Logo tracks the percentage of customers who remain active customers over time. Unlike dollar retention, logo retention only tracks the impact churn has on a business.

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There are three methods of calculating logo retention:

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No matter how you measure, it’s important to remember that logo retention solely tracks the percent of customers that remain active. That means that recurring revenue from the customer base may be growing nicely even with low logo retention if there is lots of expansion. Conversely, if there is little expansion and lots of contraction, existing customer revenue may be dwindling even if logo retention is relatively strong. However, holding onto customers is very important in the long run: acquiring customers is normally far more expensive than servicing them, and as a company matures and existing customers make up a larger percentage of the customer base, having low churn rates is vital to keeping the business on good footing.

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SMB customers (with lower SMBs) tend to have logo churn rates. Ideally, this is offset by also having lower CAC and high organic expansion potential.