OneTaskBy Tim King · Updated
Churn Rate Calculator
Monthly to Annual Churn Conversion, Customer Retention and Average Customer Lifetime
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How the Churn Rate Calculator works
This churn rate calculator divides the customers you lost in a month by the number you started with. It converts that to an annual rate, shows retention and the average customer lifetime, and adds net growth and lifetime revenue per customer when you enter new sign-ups and monthly revenue.
Churn rate calculator formula
Monthly churn = customers lost ÷ customers at the start × 100 Annual churn = 1 − (1 − monthly churn)¹² Average lifetime = 1 ÷ monthly churn Lifetime revenue = monthly revenue per customer ÷ monthly churn
Annual churn is compounded, because each month's losses come from a smaller base. That is why 3% a month is 30.6% a year, not 36%.
Worked example: a growing subscription
A service starts the month with 1,000 customers and loses 30, a churn rate of 3.00% and retention of 97.00%. That compounds to 30.6% a year and an average lifetime of 33.3 months. With 60 new customers it ends on 1,030, net growth of 3.00%. At 49 a month, each customer is worth 1,633.33 over their lifetime.
Worked example: a small membership
A club starts with 250 members and loses 10, a churn rate of 4.00%. That is 38.7% a year and an average stay of 25.0 months, so at 30 a month each member brings in 750 over their lifetime.
Churn rate reference table
Monthly churn converted to yearly figures.
| Monthly churn | Annual churn | Average lifetime (months) | Left after a year |
|---|---|---|---|
| 0.5% | 5.8% | 200.0 | 94.2% |
| 1.0% | 11.4% | 100.0 | 88.6% |
| 1.5% | 16.6% | 66.7 | 83.4% |
| 2.0% | 21.5% | 50.0 | 78.5% |
| 2.5% | 26.2% | 40.0 | 73.8% |
| 3.0% | 30.6% | 33.3 | 69.4% |
| 3.5% | 34.8% | 28.6 | 65.2% |
| 4.0% | 38.7% | 25.0 | 61.3% |
| 4.5% | 42.5% | 22.2 | 57.5% |
| 5.0% | 46.0% | 20.0 | 54.0% |
| 5.5% | 49.3% | 18.2 | 50.7% |
| 6.0% | 52.4% | 16.7 | 47.6% |
| 6.5% | 55.4% | 15.4 | 44.6% |
| 7.0% | 58.1% | 14.3 | 41.9% |
| 7.5% | 60.8% | 13.3 | 39.2% |
| 8.0% | 63.2% | 12.5 | 36.8% |
| 8.5% | 65.6% | 11.8 | 34.4% |
| 9.0% | 67.8% | 11.1 | 32.2% |
| 9.5% | 69.8% | 10.5 | 30.2% |
| 10.0% | 71.8% | 10.0 | 28.2% |
Quick answers
- 2% monthly churn is about 21.5% a year.
- 5% monthly churn loses almost half your customers in a year.
- At 1% a month, the average customer stays 100 months.
- Retention is simply 100% minus churn.
- Halving churn doubles the average customer lifetime.
- Multiply your customer base by churn to see how many customers you must win just to stand still: 1,000 at 3% is 30 a month.
FAQ
What is a good churn rate?
For business software, monthly churn under 2% is often seen as healthy, and large enterprise contracts can run under 1%. Consumer subscriptions commonly churn 5% or more a month.
Should new customers be counted in the churn rate?
The standard formula uses only the customers you had at the start of the month, so new sign-ups do not dilute it. Customers who join and leave in the same month are best tracked separately.
What is the difference between customer churn and revenue churn?
Customer churn counts people. Revenue churn counts the recurring revenue lost, so losing one large account can mean low customer churn but high revenue churn. Upgrades can even make net revenue churn negative.
See also: all Profit & Growth tools, Rates & Pricing, Invoicing & Payments.
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