Churn Rate Calculator
How many customers you lose each period, what that is a year, and how long they stay.
The same churn per month, quarter and year
Compounded: a customer who stays has to stay every month of the year, so a year’s retention is the monthly retention to the 12th power.
Revenue churn
What is left of 100 new customers
How this was calculated
Source: David Skok, SaaS Metrics 2.0 – Detailed Definitions (customer churn, MRR churn, customer lifetime).
About the Churn Rate Calculator
The churn rate is the share of your customers who leave in a period. Enter the customers you had at the start of a month (or a quarter or a year), the new ones you won and the ones you lost, and the calculator gives the churn and retention rate — divided by the customers at the start, the usual SaaS definition, or by the average of the start and the end when the customer base grew or shrank a lot.
It converts the rate between months, quarters and years the right way, compounded — 3% a month is 30.6% a year, not 36% — and shows the average customer lifetime it implies, how long it takes to lose half a cohort, and what is left of 100 new customers after three years. Add your recurring revenue for the gross and net revenue churn, GRR and NRR.
How to use it
- Choose the period your figures are for: a month, a quarter or a year.
- Enter the customers at the start, the new customers won in the period and the customers lost (cancelled or not renewed — new customers who left in the same period count too).
- Choose what to divide by: the customers at the start (the usual definition) or the average of the start and the end.
- Optionally open Revenue churn and enter the recurring revenue at the start, what was lost to cancellations and downgrades and what was gained from upgrades.
- Read the churn, its monthly, quarterly and yearly equivalents and the lifetime; use Convert a churn rate for any other rate.
Examples
Churn = 50 ÷ 1,000 = 5% (on the average base 50 ÷ 1,050 = 4.76%) A year: 1 − 0.95^12 = 45.96%, not 12 × 5% = 60% Average lifetime 1 ÷ 5% = 20 months · half a cohort gone after 13.5 months
Gross revenue churn (2,000 + 500) ÷ 50,000 = 5% Net revenue churn (2,500 − 3,000) ÷ 50,000 = −1% → NRR 101%: net negative churn
5.88% a quarter · 21.53% a year · average lifetime 50 months
Common uses
- Report monthly churn and retention, and their annual equivalents, to a board.
- Turn an annual churn from a contract renewal report into the monthly rate an LTV model needs.
- Check whether expansion revenue outweighs cancellations (net negative churn).
- Compare churn across months that had very different numbers of new customers, on the average base.
Which churn rate?
- Customer churn (logo churn) = customers lost ÷ customers at the start of the period. David Skok writes it as the customers who churned ÷ the total number of customers; the total at the start of the month is the usual reading, as his MRR churn divides by the previous month’s MRR.
- Average-base churn divides by the average of the customers at the start and at the end. It gives a steadier figure when the period started with few customers or many joined during it; the period-start rate can even pass 100% when new customers leave in the same period.
- Gross revenue churn = (MRR lost to cancellations + MRR lost to downgrades) ÷ MRR at the start. It shows whether you lose your biggest customers or your smallest. (Skok’s % MRR churn divides the churned MRR by the previous month’s MRR; downgrades are counted with it here.)
- Net revenue churn also subtracts the expansion from customers you kept. Below zero it is net negative churn: the customers you already have grow your revenue on their own. NRR = 1 − net revenue churn.
Source: David Skok, SaaS Metrics 2.0 – Detailed Definitions.
Monthly to annual churn: compound it
A customer counted as kept at the end of a year had to stay through every month of it, so the yearly retention is the monthly retention to the 12th power:
annual churn = 1 − (1 − monthly churn)^12 and monthly churn = 1 − (1 − annual churn)^(1/12)
3% a month is 1 − 0.97^12 = 30.6% a year; 12 × 3% = 36% overstates it, and the gap grows as churn rises (5% a month: 46% a year, not 60%). The same goes for quarters: four of them make a year.
Average customer lifetime
With a steady churn rate c per period the average customer stays 1 ÷ c periods: 3% a month → 33 months, 20% a year → 5 years (Skok’s examples). It is an average: half of a cohort is gone much sooner, after ln 0.5 ÷ ln(1 − c) periods (23 months at 3%). Use the lifetime for a quick LTV — revenue × gross margin × lifetime — or the customer lifetime value calculator, which also takes your own cohort curve.
1 ÷ c counts whole periods. From a yearly rate, a customer who leaves during a year counts for all of it — right for annual contracts — so the lifetime is longer than 1 ÷ the monthly equivalent: 20% a year gives 5 years (60 months), its monthly equivalent of 1.84% gives 54.3 months. The calculator shows both.
Limitations
- One period at a time. For a year of monthly MRR movements, NRR and GRR month by month, use the SaaS metrics calculator.
- Conversions and lifetimes assume the rate stays the same. Churn is usually higher in a customer’s first months and lower later.
- Customer churn counts every customer the same; revenue churn weights them by what they pay. Look at both.
- Reactivated customers (who come back after cancelling) are best counted as new customers, not as negative churn.
Privacy
Everything is worked out in your browser. The customer and revenue figures you enter are never uploaded.
Frequently asked questions
How do you calculate churn rate?
Divide the customers you lost in a period by the customers you had at its start: 50 lost of 1,000 = 5% a month. Retention is 100% minus churn. If many customers joined during the period, divide by the average of the start and the end instead.
How do I convert monthly churn to annual churn?
Compound it: 1 − (1 − monthly)^12. 2% a month is 21.5% a year and 5% a month is 46% a year. Multiplying by 12 overstates it. The other way: 1 − (1 − annual)^(1/12), so 20% a year is 1.84% a month.
What is the difference between customer churn and revenue churn?
Customer churn counts customers; revenue churn counts the recurring revenue they took with them, including downgrades. Losing ten small customers and one large one can give a low customer churn and a high revenue churn — or the other way round.
What is net negative churn?
Net revenue churn below zero: upgrades and expansion from the customers you kept are more than the revenue lost to cancellations and downgrades, so NRR is above 100%. Skok calls getting there “a great goal for a SaaS company.”
How long does a customer stay at my churn rate?
On average 1 ÷ churn periods: 1 ÷ 5% = 20 months. Half of a cohort is gone sooner, after ln 0.5 ÷ ln(0.95) = 13.5 months, because a few long-staying customers raise the average.