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Churn Rate Calculator

Churn rate is the share of customers you lose in a period. Enter how many customers you had at the start and how many left to get churn and retention, what that rate compounds to over a year, and how long the average customer stays.

Quick examples

Do not net off new sign-ups — count only those who left.

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Churn rate5%
Retention rate
95%
Annualized churn
45.96%
Average customer lifetime
20 months

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      Formula

      Churn rate % = customers lost ÷ customers at start × 100
      Retention rate % = 100 − churn rate
      Annualized churn = 1 − (1 − monthly churn)¹²
      Average customer lifetime = 1 ÷ churn rate (in periods)

      How to use it

      1. Enter the number of customers at the start of the period.
      2. Enter how many of those customers left during it.
      3. Choose whether the period is a month, a quarter or a year.
      4. Read the churn rate and its annualized equivalent.

      Worked examples

      Losing 50 of 1,000 customers in a month

      Churn rate
      5%
      Retention rate
      95%
      Annualized churn
      45.96%
      Average customer lifetime
      20 months

      Losing 30 of 400 customers in a quarter

      Churn rate
      7.5%
      Retention rate
      92.5%
      Annualized churn
      26.79%
      Average customer lifetime
      40 months

      Monthly churn compounds

      A 5% monthly churn rate is not 60% a year. Each month you lose 5% of whoever is left, so after twelve months 0.95¹² = 54% remain and annual churn is 46%. Likewise 2% a month is 21.5% a year, and 10% a month is 71.8% a year.

      This is why small differences matter: cutting monthly churn from 5% to 3% raises the average customer lifetime from 20 months to 33.

      Counting it properly

      Count only customers who were there at the start of the period and left. Do not subtract new sign-ups from the losses, and do not include customers who joined and left within the period in the starting number.

      Customer churn counts heads; revenue churn counts the recurring revenue lost. If your biggest accounts leave, revenue churn can be much worse than customer churn, and upgrades from the customers who stay can make it negative.

      Questions people ask

      How do you calculate churn rate?

      Divide customers lost during the period by customers at the start. Losing 20 of 400 customers in a month is a 5% monthly churn rate.

      What is 5% monthly churn as an annual rate?

      About 46%. Retention is 95% a month, and 0.95 multiplied by itself twelve times is 0.54, so 54% of customers remain after a year.

      What is a good churn rate?

      It varies by business. Subscription software sold to large companies often sees under 1% a month; consumer subscriptions commonly run 3–7% a month. The trend in your own numbers matters more than any benchmark.

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