaining most of their revenue. The fix is either improving onboarding and success for small accounts, or accepting this churn as a cost of their SMB go-to-market.
A company with 3% contract churn and 18% gross revenue churn has an enterprise account problem. They're not losing many accounts but the ones they lose are large. This is the scenario that keeps founders up at night — it looks fine on the surface until an enterprise non-renewal hits the ARR plan.
Net Revenue Retention (NRR) — which accounts for expansion and churn together — is the number that matters most for long-term business health. But to improve NRR, you need to understand whether your problem is contract churn, revenue churn, or expansion underperformance.
Track all three. Report all three. Intervene on the right one.