The Churn Rate Calculator measures how fast customers (and their revenue) are leaving over one period: enter starting customers, new customers, ending customers, and optionally the MRR figures, and it returns customer churn, retention, gross and net revenue churn, an annualized churn figure, and the implied average customer lifespan.
How It Works
Customers lost is not entered directly; it is derived as starting customers plus new customers minus ending customers, so your three counts must reconcile. Churn divides the lost customers by the starting base. Revenue churn applies the same logic to money: gross revenue churn is lost MRR over starting MRR, and net revenue churn subtracts expansion MRR from existing customers before dividing, which is why net churn can be negative for businesses whose existing customers grow faster than others leave.
Annualizing compounds the monthly rate over twelve months (1 - (1 - churn)^12), and average lifespan is the reciprocal of the monthly churn fraction.
Parameters
| Input | Required | Meaning | |---|---|---| | Customers at start | Yes | Base at period start | | New customers | Yes | Added during the period | | Customers at end | Yes | Base at period end | | Starting MRR | No | Enables revenue churn figures | | MRR lost | No | Revenue lost to churn and downgrades | | Expansion MRR | No | Revenue gained from existing customers |
Worked example
A business starts the month with 1,000 customers, adds 150, and ends with 1,080: it lost 70 customers, a 7% monthly churn and 93% retention. Annualized, 7% monthly compounds to about 58.1%, and the implied average customer lifespan is about 14.3 months. On the money side, starting MRR of 3,000 lost and $1,200 of expansion gives gross revenue churn of 6% and net revenue churn of (3,000 - 1,200) / 50,000 = 3.6%, so net revenue retention is 96.4%. The gap between 7% logo churn and 3.6% net revenue churn tells a story by itself: smaller customers are leaving, larger ones are expanding.
Benchmarks and how to use them
Consumer subscription products often live with 5 to 10% monthly churn; SMB SaaS targets roughly 3 to 5% monthly logo churn; mid-market and enterprise SaaS should be nearer 0.5 to 1.5% monthly, with net revenue churn at or below zero as the hallmark of a strong land-and-expand motion. Benchmarks are orientation, not absolution: a 4% churn in a business whose acquisition costs assume a 24-month lifespan is a crisis, and the lifespan figure this calculator returns is exactly the number to compare against your CAC payback period. If payback exceeds lifespan, growth spend loses money by construction.
The traps in churn measurement
Mid-period joiners distort simple rates: customers acquired late in the period had little time to churn, so fast-growing bases understate churn on this formula; cohort analysis (tracking each signup month's survival curve) is the corrective for important decisions. Definition drift is the second trap: paused accounts, failed payments recovered within a grace window, and seasonal businesses all need written rules applied identically every period, or the trend line measures your bookkeeping. Involuntary churn from failed payments deserves its own line, since it is fixable with dunning and card-updaters rather than product changes.
Limitations
The calculator applies period-level formulas to the aggregates you enter. It does not perform cohort or survival analysis, does not annualize revenue churn (only customer churn), and assumes the period is a month for the annualized and lifespan figures. Seasonal or annual-plan businesses should compute churn over matched periods and read annualized outputs with care.
Frequently Asked Questions
Can net revenue churn be negative?
Yes, and it is good news: when expansion from existing customers exceeds lost revenue, net churn is negative and net revenue retention exceeds 100%, meaning the base grows without any new sales.
Why does the calculator derive customers lost?
Because start plus new minus end is an accounting identity. Deriving it forces your counts to reconcile and exposes data errors, like counting reactivations as new customers, before they poison the rate.
Is monthly or annual churn the better headline?
Monthly for operating decisions, because it reacts fast; annual for investor conversations, computed by compounding rather than multiplying by twelve (multiplying overstates: 7% monthly is 84% naively but 58.1% compounded on a shrinking base).