What Is Churn Rate?
Churn rate (also called customer attrition rate) measures the percentage of customers who stop doing business with you during a given period. It is one of the most important metrics for subscription businesses, SaaS companies, and any organization that relies on recurring revenue. A low churn rate means customers are staying loyal; a high churn rate signals problems with product, pricing, or service.
How to Use This Calculator
Enter the number of customers you had at the start of the period (a month, quarter, or year) and the number of customers you lost during that same period. The calculator instantly returns your churn rate as a percentage, along with your retention rate and the number of customers retained.
The Formula Explained
The formula is simple:
$$\text{Churn Rate} = \frac{\text{Customers Lost}}{\text{Customers at Start}} \times 100\%$$
You divide the customers lost by the number you started with, then multiply by 100 to express it as a percentage. Retention rate is just 100 minus the churn rate. Be sure to count only customers present at the start of the period in the denominator — new customers acquired mid-period are typically excluded for a clean churn measure.
Worked Example
Suppose a SaaS company began the month with 500 customers and lost 25 of them by month end. The churn rate is $$(25 \div 500) \times 100 = 5\%.$$ That means the retention rate is 95%, and 475 customers were retained. Tracking this monthly helps you spot trends before they hurt revenue.
FAQ
What is a good churn rate? For SaaS, a monthly churn rate under 1-2% is considered healthy, though this varies by industry and customer segment.
Should I count new customers in the denominator? No. Use only the customers who existed at the start of the period for a standard churn calculation.
How do I lower churn? Improve onboarding, gather feedback, offer responsive support, and proactively engage at-risk customers before they leave.
