What Is Customer Churn Rate?
Customer churn rate is the percentage of customers a business loses over a defined period — a month, quarter, or year. It is one of the most important metrics for subscription businesses, SaaS companies, and any service with recurring revenue, because retaining existing customers is almost always cheaper than acquiring new ones. A rising churn rate is an early warning sign about product fit, pricing, or customer satisfaction.
How to Use This Calculator
Enter two numbers: the count of customers at the start of the period and the number of customers lost during that same period. The calculator instantly returns your churn rate as a percentage, along with the matching retention rate and the number of customers you kept.
The Formula Explained
The churn rate formula is simple:
$$\text{Churn \%} = \frac{\text{Customers Lost}}{\text{Customers at Start}} \times 100$$
Dividing losses by the starting base normalizes the figure so businesses of different sizes can be compared fairly. The retention rate is just 100 − Churn %, representing the share of customers who stayed.
Worked Example
Suppose a SaaS company begins the month with 500 customers and loses 25 of them. Churn $$= (25 \div 500) \times 100 = 5\%$$. That means the retention rate is 95% and 475 customers remained. For most subscription businesses, a monthly churn of 5% is considered high; healthy SaaS churn is often in the 1–3% range monthly.
FAQ
What is a good churn rate? It varies by industry, but lower is better. SaaS firms often target under 2% monthly; consumer subscriptions may tolerate higher figures.
Should I count new customers? This calculator uses the standard formula based on the starting cohort, so new customers acquired during the period are not included in the base.
How is churn different from retention? They are two sides of the same coin: retention rate = 100% − churn rate. If you keep 95% of customers, you churned 5%.
