How do you calculate churn rate?

Customer Churn Rate = (Customers Lost / Customers at Start of Period) × 100. For example, if you start with 100 customers and lose 5, your monthly churn is 5%. Annual churn compounds: 5% monthly ≈ 46% annually.

What is a good churn rate for SaaS?

For SaaS, less than 5% monthly churn (about 46% annually) is acceptable for SMB. Enterprise SaaS should target under 1% monthly. Best-in-class SaaS companies achieve under 2% monthly churn with Net Revenue Retention above 120%.

What is the difference between customer churn and revenue churn?

Customer churn counts lost customers regardless of their value. Revenue churn (also called MRR churn) measures the actual revenue lost. If 10 low-paying customers leave vs 1 enterprise customer, customer churn differs greatly from revenue churn.

What is Net Revenue Retention (NRR)?

NRR measures revenue from existing customers after accounting for churn AND expansion. Formula: (Starting MRR - Churn + Expansion) / Starting MRR × 100. NRR above 100% means expansion exceeds churn — you grow even without new customers.

How does churn affect LTV?

Churn and LTV are inversely related. LTV = ARPU / Monthly Churn Rate. At 5% monthly churn, a $100/month customer has $2,000 LTV. At 2% churn, the same customer has $5,000 LTV. Reducing churn by 1% can dramatically increase customer value.

How can I reduce my churn rate?

Key strategies: (1) Improve onboarding to drive activation, (2) Monitor usage and intervene with at-risk customers, (3) Build stickier features, (4) Offer annual contracts with incentives, (5) Create a customer success program, (6) Gather and act on cancellation feedback.

Churn Rate Calculator

Calculate customer and revenue churn rates instantly. See Net Revenue Retention, annual churn, LTV impact, and get AI strategies to reduce churn.

Enter Your Values

Customers at Start of Period*

customers

Total paying customers at the beginning of the month/period

Customers Lost (Churned)*

customers

Number of customers who cancelled during the period

MRR at Start of Period

Monthly Recurring Revenue at start (for revenue churn)

MRR Lost to Churn

Revenue lost from cancellations (not downgrades)

Expansion MRR

Revenue gained from existing customers (upgrades, add-ons)

Average Revenue Per User

For calculating LTV impact

Formula

Churn Rate = (Customers Lost / Customers at Start) × 100

Churn rate measures the percentage of customers who leave. Net Revenue Retention accounts for expansion revenue from existing customers.

Monthly Customer Churn Rate5.0%

Good retention at 5.0%. Typical for healthy SaaS.

Customer Retention95.0%

Annual Churn Rate46.0%

Avg Customer Lifetime20.0 months

Gross Revenue Churn6.0%

Net Revenue Churn2.0%

Net Revenue Retention98.0%

Customer LTV$2,000

LTV Gain per -1% Churn$500

How Does Your Churn Compare?

Excellent<2% monthly — best-in-class retention

0% – 2%

Good2-5% monthly — healthy SaaS benchmark

2.01% – 5%

Concerning5-10% monthly — needs improvement

5.01% – 10%

Critical>10% monthly — retention emergency

> 10.01%

Source: Recurly & ProfitWell 2024

How to Calculate Churn Rate

Enter the number of customers at the start of the period
Enter how many customers cancelled/churned during the period
Optionally add MRR figures for revenue churn calculation
Add expansion MRR to calculate Net Revenue Retention
View customer churn, revenue churn, NRR, and annual projections
Chat with our AI SaaS Analyst for personalized retention strategies

SaaS Churn Rate Benchmarks

3-7% monthly

SMB SaaS Churn

1-3% monthly

Mid-Market Churn

<1% monthly

Enterprise Churn

>120%

Top Quartile NRR

100-110%

Median NRR