Calculate your customer churn rate and retention rate for any time period.
Frequently Asked Questions
How do you calculate churn rate?
Churn rate = (Customers lost during period / Customers at the start of the period) x 100.
How do I convert monthly churn to annual churn?
Annual churn = 100 x (1 - (1 - monthly churn rate)^12), since customers who churn each month compound over the year rather than adding up linearly.
What is a good churn rate?
For subscription businesses, monthly churn under 3-5% is often considered healthy, though acceptable rates vary significantly by industry and customer segment.
How churn rate is calculated
Churn rate is customers lost during a period divided by customers at the start of that period, times 100. Because churn compounds, this calculator also projects annual churn from a monthly rate using 100 × (1 − (1 − monthly churn)^12), rather than simply multiplying by 12.
How to use this churn rate calculator
- Enter your customer count at the start of the period.
- Enter how many customers you lost.
- Click Calculate to see your churn rate, retention rate, and projected annual churn.
Monthly churn compounds faster than it looks
A 5% monthly churn rate sounds modest, but compounded over a year it works out to well over 40% annual churn, since each month’s churn applies to a shrinking base of remaining customers rather than adding up linearly. This is why even small improvements to monthly churn can meaningfully change your projected annual retention.
What drives churn
- Onboarding quality: Customers who don’t reach initial value quickly are far more likely to churn early.
- Pricing and perceived value: Churn often spikes at renewal if perceived value hasn’t kept pace with price.
- Customer support and product issues: Unresolved problems are one of the most preventable causes of churn.
Tips for reducing churn
Segment churn by customer cohort (signup month, plan type, acquisition channel) rather than looking only at a blended average, since a healthy overall rate can hide a specific segment churning heavily. Because retention compounds, investing in reducing churn often improves customer lifetime value more than an equivalent investment in new customer acquisition.
Expert insight: not all churn is created equal
Patrick Campbell, founder of ProfitWell and a widely cited voice on subscription business metrics, attributes 20-40% of all lost customers to involuntary churn — failed payments, expired cards — rather than customers actively choosing to leave, making it one of the most fixable causes of churn once you know to look for it. He also notes that businesses running annual contracts typically see meaningfully better retention than those on monthly billing, and cautions that heavy discounting tends to backfire, since customers acquired on a steep discount tend to churn at a higher rate than those who paid full price.
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Disclaimer: This calculator is provided for general informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. Results are estimates based on the values you enter and should not be relied upon as the sole basis for any financial or other decision. Past performance and projected figures are not a guarantee of future results. Always consult a qualified professional before making financial decisions. See our Legal Notice and Privacy Policy for more information.