Do you retain 95% of your customers month-to-month?
That'd be something to be proud of, until you do the math.
That's 5% churn per month, or 60% per year. In other words, you have to replace 60% of your revenue every year just to break even.
What if you have monthly 98% retention / 2% churn? That's still 25% a year, or a quarter of your revenue.
The best-run companies can see up to -2% churn per month (on a revenue basis). Yes, that's NEGATIVE 2% which means they make more money every month.
HOW?
Because the customers who stay with them buy & spend more over time than the company loses from other customers leaving.
"Customer Churn" (or "Logo Churn") of 15% or less per year (just over 1% per month.) This is based on the number of customers who leave.
"Revenue Churn" of 0% or less per year. The customers who stay buy enough new licenses or product to cover revenue losses from the customers who left.