Churn Rate Calculator
Measure how many customers (or how much recurring revenue) you lose over a period, then see what it costs you. Switch between customer and revenue churn, annualize the rate, and add your average revenue per customer to value the loss and the cash you would recover by cutting churn.
Formula
Worked example
Start with 500 customers and lose 25 in a month: churn = 25 ÷ 500 × 100 = 5%, retention 95%, 475 retained. Annualized that compounds to about 46%. Average lifetime is 1 ÷ 0.05 = 20 months. At 100 ARPU, you lose 2,500 per month (30,000 per year), and a 25% cut recovers about 7,500 a year.
How customer churn rate is calculated
Customer churn rate is the share of customers you had at the start of a period who left by the end of it. Divide the number of customers lost by the number you started with, then multiply by 100 to express it as a percentage. The denominator is intentionally the starting count, not the average or ending count, so the figure answers a clear question: of the customers I had, what fraction did I keep? Retention rate is simply the mirror image, 100 minus the churn rate, representing everyone who stayed.
Customer churn vs revenue churn
Counting logos lost is only half the picture. Switch this calculator to revenue mode to measure gross revenue churn instead, the share of recurring revenue (MRR) lost to cancellations and downgrades. Revenue churn matters because not every customer is worth the same: losing one large account can hurt more than losing several small ones, and a downgrade churns revenue without churning a logo. Many subscription businesses watch both. Customer churn flags whether people are leaving, while revenue churn shows the dollars at stake. Use the same lost-over-start formula either way; only the units change.
Annualizing churn and why it compounds
A churn rate that looks small in a single month is deceptive because it compounds. To annualize a periodic rate correctly you do not multiply by twelve; you compound the survival rate: annualized churn equals 1 minus (1 minus the periodic rate) raised to the power of twelve divided by the period length in months. A steady 5% monthly churn is not 60% a year, it is about 46%, because each month only the survivors can churn. The cohort survival chart shows this decay curve directly, and the average customer lifetime, 1 divided by the periodic churn rate, falls straight out of it.
Pricing the cost of churn and what you can recover
Turn on the cost estimate to put a currency figure on churn. In customer mode, enter your average revenue per customer per period (ARPU); the calculator multiplies it by the customers lost to value the per-period loss, annualizes it, and divides ARPU by the churn rate to estimate lifetime value per customer. In revenue mode the churned amount is already the revenue lost. Set a target churn reduction and the tool estimates the annual revenue you would recover by hitting it. These are planning figures: real recovery depends on which customers you save and whether expansion revenue offsets the losses, but they make the business case for retention concrete.
Typical monthly churn benchmarks
| Monthly churn rate | Interpretation |
|---|---|
| Under 5% | Low |
| 5% to 10% | Moderate |
| Over 10% | High |
General reference ranges for subscription businesses; healthy churn varies by industry and contract length.
Frequently asked questions
How do I calculate churn rate?
Divide the number of customers you lost during a period by the number of customers you had at the start of that period, then multiply by 100. For example, losing 25 of 500 customers gives 25 ÷ 500 × 100 = 5% churn. For revenue churn, use recurring revenue lost over recurring revenue at the start instead.
What is the difference between customer churn and revenue churn?
Customer churn counts how many customers left as a share of the starting count. Revenue churn measures how much recurring revenue you lost, so it also captures downgrades and weights large accounts more heavily than small ones. A business can have low customer churn but high revenue churn if its biggest customers are the ones leaving.
How do I annualize a monthly churn rate?
Do not just multiply by twelve. Compound the survival rate: annualized churn equals 1 minus (1 minus the monthly rate) to the twelfth power. A 5% monthly churn annualizes to about 46%, not 60%, because each month only the remaining customers can churn.
What is a good churn rate?
It depends on your industry and pricing, but for most subscription businesses a monthly customer churn under about 5% is considered healthy, 5 to 10% is moderate, and consistently above 10% usually signals a retention problem worth investigating.
How much revenue can I recover by reducing churn?
Enter your average revenue per customer (or use revenue mode) and a target churn reduction. The calculator values the revenue you lose each year to churn, then multiplies by your target reduction to estimate annual recoverable revenue. It is a planning figure: actual recovery depends on which customers you retain.