Churn Rate Calculator

The calculator divides the customers you lost by the customers you had at the start of the period:

• Churn rate: lost ÷ start × 100
• Retention rate: 100 − churn
• Implied average lifetime: 100 ÷ churn, in periods

With the defaults, 30 customers lost out of 1,000 gives 3.00% churn, 97.00% retention and an implied lifetime of 33.33. The lifetime line is labelled in months, but it is really in whatever period you measured. Enter a quarter's figures and the 33.33 means quarters.

The lifetime assumes the same churn rate every period, which is the same assumption the simple LTV formula makes. With zero customers lost it shows a dash, since no finite lifetime follows from zero churn.

Churn has no single standard definition, so state yours when you report it. The choices that change the number:

• Denominator. This tool uses customers at the start. Some teams use the average of the start and end counts. If you began a month with 1,000 customers, lost 30 and gained 80, you end with 1,050; the average is 1,025 and churn on that basis is 2.93% instead of 3.00%.
• Customers who join and leave in the same period. With the start-of-period method, they aren't in the denominator, so counting them as lost pushes churn up. Decide whether to include them and stay consistent.
• Customer churn vs revenue churn. Enter monthly recurring revenue instead of customer counts and you get gross revenue churn. $1,200 of MRR lost from $50,000 at the start is 2.40%.
• Net revenue churn. Subtract expansion revenue from existing customers before dividing. With $900 of upgrades, net churn is ($1,200 − $900) ÷ $50,000 = 0.6%. The tool can't do this subtraction for you, so enter the net loss as the lost figure.

Churn compounds, because each month's rate applies to the customers left after the month before. To convert a steady monthly rate to an annual one, use 1 − (1 − monthly)^12:

So the default 3% a month means losing about 31% of a starting group of customers over a year, not 36%. Going the other way, from an annual rate to a monthly one, use 1 − (1 − annual)^(1/12).

• Churn above 100% and negative retention. If you enter more lost customers than you started with, for example 120 out of 100, you get 120% churn and −20% retention. That usually means you counted customers who joined during the period as lost. Either add them to the start figure or leave them out.
• Zero at the start. The calculator treats the start count as at least one, so a brand-new business with no starting customers gets a meaningless figure. Measure churn from the first full period in which you had customers.
• Small numbers. With 40 customers, one cancellation is 2.5% churn. Look at several periods together before reading much into one.