Churn Rate Calculator
CheckedUse this churn rate calculator to get monthly churn, retention and average customer lifespan from the customers you started with and the ones you lost. Free, no sign-up, and the result updates as you type.
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Two mistakes wreck most churn numbers. The first is putting new signups in the denominator, which dilutes the rate and hides a retention problem behind a good growth month. The second is annualising by multiplying: 5% a month is not 60% a year, because each month churns what is left rather than the original base. This calculator uses the starting cohort as the denominator and compounds the annual figure properly, then turns the rate into the average lifespan that feeds your LTV.
How it's calculated
Churn rate = customers lost ÷ customers at start × 100 Average lifespan = 1 ÷ churn rate Annualised churn = 1 − (1 − churn)^periods
LaTeX source
\text{Churn} = \frac{L}{S} \times 100 \qquad \text{Lifespan} = \frac{1}{\text{Churn}} \qquad \text{Annual} = 1 - (1 - c)^{p} Worked examples
A subscription box losing 54 of 1,200 members in a month
4.50% monthly churn, 95.50% retention
54 ÷ 1,200 is 4.5%, so 1,146 members stay. At that rate the average member lasts about 22.2 months, which is what belongs in an LTV calculation. Compounded across twelve months the annual churn is 42.45%, not the 54% you get by multiplying.
The numbers used
- Customers at start of period
- 1200
- Customers lost in period
- 54
- Periods per year
- 12
5% monthly churn, the classic benchmark
5.00% monthly churn, 20 month lifespan
40 of 800 is exactly 5%, and 1 ÷ 0.05 gives a twenty-month average lifespan. Annualised, 5% a month compounds to 45.96% — nearly half the base gone in a year. This is why a rate that sounds small monthly is a serious problem over a year.
The numbers used
- Customers at start of period
- 800
- Customers lost in period
- 40
- Periods per year
- 12
Questions sellers ask
How do you calculate churn rate?
Divide the customers you lost during the period by the customers you had at the start of it, then multiply by 100. Losing 54 of 1,200 is 4.5%. Keep new signups out of the denominator — including them makes churn look lower purely because you grew, and it hides the deterioration when growth slows.
What does a 20% churn rate mean?
A fifth of your customers leave each period. If that is monthly, the average customer lasts just five months and the entire base turns over inside a year and a half. Annualised, 20% monthly churn means 93% of a cohort is gone after twelve months. At that rate acquisition spend almost never pays back, whatever the headline LTV says.
What does 5% churn mean?
Five customers in every hundred leave during the period, and ninety-five stay. Monthly, that gives a twenty-month average lifespan and 45.96% annual churn once compounded. It is often quoted as an acceptable figure for small consumer subscriptions, though anything selling to businesses would treat 5% a month as a serious retention problem.
What is 2% monthly churn annualized?
21.53%, not 24%. The calculation is 1 − (1 − 0.02)^12, because each month churns 2% of whoever is left rather than 2% of the original base. Multiplying by twelve always overstates the loss, and the error grows with the rate: at 10% monthly the multiplied answer of 120% is impossible, while the compounded answer is 71.8%.
How do you calculate retention rate?
Retention is 100 minus churn for the same period and cohort. Losing 4.5% of customers means retaining 95.5%. If you want a revenue figure instead, net revenue retention counts upgrades and downgrades from surviving customers too, which is why it can exceed 100% even while customer retention falls.
What's a good retention rate for a company?
For a monthly consumer subscription, 95% and up is solid; for annual business contracts, 90% a year is the usual floor. Compare against your own trend rather than an industry figure, because cohort quality moves with acquisition channel — a discount promotion will reliably drop the next cohort's retention by several points.
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