Churn Rate Calculator
Churn rate is the share of customers you lose over a period: customers lost divided by customers at the start. Its mirror is the retention rate. For subscription businesses the money version matters just as much: revenue churn measures lost recurring revenue, and net revenue churn subtracts expansion revenue, so it can go negative when upsells outweigh losses. The calculator below handles both customer and revenue churn, annualizes the rate by compounding (not by multiplying by 12, which understates it), and estimates average customer lifetime.
Churn Rate Calculator
The Formulas
Customer churn = customers lost / customers at start \u00d7 100. New customers are excluded from the denominator; only the starting base can churn. Retention = 100% \u2212 churn. Gross revenue churn = (churned MRR + contraction MRR) / starting MRR \u00d7 100. Net revenue churn subtracts expansion MRR as well, and can be negative.
Worked Example
Start with 500 customers, lose 25 in a month, add 40 new ones. Customer churn = 25 / 500 = 5.00%, retention 95.00%, net growth +3.00%. Annualized by compounding: 1 \u2212 0.9512 = 45.96%, not the 60% you get by multiplying 5% \u00d7 12. Average customer lifetime = 1 / 5% = 20 months. The compounding point matters: monthly churn compounds multiplicatively, and the naive linear annualization understates nothing here, it overstates (60% vs 46%), which misleads in the other direction.
Why Revenue Churn Can Disagree With Customer Churn
Losing many small accounts while keeping a few large ones gives high customer churn but low revenue churn. Conversely, losing one enterprise account can spike revenue churn while customer churn barely moves. Track both: customer churn diagnoses product-market fit, revenue churn diagnoses business health.
Negative Churn Is Real
When expansion revenue from existing customers exceeds what churned customers took away, net revenue churn goes negative. This is the hallmark of strong SaaS businesses: the installed base grows on its own even before new sales. The calculator reports it explicitly rather than flooring at zero.
Frequently Asked Questions
What is a good churn rate?
For subscription businesses, under 5% monthly is low, 5\u201310% moderate, above 10% high. Benchmarks differ by industry and contract length; annual contracts naturally show lower monthly churn than month-to-month plans.
Should new customers be in the churn denominator?
No. Customers acquired during the period were never at risk of churning during it. Including them understates churn. Report net growth separately.
How do I annualize monthly churn?
Compound it: 1 \u2212 (1 \u2212 monthly churn)12. Multiplying by 12 is a rough shortcut that overstates the true annualized figure.
What is the difference between gross and net revenue churn?
Gross revenue churn counts all lost and contracted MRR. Net revenue churn subtracts expansion MRR (upsells, upgrades), so it can be negative when existing accounts grow faster than others leave.
How is average customer lifetime estimated?
As 1 / churn rate per period. At 5% monthly churn, the average customer lasts about 20 months. It is a rough estimate that assumes a constant churn rate.