Calculate customer and revenue churn. See the 12-month impact. Understand why small improvements matter so much.
Total paying customers at period start.
Customers who cancelled this period.
MRR at the beginning of the period.
MRR lost from cancellations this period.
Convert between monthly and annual churn using the compound formula.
Annual = 1 - (1 - Monthly)^12 5% monthly is not 60% annual. It is 46% because each month you lose 5% of what remains, not 5% of the original.
See how churn erodes your customer base and MRR over time.
How different monthly churn rates affect your business over time.
| Monthly | Annual | Avg Lifetime | Retained at 12mo | Status |
|---|
monthly churn
monthly churn
monthly churn
Churn rate measures how many customers or how much revenue you lose over a period. It is the opposite of retention. High churn means you are constantly refilling a leaky bucket.
Most SaaS companies track both customer churn (logo churn) and revenue churn. They tell different stories. A company losing many small customers but keeping large ones will have higher customer churn than revenue churn.
Lost Customers / Starting Customers Lost MRR / Starting MRR Example: 500 customers, 20 cancelled = 4% customer churn. $50K MRR, $2.5K lost = 5% revenue churn. The larger customers stayed.
Drop from 4% to 2% monthly churn and average customer lifetime goes from 25 to 50 months. Same acquisition cost, twice the revenue per customer.
5% monthly churn compounds to 46% annually. Almost half your customer base gone in a year. This is why monthly numbers that seem small add up fast.
Churn rate is the percentage of customers or revenue lost in a given period. If you start the month with 100 customers and lose 5, your monthly churn rate is 5%. It measures how well you retain what you already have.
Both tell different stories. Customer churn shows retention health. Revenue churn shows business impact. If your smaller customers churn more than larger ones, revenue churn will be lower than customer churn. Track both to get the full picture.
Do not just multiply by 12. The correct formula is: Annual Churn = 1 - (1 - Monthly Churn)^12. With 5% monthly churn, annual churn is 46%, not 60%. The formula accounts for compounding losses each month.
Depends on your market. Enterprise SaaS targets 1-2% monthly churn. Mid-market aims for 2-3%. SMB products typically see 3-5%. Anything above 5% monthly starts eating into growth potential significantly.
Gross churn counts all lost revenue from cancellations and downgrades. Net churn subtracts expansion revenue from existing customers. Net churn can be negative if expansions exceed cancellations. Negative net churn is the goal for high-growth SaaS.
Compounding. Drop from 5% to 4% monthly churn and your average customer lifetime goes from 20 to 25 months. That is 25% longer lifetime, which means 25% more revenue per customer acquired. Small improvements add up fast.
Start by understanding why customers leave. Exit surveys help. Common fixes include <a href='/blog/saas-customer-onboarding' class='text-accent hover:underline'>better onboarding</a> (reduces early churn), proactive support (catches at-risk accounts), feature adoption tracking (identifies disengaged users), and regular business reviews for enterprise accounts.
Monthly for operations. It is more actionable and shows trends faster. Annual for board reporting and benchmarking against industry standards. Both have their place. This calculator helps you convert between the two.
Calculators are useful. Dashboards that update automatically are better. See your actual churn rate, retention curves, and at-risk customers live.
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