Churn Rate Calculator
Calculate monthly and annual churn rates, build cohort survival tables, and see how churn impacts growth. Works for customer churn and revenue churn. Correctly annualizes using compound decay, not simple multiplication.
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How to Use This Calculator
Tab "Monthly Churn"
Enter the number of customers at the start of the period and the number lost during the period. The calculator shows your monthly churn rate, annualized churn, average customer lifespan, and a SaaS benchmark rating. Switch to revenue churn mode to calculate MRR churn instead.
Tab "Annual & Cohort"
Enter your monthly churn rate (from Tab 1 or your own data) and a cohort starting size. The result shows the correctly annualized churn rate using compound decay (not monthly × 12), retention rate, and a cohort survival table showing how a group of customers decays over 36 months.
Tab "Churn vs Growth"
Enter your monthly churn rate and monthly acquisition rate. The calculator shows your net growth rate, the percentage of new customers that merely replace churned ones, and a cost insight about the hidden expense of high churn even when you are growing.
The Formulas
Monthly Churn = Customers Lost / Customers at Start × 100%
Revenue churn rate:
Revenue Churn = MRR Lost / MRR at Start × 100%
Annualized churn (compound decay):
Annual Churn = 1 − (1 − Monthly Rate)^12
This is NOT monthly × 12. Multiplying overstates churn.
Average customer lifespan:
Lifespan = 1 / Monthly Churn Rate (in months)
Cohort survival:
Surviving = Starting Size × (1 − Monthly Rate)^Months
Net growth rate:
Net Growth = Acquisition Rate − Churn Rate
All calculations are universal. SaaS benchmarks are industry averages and may not apply to every business model or market segment.
Worked Examples
Example 1 — 1,000 customers, 45 lost: 4.5% monthly churn
A SaaS company starts the month with 1,000 paying customers and loses 45 to cancellation.
Note the annualized rate is 42.7%, not 54% (4.5 × 12). Compound decay gives the true figure. The average customer stays for about 22 months.
Example 2 — Cohort decay: 1,000 customers at 4.5% monthly churn
Track a cohort of 1,000 customers acquired in January to see how many remain over time.
At 4.5% monthly churn, fewer than 1 in 5 customers from the original cohort remain after 3 years. This is why even "moderate" churn compounds into massive customer loss over time.
Example 3 — Churn vs growth: 5% churn, 8% acquisition
A company churns 5% of customers monthly but acquires 8% new customers relative to its base.
The company is growing at 3%/month, but 62.5% of acquisition effort simply replaces lost customers. With customer acquisition costing 5–7× more than retention, reducing churn from 5% to 3% would be more profitable than increasing acquisition from 8% to 10%.
Understanding Churn Rate
What Is Churn Rate?
Churn rate measures the percentage of customers (or revenue) lost over a given period. It is the inverse of retention: if you retain 95.5% of customers monthly, your churn rate is 4.5%. Churn is the single most important metric for subscription businesses because it directly determines customer lifetime value and long-term growth potential.
Customer Churn vs Revenue Churn
Customer churn counts the number of users who cancel. Revenue churn measures the dollar value of recurring revenue lost. Revenue churn can be higher or lower than customer churn depending on which customers leave. If your cheapest customers churn most, revenue churn will be lower than customer churn. If your biggest accounts leave, revenue churn will be higher.
Why Annualization Matters
A common mistake is multiplying monthly churn by 12 to get annual churn. This is wrong because churn compounds: each month you lose customers from an already-smaller base. The correct formula uses compound decay: Annual = 1 − (1 − Monthly)^12. At 4.5% monthly churn, the correct annual rate is 42.7%, not 54%.
The Hidden Cost of Churn
Even when a company is growing, high churn creates a "leaky bucket" problem. If you churn 5% monthly and acquire 8%, your net growth is 3%. But 62.5% of your acquisition spend merely replaces lost customers. Since acquiring a new customer costs 5–7× more than retaining one, reducing churn is almost always more cost-effective than increasing acquisition.
SaaS Churn Benchmarks
For SaaS businesses: <2% monthly is excellent and typical for enterprise products with long contracts. 2–5% is normal for SMB SaaS. 5–7% is high and signals product or market issues. >7% is critical and usually means a fundamental product-market fit problem. Consumer subscription services typically have higher churn than B2B SaaS.