Startups & SaaS
Churn Rate Calculator
Measure customer churn and estimate yearly retention.
Churn Rate Calculator
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How it works
Churn is the leak in the subscription bucket: the share of customers who cancel in a period. Losing 12 of 300 customers in a month is a 4% churn rate.
Churn is the quiet killer of growth. To grow, new customers must outpace the churn rate, and the retention estimate shows what a monthly churn rate implies over a year — 4% a month leaves only about 61% of customers after a year, which means you must acquire aggressively just to stand still.
Formula
Churn rate = Customers lost / Customers at start of period
Yearly retention ≈ (1 − monthly churn)12, assuming a steady rate.
Worked example
Example: 12 of 300 customers cancel this month. Churn = 12 / 300 = 4%. Over a year at the same rate, retention ≈ 0.96^12 = 61%, so about 39% of the base turns over every year.
WORKED EXAMPLE — DEFAULT INPUTS
What to know
Retention compounds just like interest, only in reverse. A monthly churn of 3% sounds small until you realize it halves the customer base every two years. Improving retention by a few points is often the cheapest growth available, because existing customers need no acquisition spend.
The highest-value churn work is identifying why customers leave and fixing the biggest cause: onboarding friction, a missing feature, or a price mismatch. Every month of retained customers adds recurring revenue that would otherwise need to be replaced from new acquisition.
Dollar churn and customer churn can diverge: losing a few high-value accounts hurts revenue more than losing many small ones. Track both, and weight the metric by the revenue at risk rather than headcount alone.
FAQ
What is a good churn rate?
For B2B SaaS, 1-3% monthly is healthy; consumer subscriptions often run 5-10%. The acceptable rate depends on how cheaply you can acquire new customers.
How does churn interact with growth?
Net growth = new customers minus churned customers. A 4% monthly churn needs a 4%+ monthly acquisition rate just to hold the base flat.
Should I count unpaid trials?
No. Measure churn on paying customers only; trial non-conversion is a separate metric (trial to paid rate).
How do I reduce churn?
Find why customers leave: onboarding gaps, missing features, price. Fix the biggest cluster first. Retaining a customer is far cheaper than acquiring a new one.