Churn Rate Calculator

What Is Churn Rate

Churn rate measures how much you lose over a period. That loss can be customers (people or accounts that cancel) or revenue (recurring revenue that disappears due to cancellations and downgrades). Because churn is a percentage, it helps you compare performance across months even when your customer base changes. If you’re trying to understand whether growth is “healthy,” churn is one of the fastest ways to see if your business is retaining what it wins.

The phrase “churn” is often used casually, but in practice teams track multiple versions: customer churn, revenue churn, gross churn, net churn, retention rate, GRR, NRR, and cohort retention. Each one answers a slightly different question. This calculator keeps the definitions explicit so you can match the metric to the decision you’re making.

Customer Churn vs Revenue Churn

Customer churn tells you how many customers you lost. It is best for understanding product fit, onboarding quality, customer experience, and whether customers are sticking around. When customer churn rises, it usually points to issues like: misaligned acquisition, weak activation, low ongoing value, or avoidable churn from support and billing problems.

Revenue churn tells you how much recurring revenue you lost. It is often more important than customer churn for subscription businesses because a single high-value account can offset dozens of low-value accounts. Revenue churn also captures downgrades and seat reductions, which might not show up as customer churn even though they impact revenue.

Churn Basis: Start Customers vs Average Customers

The most common churn formula uses customers at the start of the period as the denominator: Churn % = Lost ÷ Start × 100. This is simple and widely used.

However, if your base changes rapidly due to strong growth, using only “start” can make churn appear higher than it feels operationally. In that case, some teams use average customers during the period: Lost ÷ Average, where average is typically (Start + End) ÷ 2. This tends to smooth churn when growth is uneven. The best choice is the one you can use consistently and compare over time without constantly redefining the metric.

Retention Rate and CRR

Retention is the flip side of churn. If you use start customers as the base, then retention is often reported as 100 − churn. But you may also see Customer Retention Rate (CRR), which uses start, end, and new customers: CRR = (End − New) ÷ Start × 100. CRR focuses specifically on how many starting customers were retained, excluding growth from new customers.

That distinction matters. A business can grow in net adds while still losing many existing customers. CRR helps you see whether the “bucket” is leaking even if the top-line count is rising.

Gross Revenue Churn, Net Revenue Churn, GRR, and NRR

Revenue churn can be measured in two common ways. Gross revenue churn looks only at losses: churned revenue plus contraction (downgrades). It answers: “How much recurring revenue did we lose from existing customers?”

Net revenue churn accounts for expansion revenue from retained customers. It answers: “After upgrades and seat growth, did retained customers offset the revenue we lost?” When expansion exceeds losses, net churn can be negative, which is why you’ll hear “net negative churn” as a goal for strong SaaS businesses.

The retention-style equivalents are GRR (Gross Revenue Retention) and NRR (Net Revenue Retention). GRR ignores expansion, while NRR includes it. GRR tells you whether your revenue base is stable; NRR tells you whether your best customers are growing with you.

Why Churn Compounds Faster Than You Expect

Churn is not just a monthly percentage on a chart. It compounds. If you lose 5% of customers each month and acquire no new customers, you do not lose “only 60%” after a year. You retain (1 − 0.05)¹² ≈ 54% of the base. That compounding effect is why small improvements in churn can create outsized long-term outcomes.

A helpful mental model is “half-life”: how many periods it takes to lose half of your customers at a given churn rate. When churn is low, half-life becomes long, giving you more time to earn back acquisition costs and build expansion revenue.

Using Churn to Estimate Customer Lifetime

If churn is stable, you can estimate expected customer lifetime in periods. A common approximation is: Lifetime ≈ 1 ÷ churn (with churn expressed as a decimal per period). For example, 5% monthly churn implies a rough lifetime of 1 ÷ 0.05 = 20 months. This is not a guarantee for any one customer, but it is a useful planning average when you’re evaluating CAC payback, pricing, and retention investments.

This calculator uses that approximation and also computes half-life, which is often easier to interpret in presentations: “At our current churn, we lose half of customers in about X periods.”

Churn Forecasting for Planning

Forecasting with churn is valuable when you want to plan headcount, revenue targets, onboarding capacity, or marketing spend guardrails. The forecast tab creates a period-by-period table from a start customer count and a churn rate. If you add new customers per period, the model shows the balance between retention and acquisition.

Forecasts are not predictions of fate. They are planning tools. If the forecast shows that retention dominates outcomes, that’s a sign to invest in activation, product value, customer success, and lifecycle messaging—because acquisition alone won’t fix the math.

What If My Churn Rate Changes Over Time

Many businesses experience churn that varies by cohort. New customers may churn faster, while older customers churn less. Pricing changes, onboarding improvements, or product releases can also change churn structurally. In that case, use this calculator to compute churn by period and compare trends, but also consider cohort retention analysis inside your analytics stack.

A practical approach is to run scenarios: “What if churn improves from 5% to 4%?” or “What if we reduce contraction by 30%?” Even small changes can meaningfully shift long-term retained base and revenue.

How to Reduce Churn in Real Life

Churn reduction is usually a combination of product, expectations, and customer experience. Some of the highest-leverage levers include:

• Improve activation: shorten time-to-value with onboarding and defaults that work.
• Fix mismatch: ensure your ads and sales promise matches what the product delivers.
• Strengthen habits: build workflows that make the product part of normal operations.
• Reduce friction: billing clarity, support speed, reliability, and fewer “paper cuts.”
• Expand within accounts: drive seat growth, add-ons, and upsells to improve NRR.

The most effective churn strategy is measurement plus iteration: track the right churn definitions, watch trends, and run retention experiments that map to churn drivers in your business.