Churn Rate Calculator
Calculate customer churn rate, retention rate and average customer lifespan from your starting count and customers lost, with optional annualization from monthly data.
Updated 2026-06-14 · Free · No sign-up · Runs privately in your browser
Show the formula & steps
How the Churn Rate Calculator Works
Churn rate measures the percentage of customers who stop doing business with you during a period. This calculator takes your customers at the start of a period and the number lost, then returns your churn rate, the matching retention rate, and an estimated average customer lifespan. Choose monthly or quarterly to also see the figure annualized.
The Formula
Churn rate % = (customers lost ÷ customers at start) × 100 Retention rate % = 100 − churn rate
To annualize a monthly or quarterly rate, you compound the retention rather than multiplying:
Annual churn = 1 − (1 − period churn)^periods per year
Worked Example
Starting an annual period with 1,000 customers and losing 50:
- Churn rate = 50 ÷ 1,000 = 5%
- Retention rate = 100 − 5 = 95%
- Average lifespan ≈ 1 ÷ 0.05 = 20 years
If that same 5% were a monthly figure, annual churn would be 1 − 0.95¹² ≈ 46%, not 60% — which is why compounding matters.
Why Churn Matters
| Lever | Effect of lowering churn |
|---|---|
| Customer lifespan | Rises sharply as churn falls |
| Lifetime value (LTV) | Increases with longer lifespan |
| Growth | Net new customers compound faster |
| CAC payback | Easier to recover acquisition cost |
Small improvements in churn have an outsized impact: cutting monthly churn from 5% to 3% can nearly double the average customer lifespan, lifting lifetime value across your whole base.
Frequently asked questions
How do I calculate churn rate?+
Divide the number of customers you lost during a period by the number you had at the start of that period, then multiply by 100. If you began the month with 1,000 customers and lost 50, your monthly churn rate is 50 ÷ 1,000 = 5%.
What is the difference between churn rate and retention rate?+
They are two sides of the same coin and add up to 100%. Churn rate is the share of customers who leave during a period, while retention rate is the share who stay. A 5% churn rate means a 95% retention rate for that period.
What is a good churn rate?+
It varies by business model. Many SaaS companies aim for monthly churn below 1% to 2%, which is roughly 5% to 7% annually for consumer products and lower for enterprise. Compare against your own trend and your industry rather than a single universal number.
How do I turn monthly churn into annual churn?+
You cannot simply multiply by 12. Instead, compound the monthly retention: annual churn = 1 − (1 − monthly churn)^12. A 5% monthly churn gives 1 − 0.95^12 ≈ 46% annual churn, far higher than the naive 60% you would get by multiplying.
How is churn related to customer lifespan?+
Average customer lifespan is approximately 1 divided by the churn rate over the same period. An annual churn of 25% implies an average lifespan of about 1 ÷ 0.25 = 4 years, which is a key input when you calculate customer lifetime value.