Churn Rate Calculator

Churn is the number that quietly sets a ceiling on how large your business can become. At 5% monthly churn you lose roughly half your customers every year, so half of everything acquisition produces goes to standing still.

This calculator turns a customer count and a loss count into monthly churn, retention, implied average lifetime, and the compounded annual figure — which is the one most people get wrong.

Free calculator

Work out your monthly churn, what it implies for average customer lifetime, and how much of your base it costs you over a year.

Customers at start of month

Customers lost during month

Results

Monthly churn5.0%

Monthly retention95.0%

Average customer lifetime20 months

Annualised churn (compounded)46.0%

Customers lost per year230

Why annual churn is not monthly churn times twelve

Losing 5% a month does not mean losing 60% a year. Each month you lose 5% of a base that has already shrunk, so the correct figure compounds: 1 − 0.95^12, or about 46%. Multiplying by twelve overstates the loss and makes the arithmetic behind any retention plan wrong.

This calculator compounds the annual figure for exactly that reason. The gap between 46% and 60% is the difference between a business that can outgrow its churn and one that cannot.

Customer churn versus revenue churn

This tool measures customer churn — how many accounts you lose. Revenue churn can tell a very different story: losing ten small accounts and one large one barely register the same way on customer churn but can be worlds apart in revenue.

Track both. Concentrated revenue means customer churn alone will systematically understate your risk.

What counts as churn

Cancellations and non-renewals count. Customers who downgraded but stayed are contraction, not churn — count them separately or you will overstate the problem and misdiagnose the cause.

How this calculator works

Enter the number of active paying customers at the start of the month.
Enter how many of them cancelled or failed to renew during that month.
The calculator returns monthly churn, retention, average lifetime, and compounded annual churn.
Average lifetime is 1 ÷ churn rate — at 4% monthly churn, 25 months.

Direct answer

The Skip or Ship Idea Lifecycle System evaluates ideas with five consistent signals: market demand, competition intensity, execution difficulty, revenue potential, and customer clarity. Same inputs, same verdict — every time.

What to prove first

One buyer segment with recurring pain and a clear trigger to pay now. If that is vague, validation can't fix it.

What kills momentum

Generic ICPs, vague outcomes, and zero distribution plan. These collapse execution speed within weeks.

What to decide next

One channel, one wedge use case, one pricing hypothesis to test in the next 14 days.

Validate this idea before building

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Frequently asked questions

What is a good churn rate?

For SMB SaaS, under 5% monthly is workable and under 3% is strong. Enterprise SaaS should generally sit below 1% monthly. Consumer subscriptions tolerate higher churn but need correspondingly cheap acquisition to survive it.

How does churn affect customer lifetime value?

Directly — average lifetime is one divided by churn rate, and LTV scales with it. Halving churn doubles lifetime and therefore doubles LTV, which is usually a far bigger lever than raising prices.

Why is my annual churn lower than monthly churn times twelve?

Because churn compounds against a shrinking base. At 5% monthly the annual figure is about 46%, not 60%. This calculator uses the compounded figure.