Churn Rate Calculator
See what share of your customers leave each month, quarter or year, how that adds up over a year, and what it means for your revenue and growth.
Paying customers on the first day of the period.
Of those, how many cancelled or stopped paying.
Paying customers on the last day.
Used for customers at the end and the forecast.
Most tools use the start. The average is fairer when you grow fast during the period.
Customer value
ARPU. Leave empty to skip lifetime value.
What's left after the cost of serving the customer. 100% shows revenue.
Revenue churn
MRR or ARR. Use the same period for all four boxes. Leave empty to skip.
Contraction: customers who moved to a cheaper plan.
Expansion: upgrades, add-ons and price rises for existing customers.
Forecast
Empty: new customers in the period, spread per month.
Shows the churn you need to get there.
Customer forecast
| Month | Lost | New | Customers |
|---|
How your churn rate is worked out
Churn rate = customers lost ÷ customers you started with.
- 1
Customers lost
50 of 1,000
- 2
Churn rate
50 ÷ 1,000= 5% a month
- 3
Retention rate
100% − 5%= 95% stay
- 4
Over a year
1 − 0.95^12= 45.96% a year
Read more: the formulas, worked example, monthly vs annual churn, revenue churn and NRR
Churn rate is the share of your customers who leave in a period. Retention rate is the share who stay. Together they tell you how leaky your business is: new customers only grow you if you win them faster than you lose the ones you have.
The formula
churn rate = customers lost ÷ customers at the start × 100
customers lost = customers at the start + new customers − customers at the end
retention rate = 100% − churn rate
annual churn = 1 − (1 − monthly churn)^12
monthly churn = 1 − (1 − annual churn)^(1/12)
average customer lifetime = 1 ÷ churn
lifetime value = revenue per customer a month × gross margin ÷ monthly churn
gross revenue churn = (lost from cancellations + downgrades) ÷ revenue at the start
net revenue retention = (revenue at the start − cancellations − downgrades + upgrades) ÷ revenue at the start
customers next month = customers × (1 − monthly churn) + new customers
customers level off at = new customers a month ÷ monthly churn
Worked example
You start the month with 1,000 customers and 50 cancel. Churn is 50 ÷ 1,000 = 5% a month, so retention is 100% − 5% = 95%. You also won 80 new customers, so you end the month with 1,000 − 50 + 80 = 1,030 customers, up 3%.
Over a year the losses compound: 0.95^12 = 0.5404, so annual churn is 1 − 0.5404 = 45.96%, not 5% × 12 = 60%. Over a quarter it is 1 − 0.95^3 = 1 − 0.857375 = 14.26%. The average customer stays 1 ÷ 0.05 = 20 months.
If each customer pays $50 a month at an 80% gross margin, they leave $50 × 80% = $40 a month, so lifetime value is $40 ÷ 0.05 = $800 ($1,000 of revenue).
Revenue: you start with $50,000 of monthly recurring revenue, lose $2,000 to cancellations and $500 to downgrades, and gain $1,500 from upgrades. Gross revenue churn is ($2,000 + $500) ÷ $50,000 = 5%. Net revenue retention is ($50,000 − $2,000 − $500 + $1,500) ÷ $50,000 = $49,000 ÷ $50,000 = 98%, so net revenue churn is 2%.
Forecast: starting from 1,030 customers and adding 80 a month at 5% churn, customers level off at 80 ÷ 0.05 = 1,600. After 12 months you have 1,600 − (1,600 − 1,030) × 0.95^12 = 1,600 − 570 × 0.5404 = 1,292, and after 24 months 1,600 − 570 × 0.2920 = 1,434. To reach 2,000 customers in 24 months you would need monthly churn of about 2.56% (26.77% a year). To level off at 2,000 in the long run, churn must fall to 80 ÷ 2,000 = 4% a month.
Monthly and annual churn side by side
| Monthly churn | Annual churn (compounded) | Monthly × 12 (wrong) | Average lifetime |
|---|---|---|---|
| 1% | 11.36% | 12% | 100 months |
| 2% | 21.53% | 24% | 50 months |
| 3% | 30.62% | 36% | 33.3 months |
| 5% | 45.96% | 60% | 20 months |
| 10% | 71.76% | 120% | 10 months |
Start or average customers?
The usual churn rate divides by the customers you had at the start. If you grow a lot during the period, some people divide by the average of the start and end counts instead. In the example that is 50 ÷ ((1,000 + 1,030) ÷ 2) = 50 ÷ 1,015 = 4.93%. Pick one way and stick to it so your numbers are comparable month to month.
Negative churn
When upgrades from existing customers are worth more than what you lose to cancellations and downgrades, net revenue retention is above 100% and net revenue churn is below zero. Your revenue from last period's customers grows even before you win anyone new.
Ways to cut churn
- Help new customers get value fast: onboarding, set-up help and early check-ins.
- Watch for warning signs, like falling usage or failed payments, and reach out before they cancel.
- Retry failed card payments and remind customers before cards expire.
- Offer a pause or a cheaper plan instead of only a cancel button, and ask why people leave.
- Annual plans lock in customers for longer.
These are averages. Real churn is rarely steady: new customers often leave faster than loyal ones, and seasons matter. The forecast assumes churn and new customers stay the same each month. Use your own numbers from recent months and recheck them as your business changes.
Common questions
How do you calculate churn rate?
Divide the customers you lost in a period by the customers you had at the start of it, then multiply by 100. If you start the month with 1,000 customers and 50 cancel, churn is 50 ÷ 1,000 = 5% for that month. Don’t count customers who joined during the month in the starting number.
What is the retention rate?
Retention is the opposite of churn: the share of customers you started with who are still with you at the end. Retention = 100% − churn, so 5% churn means 95% retention. Another way to get it is (customers at the end − new customers) ÷ customers at the start.
How do I turn monthly churn into annual churn?
Don’t multiply by 12. Each month you lose a share of the customers who are left, so the losses compound: annual churn = 1 − (1 − monthly churn)^12. 5% a month is 1 − 0.95^12 = 45.96% a year, not 60%. To go the other way, monthly churn = 1 − (1 − annual churn)^(1/12).
How long does the average customer stay?
On average, 1 ÷ churn periods. At 5% monthly churn the average customer stays 1 ÷ 0.05 = 20 months. At 25% a year they stay 4 years.
What is net revenue retention (NRR)?
NRR is the recurring revenue you keep from the customers you started with, after cancellations and downgrades, plus upgrades: (starting revenue − lost − downgrades + upgrades) ÷ starting revenue. Above 100% means upgrades more than make up for losses, which is called negative churn.
What is the difference between customer churn and revenue churn?
Customer churn counts people who leave. Revenue churn counts money: if your biggest customers leave, revenue churn is higher than customer churn; if small ones leave, it is lower. Gross revenue churn counts cancellations and downgrades; net revenue churn also takes off upgrades.
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