Gross Churn

Gross churn counts every dollar that leaves. No credit for upsells, no offsetting with expansion revenue. If a customer cancels, downgrades, or their payment fails, that lost revenue goes straight into your gross churn number. It's the unvarnished measure of how leaky your bucket is.

How to calculate gross churn

Gross churn rate = (Churned MRR + Contraction MRR) / Starting MRR x 100

Say you start the month with $100,000 in MRR. Cancellations cost you $3,000 and downgrades another $2,000. Your gross churn rate is 5%. It doesn't matter if your remaining customers upgraded by $4,000 in the same period. Gross churn ignores that entirely.

That's the point. Gross churn isolates the problem.

Why it matters

Gross churn is a product stickiness signal. If it's rising, customers are leaving or downgrading faster than before, and no amount of upselling will fix that long-term. A company with 6% gross churn and 1% net churn might look healthy on the surface, but that 6% means the foundation is eroding.

Here's the thing: gross churn can never be negative. It can only be zero (nothing lost) or positive. That makes it harder to game or hide behind expansion numbers. Tools like Stripe, Baremetrics, and ChurnWard all report gross churn alongside net figures so you can see both sides.

Reducing gross churn

A significant portion of gross churn comes from involuntary churn, which is failed payments rather than deliberate cancellations. Across most SaaS businesses, that's 20 to 40% of the total. Recovering those payments through dunning directly reduces gross churn without any product changes.

For the voluntary side, it's product work: improving onboarding, fixing the features that drive downgrades, and identifying at-risk accounts before they cancel. For a full comparison with net churn, see gross churn vs net churn.