Churn rate calculator

What it does

This churn rate calculator measures how many customers and how much recurring revenue you lost over a period. Enter customers at the start, new customers and customers lost, then the monthly recurring revenue (MRR) those starting customers paid, plus expansion, contraction and churned revenue. The page returns customer churn and retention, the monthly and annualised equivalents, average customer lifetime, gross revenue churn, gross revenue retention and net revenue retention. It also compares what departing customers paid with your average. It runs in your browser.

How to use it

1. Choose the period your figures cover: a month, a quarter or a year.
2. Enter customers at the start, new customers and customers lost in that period.
3. Leave the divisor on "customers at the start" unless you need to match a report that uses the average.
4. Enter MRR at the start and the expansion, contraction and churned MRR from the customers you had at the start.
5. Copy the summary for your board pack or monthly report.

How to read the result

The example covers one quarter. You start with 500 customers, add 90 and lose 30, ending with 560. Customer churn is 30 ÷ 500 = 6% for the quarter, so retention is 94%. As a monthly rate that is 1 − 0.94^(1/3) = 2.04%, and annualised it is 1 − 0.94^4 = 21.9%. At 2.04% a month, the average customer stays about 1 ÷ 0.0204 = 49 months. If you divide by the average customer count instead, (500 + 560) ÷ 2 = 530, churn reads 5.66%, which is why you should always say which definition you used.

On revenue, the starting customers paid 40,000 a month. They lost 800 to downgrades and 1,600 to cancellations, and added 3,000 in upgrades. Gross revenue churn is (800 + 1,600) ÷ 40,000 = 6%, and gross revenue retention is 94%. Net revenue retention is (40,000 + 3,000 − 800 − 1,600) ÷ 40,000 = 101.5%, so the same customers now pay more than they did at the start of the quarter.

The 30 customers who left paid 1,600 between them, about 53 each, against an average of 80. Losses are concentrated in smaller accounts, which is less damaging than the customer churn rate alone suggests. If the badge says leavers paid more than average, look at what your largest customers need and are not getting.

The formulas:

• Customer churn = customers lost ÷ customers at the start
• Gross revenue retention = (starting MRR − contraction − churned MRR) ÷ starting MRR
• Net revenue retention = (starting MRR + expansion − contraction − churned MRR) ÷ starting MRR

Put a value on retention with the LTV calculator and see how much one point less churn changes lifetime value. When customers leave because of missing features or a slow product, our web app development service can help fix the cause.