Churn Rate Calculator
Measure customer losses relative to the customer base at the start of a period.
- Customer retention
- 95%
- Estimated MRR at risk
- $1,000
What is churn rate?
Churn rate is the percentage of customers who cancel or stop buying during a period. Divide customers lost from the starting group by customers at the start: losing 50 of 1,000 customers in a month is a 5% monthly churn rate, which leaves 95% retained.
Customers lost ÷ Customers at start × 1001 − (1 − Monthly churn)^121 ÷ Monthly churn (months)Example: a subscription box
- 1,000 subscribers on March 1; 50 of them cancel during March: 5% churn
- At $20 a month each, about $1,000 of monthly revenue is lost
- Kept up for a year: 1 − 0.95^12 ≈ 46% of the starting customers would be gone
- Average customer lifetime: 1 ÷ 0.05 = 20 months
Monthly churn compounds. 5% a month is not 60% a year; it is about 46%, because each month’s 5% applies to a smaller group.
Common mistakes
- Counting new customers who also left. Measure churn on the starting cohort, or the rate mixes acquisition with retention.
- Multiplying monthly churn by 12. Use the compounding formula above.
- Ignoring revenue churn. Losing a few large accounts can hurt more than many small ones. Track revenue churn alongside customer churn.
Churn Rate FAQ
What is a good churn rate?
Lower is better, and acceptable levels depend on price point and customer type: consumer subscriptions usually churn faster than annual business contracts. Track your own trend by cohort.
Can I compare monthly and annual churn directly?
No. Convert first: annual churn = 1 − (1 − monthly churn)^12.
What is the difference between churn and retention?
They are two sides of the same number for one cohort: retention = 100% − churn.