How do I calculate churn rate?

Monthly churn rate = customers lost during the month divided by customers at the start of the month, times 100. Annual churn can be calculated directly or annualized from monthly: 1 minus (1 minus monthly churn rate) to the power of 12.

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Churn Rate Calculator

Calculate your customer churn rate and see how it compares to SaaS industry benchmarks. Understand the impact of churn on your business growth.

Churn Rate Formula

Customers Lost÷Customers at Start× 100 =Churn Rate %

Your Monthly Numbers

Customers at Start of Period

Customers Lost During Period

Monthly Churn Rate

5.0%

Critical

Unsustainable churn rate. Focus on retention immediately.

Retention Rate

95.0%

Annualized Churn

46.0%

Customers Remaining

950

SaaS Churn Benchmarks (Annual)

< 5%

Enterprise SaaS — Long contracts, high switching costs

5-7%

Mid-market SaaS — Strong product-market fit, good onboarding

7-10%

Growth-stage SaaS — Typical for scaling companies

10-20%

SMB / Self-serve — Higher churn is normal for smaller customers

> 20%

Early-stage / Consumer — Focus on activation and engagement

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Churn Rate Deep Dive

Learn strategies to reduce churn, cohort analysis techniques, and early warning signals.

LTV Calculator

See how churn impacts Customer Lifetime Value with our LTV calculator.

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Understanding Churn Rate

Churn rate measures the percentage of customers who stop using your product over a given period. It's the inverse of retention and directly impacts customer lifetime value, MRR growth, and long-term viability. Even small improvements in churn have compounding effects on revenue. Read our churn rate metric guide for benchmarks and reduction strategies.

How the churn calculator works

It turns a starting customer count and customers lost into a period churn rate, then annualizes it so you can compare across cohorts and industries.

The formula: Churn Rate = Customers Lost / Customers at Start x 100. To annualize a monthly or quarterly rate, the calculator compounds it: Annual Churn = 1 - (1 - Period Churn)^(periods per year).

Worked example: Starting the month with 1,000 customers and losing 20 gives a monthly churn rate of 20 / 1,000 x 100 = 2%. Compounded over 12 months, 1 - (1 - 0.02)^12 ≈ 21.5% annual churn, which the calculator flags as High, above the Average band it uses for SaaS teams.

When to use it: See the churn rate glossary entry for voluntary vs. involuntary churn, or the LTV calculator to see how a lower churn rate compounds into higher lifetime value.

Related SaaS Metrics

Churn connects to every other SaaS metric. Lower churn increases LTV, improves your LTV:CAC ratio, and boosts your Quick Ratio. Track retention alongside NPS to see if satisfaction predicts churn. Use the Unit Economics Dashboard to see how churn impacts your entire business model.

FAQ

What is a good churn rate for SaaS?

For B2B SaaS, monthly churn under 2% is acceptable. Best-in-class achieves under 0.5% monthly. B2C runs higher at 3-8% monthly.

How do I reduce churn?

Start with exit surveys and cohort analysis to identify why users leave. Common levers: improve onboarding, add engagement triggers, fix the features Detractors complain about (check your NPS data), and proactively reach out to at-risk accounts.