Churn Rate Calculator
Calculate SaaS customer churn rate, revenue churn, retention rate, and 12-month projections.
Monthly Churn Rate
5.00%
Focus on retention strategies
At your current churn rate, you will lose approximately 46% of your customers annually.
12-Month Projection
SaaS Churn Benchmarks (Monthly)
Customer Churn = (Lost Customers / Starting Customers) x 100
Pro Tips:
- Focus on onboarding - most churn happens in the first 90 days
- Track cohort retention to identify patterns
- Consider negative churn through expansion revenue
- Survey churned customers to understand why they left
About This Calculator
The Churn Rate Calculator measures how fast your business is losing customers over any time period—one of the most critical metrics for SaaS companies, subscription businesses, and any recurring revenue model in 2026. With subscription economy revenue exceeding $300 billion globally and the average SaaS company spending $1.18 to acquire every $1 of new ARR, understanding and reducing churn has never been more important for sustainable growth. Enter your starting customers, lost customers, and time frame to calculate monthly churn rate, annual churn rate, retention rate, average customer lifetime, and customer lifetime value (CLV) instantly. This calculator transforms raw customer data into actionable insights that reveal the true health of your business. Whether you're a SaaS founder tracking monthly subscription cancellations, an e-commerce brand analyzing subscription box retention, or a mobile app measuring user attrition, mastering churn metrics is essential for achieving profitability and securing investment in today's competitive landscape.
How to Use the Churn Rate Calculator
- 1Enter the number of customers at the start of your measurement period.
- 2Input the number of customers lost (canceled, churned) during that period.
- 3Select your measurement time period (monthly, quarterly, or annual).
- 4View your calculated churn rate percentage instantly.
- 5Review your retention rate (inverse of churn rate).
- 6See the projected annual churn impact from your monthly rate.
- 7Calculate implied average customer lifetime in months.
- 8Enter average revenue per user (ARPU) to calculate Customer Lifetime Value (CLV).
- 9Compare your metrics against industry benchmarks provided.
- 10Analyze cohort data by running calculations for different customer segments.
Formula
Churn Rate = (Customers Lost / Customers at Start) × 100Churn rate measures the percentage of customers who stopped using your product or service during a specific time period. A 5% monthly churn means 5 out of every 100 customers leave each month. While simple to calculate, the compounding effect of churn over time makes even small improvements extremely valuable—reducing monthly churn from 5% to 4% can double customer lifetime.
The 5% Monthly Churn Trap: Math That Kills Startups
Counter-Intuitive Reality: 5% monthly churn sounds manageable—after all, you're keeping 95% of customers. But compounded over a year, you lose 46% of your customers.
The Compound Math: Annual Retention = (1 - Monthly Churn)^12 Annual Retention = (1 - 0.05)^12 = 0.54 = 54% retained Annual Churn = 1 - 0.54 = 46% lost
Monthly vs Annual Churn Conversion Table:
| Monthly Churn | Annual Retention | Annual Churn | Avg. Customer Lifetime |
|---|---|---|---|
| 1% | 88.6% | 11.4% | 100 months (8.3 years) |
| 2% | 78.5% | 21.5% | 50 months (4.2 years) |
| 3% | 69.4% | 30.6% | 33 months (2.8 years) |
| 4% | 61.3% | 38.7% | 25 months (2.1 years) |
| 5% | 54.0% | 46.0% | 20 months (1.7 years) |
| 7% | 41.5% | 58.5% | 14 months (1.2 years) |
| 10% | 28.2% | 71.8% | 10 months |
| 15% | 14.2% | 85.8% | 6.7 months |
The Startup Death Spiral: If it costs $500 to acquire a customer paying $50/month, you need 10 months just to break even (ignoring other costs). At 10% monthly churn, average customer lifetime is 10 months—zero profit margin. At 15% churn, you lose money on every customer.
Customer Lifetime Formula: Average Customer Lifetime = 1 / Monthly Churn Rate At 5% monthly churn: 1 / 0.05 = 20 months
Industry Benchmark Churn Rates (2026)
SaaS Churn Benchmarks by Segment:
| Business Type | Monthly Churn | Annual Churn | Key Drivers |
|---|---|---|---|
| Enterprise SaaS (B2B) | 0.5-1% | 5-10% | Multi-year contracts, high switching cost |
| Mid-Market SaaS | 1-2% | 10-20% | Annual contracts, moderate integration |
| SMB SaaS | 3-5% | 30-50% | Monthly billing, price-sensitive |
| B2C Subscription | 5-7% | 45-60% | Netflix/Spotify tier, content-driven |
| Consumer Apps | 5-10% | 50-70% | Mobile games, lifestyle apps |
| E-commerce Subscription | 6-10% | 55-70% | Subscription boxes, replenishment |
| Freemium (Paid Tier) | 3-8% | 30-60% | After free trial conversion |
Revenue vs Customer Churn Comparison:
| Metric Type | Enterprise | Mid-Market | SMB | B2C |
|---|---|---|---|---|
| Logo (Customer) Churn | 5-7% | 15-25% | 30-50% | 45-60% |
| Gross Revenue Churn | 3-5% | 10-18% | 25-40% | 40-55% |
| Net Revenue Retention | 110-130% | 100-115% | 90-105% | 85-100% |
What "Good" Looks Like in 2026:
- World-Class: <2% monthly / <20% annual
- Healthy: 3-5% monthly / 30-45% annual
- Concerning: 5-7% monthly / 45-60% annual
- Critical: >7% monthly / >60% annual
The Rule of 40 Connection: For SaaS companies, Growth Rate + Profit Margin should exceed 40%. High churn forces excessive spending on acquisition, destroying this equation and investor confidence.
Churn Rate Formulas and Calculations
Basic Churn Rate: Churn Rate = (Customers Lost ÷ Starting Customers) × 100
Example Calculation:
- Started with: 1,000 customers
- Lost: 50 customers
- Churn Rate: (50 ÷ 1,000) × 100 = 5%
Retention Rate (Inverse of Churn): Retention Rate = 100% - Churn Rate Retention Rate = 1 - Churn Rate (as decimal) 5% churn = 95% retention
Customer Lifetime Value (CLV): Simple CLV = ARPU ÷ Monthly Churn Rate
Example:
- ARPU: $100/month
- Monthly Churn: 5%
- CLV: $100 ÷ 0.05 = $2,000
Gross vs Net Revenue Churn:
| Type | Formula | What It Measures |
|---|---|---|
| Gross Revenue Churn | (Lost MRR + Downgrades) ÷ Starting MRR | Total revenue loss |
| Net Revenue Churn | (Lost MRR - Expansion MRR) ÷ Starting MRR | Net revenue impact |
Example:
- Starting MRR: $100,000
- Lost to cancellations: $5,000
- Lost to downgrades: $2,000
- Gained from upgrades: $4,000
Gross Revenue Churn: ($5,000 + $2,000) ÷ $100,000 = 7% Net Revenue Churn: ($7,000 - $4,000) ÷ $100,000 = 3%
Negative Net Churn: When expansion revenue exceeds losses, you achieve "negative churn"—the holy grail of SaaS. Your existing customer base generates more revenue over time even as some customers leave.
Customer Churn vs Revenue Churn
Why Both Metrics Matter:
Customer Churn (Logo Churn):
- Counts heads leaving regardless of value
- Treats all customers equally in the count
- Important for market share, network effects, reviews
- Leading indicator of product-market fit
Revenue Churn:
- Measures dollar impact of departures
- Weighted by customer value/spend
- Critical for financial health and forecasting
- More relevant for investor reporting
When They Diverge Significantly:
| Scenario | Customer Churn | Revenue Churn | Meaning |
|---|---|---|---|
| Small customers leaving | High | Low | Losing low-value accounts (may be OK) |
| Large customer leaves | Low | High | Lost whale—investigate immediately |
| Downgrades happening | Zero | Positive | Customers staying but paying less |
| Upsells working | N/A | Negative | Growth from existing base |
Real Company Example: SaaS company with 1,000 customers generating $100K MRR:
Scenario A:
- 100 small customers ($30/mo each) cancel: $3K MRR lost
- Customer churn: 10%
- Revenue churn: 3%
Scenario B:
- 2 enterprise customers ($10K/mo each) cancel: $20K MRR lost
- Customer churn: 0.2%
- Revenue churn: 20%
Which to Prioritize by Stage:
| Company Stage | Primary Focus | Why |
|---|---|---|
| Pre-Product Market Fit | Customer Churn | Need volume and feedback |
| Growth Stage | Both Equally | Balancing acquisition and retention |
| Mature Stage | Net Revenue Retention | Maximizing existing customer value |
Cohort Analysis: The Right Way to Measure Churn
Why Average Churn Rates Lie: Blending all customers together hides critical patterns. A reported 5% monthly churn might actually be:
- Month 1 cohort: 15% churn (poor onboarding)
- Month 2 cohort: 8% churn (value realization gap)
- Month 3+ cohorts: 3% churn (power users established)
Cohort Retention Table Example:
| Cohort | Month 0 | Month 1 | Month 2 | Month 3 | Month 6 | Month 12 |
|---|---|---|---|---|---|---|
| Jan '24 | 100% | 72% | 65% | 61% | 55% | 48% |
| Feb '24 | 100% | 75% | 68% | 64% | 58% | 51% |
| Mar '24 | 100% | 78% | 72% | 68% | 62% | - |
| Apr '24 | 100% | 82% | 77% | 72% | - | - |
| May '24 | 100% | 85% | 80% | - | - | - |
What This Reveals:
- Newer cohorts retain better = product/onboarding improvements working
- Biggest drop is Month 0→1 = onboarding problem to fix
- Churn stabilizes after Month 3 = power users established
- Improvement trend = team is learning and iterating
Key Cohort Metrics to Track:
| Metric | Time Frame | Good Benchmark | Great Benchmark |
|---|---|---|---|
| Day 1 Retention | Next day return | >50% | >70% |
| Week 1 Retention | 7-day return | >35% | >50% |
| Day 30 Retention | Habit formed | >25% | >40% |
| Day 90 Retention | Long-term user | >20% | >35% |
SaaS Monthly Cohort Benchmarks:
- Month 1: 70-85% (15-30% immediate churn is normal)
- Month 3: 55-70%
- Month 6: 45-60%
- Month 12: 35-50%
Causes of Churn and How to Diagnose
Top Churn Causes by Category:
1. Product Issues (35% of voluntary churn):
- Features don't solve user problems
- Too complex/poor UX
- Bugs and reliability issues
- Lack of expected features
- Performance problems
2. Onboarding Failures (25% of early churn):
- Users never reach "aha moment"
- Too long to first value
- Confusing setup process
- No guidance or support
- Wrong expectations set by marketing
3. Value Perception (20% of churn):
- Price doesn't match perceived value
- ROI not demonstrated
- Competitive alternatives appear better
- Needs changed, product didn't adapt
- Usage declined over time
4. External Factors (15% of churn):
- Customer went out of business
- Budget cuts/economic conditions
- Changed jobs/roles
- Seasonal business ended
- Life circumstances changed
5. Involuntary Churn (5-10% of total):
- Failed payment/expired card
- Account issues
- Compliance/policy violations
- Fraud prevention
Diagnostic Framework:
| Churn Timing | Likely Cause | Solution Focus |
|---|---|---|
| Day 1-7 | Wrong fit or failed onboarding | Qualify leads, improve onboarding |
| Week 2-4 | Didn't find value | Activation metrics, customer success |
| Month 2-3 | Value plateau | Expand use cases, add features |
| Month 6+ | Competition or budget | Loyalty programs, demonstrate ROI |
Key Question to Ask Churned Users: "On a scale of 1-10, how likely are you to return to [Product] if we solved [their stated reason]?"
- 8-10: Win-back campaign target
- 4-7: Fixable issues, prioritize feedback
- 1-3: Wrong fit, don't invest in recovery
Strategies to Reduce Churn
1. Fix Involuntary Churn First (Quick Wins): Failed payments cause 20-40% of all churn and are easiest to fix:
- Implement dunning email sequences (3-5 emails over 14 days)
- Use card updater services (recover 20-30% of failures)
- Retry failed payments at optimal times (Tuesday 10am, Monday 4pm)
- Offer payment method alternatives
- Pre-expiration card update reminders
2. Improve Onboarding (Highest Impact): The first 7 days determine long-term retention:
| Onboarding Element | Impact on Retention |
|---|---|
| Welcome email sequence | +15-25% |
| In-app guidance/tours | +20-30% |
| Success milestones | +25-35% |
| Human touch (call/email) | +30-50% |
| Quick wins within 5 minutes | +40-60% |
3. Implement Early Warning System: Monitor these leading indicators:
- Login frequency declining
- Feature adoption dropping
- Support tickets increasing
- NPS scores falling
- Usage depth decreasing
- Key actions not happening
4. Segment and Personalize:
| Segment | Risk Level | Intervention |
|---|---|---|
| Power users | Low | Advocate program, referral incentives |
| Regular users | Medium | Feature education, use case expansion |
| Declining usage | High | Proactive outreach, success call |
| At-risk (7+ days no login) | Critical | Win-back campaign, discount offer |
5. Build Switching Costs (Ethically):
- Data integration depth
- Workflow customization
- Team collaboration features
- Historical data value
- Training investment
Customer Lifetime Value (CLV) Deep Dive
Simple CLV Formula: CLV = ARPU / Monthly Churn Rate
More Accurate CLV Formula: CLV = (ARPU × Gross Margin) / Monthly Churn Rate
Example Calculation:
- ARPU: $100/month
- Gross Margin: 80%
- Monthly Churn: 5%
- CLV = ($100 × 0.80) / 0.05 = $1,600
CLV to CAC Ratio Benchmarks:
| Ratio | Interpretation | Action |
|---|---|---|
| < 1:1 | Losing money on every customer | Stop acquisition, fix retention |
| 1:1 - 2:1 | Barely profitable | Reduce CAC or improve retention |
| 3:1 | Healthy SaaS benchmark | Maintain and optimize |
| 5:1+ | Very efficient, can invest more | Scale acquisition spend |
CLV Impact of Churn Reduction:
| Monthly Churn | Avg. Lifetime | CLV at $50 ARPU | CLV at $100 ARPU |
|---|---|---|---|
| 10% | 10 months | $500 | $1,000 |
| 7% | 14 months | $714 | $1,429 |
| 5% | 20 months | $1,000 | $2,000 |
| 3% | 33 months | $1,667 | $3,333 |
| 2% | 50 months | $2,500 | $5,000 |
| 1% | 100 months | $5,000 | $10,000 |
The Power of 1% Improvement: Reducing churn from 5% to 4% increases CLV by 25% ($1,000 → $1,250) Reducing churn from 4% to 3% increases CLV by 33% ($1,250 → $1,667)
Marginal CLV improvement accelerates as churn decreases.
Net Revenue Retention: The Ultimate Metric
What is Net Revenue Retention (NRR)? NRR measures how much revenue you retain and expand from existing customers, excluding new customer acquisition.
Formula: NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR × 100%
Example:
- Starting MRR: $100,000
- Expansion (upsells): +$15,000
- Contraction (downgrades): -$3,000
- Churn (cancellations): -$7,000
- Ending MRR from cohort: $105,000
- NRR = $105,000 / $100,000 = 105%
NRR Benchmarks by Company Type:
| Company Type | Good | Great | Best-in-Class |
|---|---|---|---|
| B2B Enterprise | 100%+ | 115%+ | 130%+ |
| B2B Mid-Market | 95%+ | 105%+ | 115%+ |
| B2B SMB | 90%+ | 100%+ | 110%+ |
| B2C Subscription | 85%+ | 95%+ | 105%+ |
Why NRR > 100% is the Holy Grail:
- You can grow without new customers
- Existing customer base expands automatically
- Demonstrates strong product-market fit
- Highly valued by investors (2-3x revenue multiple impact)
Companies Famous for High NRR:
- Snowflake: 170%+ NRR
- Twilio: 150%+ NRR
- Datadog: 140%+ NRR
- Zoom: 130%+ NRR
- Slack: 125%+ NRR
How to Achieve High NRR:
- Usage-based pricing that grows with customer
- Clear upgrade paths (good-better-best tiers)
- Land and expand strategy (start small, grow account)
- Cross-sell complementary products
- Annual contracts with built-in increases
Pro Tips
- 💡Track cohort retention, not just average churn—averages hide where customers actually drop off and whether improvements are working.
- 💡Fix involuntary churn first (failed payments)—it represents 20-40% of total churn and is the easiest and cheapest to solve with dunning emails and card updaters.
- 💡The first 7-14 days determine long-term retention—invest heavily in onboarding to get users to their 'aha moment' as quickly as possible.
- 💡Monitor leading indicators (login frequency, feature adoption, support tickets) to predict and prevent churn before cancellation happens.
- 💡Segment churn by customer size, acquisition channel, and use case—aggregated averages hide the actionable insights in your data.
- 💡Calculate your break-even point: if CAC is $300 and ARPU is $50, you need 6+ months of retention just to recover acquisition cost.
- 💡Net Revenue Retention over 100% means you can grow without any new customers—this is the ultimate SaaS metric that investors value highly.
- 💡Survey churned customers within 24 hours of cancellation while the experience is fresh—response rates are 3x higher than delayed surveys.
- 💡Build an early warning system that flags at-risk customers based on declining engagement before they decide to cancel.
- 💡Implement a 'save' flow for customers attempting to cancel—offer downgrades, pauses, or incentives before letting them go.
- 💡Don't count customers gained and lost in the same period—this muddies your true retention picture.
- 💡Calculate CLV:CAC ratio monthly and set alerts if it drops below 3:1—this ratio determines long-term business viability.
Frequently Asked Questions
It depends heavily on your segment. Enterprise SaaS (B2B) should target under 1% monthly (10% annual) due to high contract values and switching costs. SMB SaaS typically sees 3-5% monthly (30-45% annual) because of price sensitivity and lower switching costs. B2C subscriptions average 5-7% monthly. Any SaaS above 7% monthly churn has a critical retention problem that will limit growth and make profitability nearly impossible.
