Maxi Calculator

Churn Rate Calculator

Calculate and analyze customer churn metrics to improve retention

Churn Rate Calculator

Enter the number of customers at the start of the period

Enter the number of customers at the end of the period

Enter the number of customers who left during the period

Enter the number of new customers acquired during the period

Choose the time period for the churn calculation

Optional: Enter the average monthly revenue per customer

Table of Contents
Understanding Customer Churn

Customer churn, also known as customer attrition, is the rate at which customers stop doing business with a company over a given period. Understanding churn is crucial because:

  • It directly impacts revenue and growth potential
  • Acquiring new customers is typically more expensive than retaining existing ones
  • High churn rates can indicate problems with product, service, or customer satisfaction
  • It affects customer lifetime value and business sustainability
Calculating Churn Rate

Basic Churn Rate Formula

Churn Rate = (Lost Customers / Starting Customers) × 100

Net Churn Rate Formula

Net Churn Rate = ((Lost Customers - New Customers) / Starting Customers) × 100

Time Periods

Churn can be measured over different time periods, each providing different insights:

  • Monthly: Most common for subscription businesses
  • Quarterly: Provides a medium-term view
  • Annually: Shows long-term retention trends
Types of Churn Metrics

Customer Churn

Measures the percentage of customers who stop using your product or service.

Revenue Churn

Calculates the loss of recurring revenue from churned customers. This can differ from customer churn if customers spend different amounts.

Net Churn

Takes into account both lost and new customers, providing a more complete picture of customer base changes.

Retention Rate

The opposite of churn rate, showing the percentage of customers who continue using your product or service.

Strategies to Reduce Churn
  • Improve Customer Onboarding: Ensure customers understand and get value from your product quickly
  • Regular Communication: Keep customers engaged and informed about new features and benefits
  • Proactive Support: Address issues before they lead to customer dissatisfaction
  • Gather Feedback: Regularly collect and act on customer feedback
  • Identify At-Risk Customers: Use analytics to spot warning signs of potential churn
  • Add Value: Continuously improve your product and demonstrate its value to customers
Frequently Asked Questions

What is a good churn rate?

Acceptable churn rates vary by industry and business model. For B2B SaaS companies, annual churn rates below 5-7% are often considered good, while B2C businesses might accept higher rates. The key is to benchmark against your industry and continuously work to improve.

How does churn affect customer lifetime value (CLV)?

Churn rate directly impacts CLV because it determines how long a customer typically stays with your business. A lower churn rate means longer customer relationships and higher lifetime value. CLV can be calculated as: Monthly Revenue per Customer / Monthly Churn Rate.

Should I focus on reducing churn or acquiring new customers?

Both are important, but reducing churn often provides better ROI since acquiring new customers typically costs 5-25 times more than retaining existing ones. A balanced approach is best, with particular attention to retention if churn rates are high.

How often should I measure churn?

Monitor churn monthly to spot trends quickly, but also track quarterly and annual rates for a broader perspective. Different time periods can reveal different patterns and help you understand seasonal effects or long-term trends.