Churn Rate Calculator
Customer and revenue churn, the retention that follows, and what the rate means over a year.
Churn is the share of customers or revenue lost in a period.
How the churn rate calculator works
Churn is the share of customers or revenue lost in a period. Customer churn counts heads; revenue churn weights by what each was paying, and the two can diverge sharply — losing many small accounts looks bad on customer churn and barely registers on revenue churn.
The compounding is what surprises people. 5% monthly churn is not 60% a year; it is 46% surviving, because each month's loss applies to a smaller base. Even 2% monthly leaves under 79% after a year.
Average customer lifetime is the reciprocal of the churn rate: 5% monthly means twenty months. That single figure drives lifetime value, which is why retention work compounds so heavily.
Formula: churn = lost / starting count; annual retention = (1 − churn)¹²
Worked examples
| Inputs | Customer churn | Note |
|---|---|---|
| 60 lost from 1,200 | 5% | 5% churn, NRR 102% |
| Low churn | 2% | 2% — 78.5% survive the year |
| Shrinking base | 10% | NRR under 90% |
FAQFrequently asked questions
How do I calculate churn rate?
Customers lost during the period divided by customers at the start.
Is 5% monthly churn the same as 60% a year?
No. It compounds: 0.95 to the twelfth is 54%, so about 46% are lost, not 60%.
What is net revenue retention?
Starting MRR minus churn and contraction plus expansion, divided by starting MRR. Above 100% means the existing base grows on its own.
Why do customer churn and revenue churn differ?
Because customers are not worth the same. Losing many small accounts hits customer churn hard and revenue churn lightly.
What is a good churn rate?
For business software, under 1% monthly is strong and 3–5% is common for small-business plans. Consumer subscriptions churn far faster.
Where these figures come from
- Reichheld (2003), Harvard Business Review — The One Number You Need to Grow — the paper that introduced Net Promoter Score
- Australian Securities and Investments Commission — the Australian corporate regulator
Last checked: September 2026. These are the industry-standard definitions; where companies commonly disagree, the page says so.