What is Churned Accounts?
The Churned Accounts metric, also known as Churned Logos, quantifies the number of current customers or clients that have disengaged with the company's products or services during a specified period. It provides insight into the total count of inactive customers, disregarding revenue amounts.
It is part of the active accounts waterfall, which can be broken down into its different components: start of period accounts, new accounts, and churned accounts.
Why is it important to measure Churned Accounts?
For businesses, especially in the SaaS industry, tracking Churned Accounts is essential for assessing customer retention and engagement. This metric typically encompasses a specific time frame, such as a month, quarter, or year, depending on the company's preference and business model. By monitoring the number of churned accounts over time, companies can gauge the success of their customer retention efforts and identify trends in customer activity.
Overall, measuring the Churned Accounts metric enables companies to make data-driven decisions regarding customer retention strategies, product improvements, and customer support to maintain a robust and engaged customer base.
How is Churned Accounts calculated?
The Churned Accounts metric is calculated by summing the number of accounts that were active in the preceding period but have no Annual Recurring Revenue (ARR) in the current period.
Churned Accounts = ∑ (Active accounts in the preceding period with no ARR in the current period)