Customer churn is the percentage of the starting customer group lost during a defined period. Churn Rate = (Customers Lost from the Starting Group / Starting Customers) × 100. Retention for that same group and period is 100% minus churn. Compare matching definitions and periods. This calculator also models revenue losses and customer lifetime; use Retention Analytics for cohort tables.
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Example
You calculate monthly churn start 400 customers · lost 12
pmtk → Monthly churn = 3%
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Churn Rate Calculator
Measure customer cancellations and lost recurring revenue over a stated period.
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Paying customers at the beginning of the period.
Cancellations and non-renewals from the starting customer group.
Revenue churn (optional)
Upsells and price increases from the starting customer group. This NRR estimate assumes no downgrades.
Customer Churn Rate
—%
Enter customer counts, then click Calculate.
Why this matters
Compare customer churn with revenue churn to understand who left and how much revenue was lost. Review cohorts at matching ages. For NRR that includes downgrades as well as cancellations and expansion, use the MRR/ARR calculator.
ChurnRate = CustomersLost ÷ StartingCustomers × 100
Count cancellations AND non-renewals. Exclude new customers acquired during the period.
What's a good churn rate?
Depends on what you're building:
- B2B SaaS for small businesses: Compare similar contract sizes, billing periods, and customer groups.
- B2B Enterprise: Compare renewal opportunities and contract lengths; monthly rates alone can be misleading.
- B2C SaaS: Compare the same subscription category and billing period.
Bottom line: The calculator uses fixed model bands. They are prompts for investigation, not measured industry percentiles.
Understanding Churn Rate: The Foundation of SaaS Business Health
Churn rate measures the percentage of customers who cancel or stop using your product over a given time period. For the same customer group and period, churn complements retention (Retention = 100% - Churn) and the denominator in your Customer Lifetime Value calculation.
Customer growth depends on both acquisition and churn. A 5% monthly churn rate does not cap net growth at 5%; the number of new customers also matters.
The Two Types of Churn: Customer vs Revenue
Customer Churn(also called "logo churn") measures the percentage of customer accounts lost over time. It's calculated as: (Customers Lost ÷ Starting Customers) × 100. Customer churn gives you a volume-based view of retention health.
Revenue Churn measures the percentage of Monthly Recurring Revenue (MRR) lost from cancellations. The formula is: (MRR Lost ÷ Starting MRR) × 100. Revenue churn weights customers by revenue; customer churn shows how many accounts left. Both can be useful.
Critical insight: If revenue churn exceeds customer churn, such as 8% versus 5%, investigate revenue losses from larger accounts as well as downgrades. Compare the two metrics using the same period and definitions before drawing conclusions.
Comparing churn rates
Use the same period, customer group, and churn definition. These rates illustrate compounding; they are not universal targets or measured industry averages:
- 3.5% monthly churn compounds to about 35% annual churn.
- 6.5% monthly compounds to about 55% annually.
- 1% monthly compounds to about 11% annually.
- 3-7% monthly compounds to about 31-58% annually.
These annual projections assume the same monthly rate repeats for a starting cohort.
Net revenue retention
Net Revenue Retention (NRR) accounts for both churn and expansion revenue from existing customers. The formula is: NRR = [(Starting MRR - Churned MRR - Contraction MRR + Expansion MRR) ÷ Starting MRR] × 100.
When NRR exceeds 100%:When NRR exceeds 100%, you have "negative net churn." Your existing customer base grows revenue even without new customer acquisition. This means:
This calculator has no separate contraction input, so its NRR estimate assumes no downgrades. Use the MRR/ARR calculator when contraction needs to be included.
As historical examples, Snowflake reported 125% NRR in Q4 FY2026, and Datadog reported about 120% in Q4 FY2025. These company-defined annual retention measures are not monthly churn targets or proof of product-market fit.
Common churn calculation mistakes
Mistake #1: Multiplying monthly churn to estimate annual churn (5% × 12 = 60%). This dramatically underestimates retention. The correct formula is: Annual Churn = 1 - (1 - Monthly Churn)^12. Example: 5% monthly = 46% annual, not 60%.
Mistake #2: Using the wrong denominator. Always divide by customers at the START of the period, not the ending number. Starting with 1,000 customers, losing 50, and gaining 80 (ending at 1,030) means 5% churn (50÷1,000), NOT 4.9% (50÷1,030).
Mistake #3: Ignoring revenue churn. Track customer and revenue churn together. Customer counts alone can hide losses from larger accounts.
Mistake #4: Not accounting for expansion. Gross churn tells only half the story. With 10% gross revenue churn but 15% expansion, your NRR is 105%, which means negative net churn. Interpret it over the stated period and customer group.
Strategic Applications: From Metrics to Decisions
Acquisition must offset customer losses. With 5% monthly churn, acquiring 100 new customers monthly yields just 5% net growth (100 new minus 50 churned from 1,000 base = 50 net, or 5%). The net growth rate changes with acquisition volume and churn.
Churn determines LTV. The formula LTV = (ARPU × Gross Margin) ÷ Monthly Churn Rate shows that reducing churn from 5% to 3% increases modeled LTV by 67% if ARPU and gross margin stay unchanged.
Churn informs a product-market fit assessment. Review churn alongside other PMF evidence. If churn rises, investigate changes in product value, delivery, customer success, and the customers being acquired.
Segment your churn analysis. Break down churn by customer acquisition channel, plan tier, company size, and cohort to identify patterns. Check which groups account for losses before allocating retention work.
Next Steps: Connect Churn to Your Business Strategy
- Calculate churn rate using our free calculator with business-type-specific model bands
- Assess NRR by adding expansion revenue data to understand net customer value growth
- Import churn to LTV Calculator to see how retention improvements impact customer lifetime value
- Set retention targets based on your business model and maturity stage
- Identify churn drivers through exit surveys, usage analysis, and cohort segmentation
What is Customer Churn Rate?
Customer churn rate measures the percentage of customers who stop using your product during a given time period. For the same starting customer cohort and period, customer retention is 100% minus churn. This calculator uses customer churn rather than revenue churn.
Churn Rate Formula
Churn Rate = (Customers Lost / Customers at Start) × 100
SaaS billing cohort comparison
Median annual customer retention was 65% for monthly plans at $250–500 monthly ARPA in ChartMogul’s 2024 data. This is annual retention, not monthly churn.
ChartMogul 2025 report: sample and exclusionsRate this calculator:
Cancellation records show when a customer leaves. Usage changes, support activity, and adoption gaps may help identify earlier problems, but check those relationships in your own data before using them as churn signals.
Churn rate benchmarks by segment
| Segment | Churn rate |
|---|---|
| Illustrative churn scenario | 3.5% monthly (about 35% annual) |
| Illustrative lower-churn scenario | <2% monthly (<22% annual) |
| B2C SaaS | 5-8% monthly (illustrative range) |
| Enterprise B2B (>$100K ACV) | <1% monthly (<12% annual) |
| SMB B2B (<$10K ACV) | 3-7% monthly (31-58% annual) |
| Net Revenue Retention (Top Tier) | >120% NRR (illustrative annual target, not a monthly threshold) |
Common questions
What is a good churn rate for SaaS companies?
ChartMogul’s 2025 SaaS Billing Report found 65% median annual customer retention for monthly-plan customers at companies with $250–500 monthly ARPA in its 2024 data. This chart excludes companies under $300,000 ARR and those offering only one billing model. The figure is annual retention, not monthly churn. Compare the same customer population, period, and billing model.
How do you calculate customer churn rate?
Customer Churn Rate = (Customers Lost in Period ÷ Customers at Start of Period) × 100. For example, if you start the month with 1,000 customers and lose 25 customers, your monthly churn rate is (25 ÷ 1,000) × 100 = 2.5%. Exclude new customers acquired during the period to get an accurate measure of retention from your existing base. PM Toolkit's churn calculator handles both monthly and annual periods with NRR analysis.
What is the difference between customer churn and revenue churn?
Customer churn measures the share of customers lost; revenue churn measures the share of recurring revenue lost through cancellations and downgrades. Read them together because account sizes differ. For example, losing 10 small customers might represent 1% of revenue, while losing two enterprise customers could represent 15%.
How do I calculate Net Revenue Retention (NRR)?
NRR = [(Starting MRR + Expansion Revenue - Churned Revenue - Contraction Revenue) ÷ Starting MRR] × 100. Starting with $100K MRR, adding $15K expansion, losing $8K to churn and $2K to downgrades gives 105% NRR. Revenue from that starting customer base grew by 5% overall; expansion offset the revenue losses.
How does churn rate impact customer lifetime value (LTV)?
In the constant-churn model, expected lifespan in months is 1 divided by monthly customer churn. At 5% churn, that is 20 months. With revenue per customer and gross margin held fixed, reducing churn from 5% to 3% raises estimated LTV by about 67%. At $100 monthly revenue per customer, the revenue-based estimate rises from $2,000 to about $3,333 before gross-margin adjustment.
What causes high churn rates in SaaS?
Possible causes include difficulties getting started, missing product value, poor support, reliability problems, better alternatives, and failed payments. Check cancellation reasons, payment failures, and retention by customer age before deciding which cause explains your losses.