Churn Rate Calculator
Customer churn for a month, quarter or year, the compounded annual rate, the expected customer lifetime, and gross and net revenue churn.
Result
Customer churn for the period: 3%
Churn for the period you enter. No typical churn rate is given, because none applies across businesses.
- Customer retention for the period
- 97%
- Compounded to a year
- 30.62%
- Expected lifetime, in periods
- 33.3
https://calcgallery.com/business-investing/churn-rate-calculator/
Results are arithmetic estimates based on the assumptions you enter, not accounting, tax, investment or lending advice. Forecasts can be wrong and important decisions should be checked with a qualified adviser. Read the full disclaimer
How to use the Churn Rate Calculator
- Choose the period your counts cover, a month, a quarter or a year.
- Enter the customers you had at the start, and how many of those had left by the end.
- Optionally enter recurring revenue at the start, the revenue lost to cancellations and downgrades, and the revenue gained from existing customers, for revenue churn.
The formulas
customer churn = customers lost ÷ customers at the startretention = 1 − churnannual churn = 1 − (1 − churn)^periods per yearexpected lifetime = 1 ÷ churn, in periodsgross revenue churn = revenue lost ÷ revenue at the startnet revenue churn = (revenue lost − expansion revenue) ÷ revenue at the startCustomers or revenue
Customer churn counts heads. Revenue churn weights each customer by what they pay. The two can move in opposite directions: losing many small customers while keeping the large ones gives high customer churn and low revenue churn. Gross revenue churn shows what is leaving; net revenue churn shows whether the customers you already have are paying more or less over time.
The expected lifetime
If a constant share of customers leaves each period, the average customer stays 1 ÷ churn periods. At 3% a month that is 33.3 months. This feeds straight into the customer lifetime value calculator. It assumes churn stays the same for old and new customers, which is rarely exactly true.
With your numbers
- Churn = 36 ÷ 1,200 = 3%
- A year = 1 − (1 − 3%)^12 = 30.62%, not 36%
- Net revenue churn = (lost − expansion) ÷ starting revenue = -1.37%
Quick reference
Churn for the period you enter. No typical churn rate is given, because none applies across businesses.
| Example | Customer churn for the period |
|---|---|
| 36 of 1,200 in a month | 3% |
| 50 of 1,000 in a month | 5% |
| 90 of 1,500 in a quarter | 6% |
| 200 of 800 in a year | 25% |
| With revenue and expansion | 3% |
| No customers lost | 0% |
Common questions about the Churn Rate Calculator
- Why is annual churn not twelve times monthly churn?
- Because each month's churn applies only to the customers still there. Losing 5% a month keeps 95% each month, and 0.95 to the twelfth power is about 54%, so 45.96% leave over the year, not 60%. Multiplying overstates annual churn, and the error grows with the rate.
- Should new customers be counted?
- Not in the basic rate. Count customers at the start of the period and how many of those left. Customers who joined and left in the same period are real churn, but mixing them in makes the rate depend on how fast you are growing. Track them separately if they matter.
- How can net revenue churn be negative?
- When existing customers upgrade or buy more by more than the revenue lost to cancellations and downgrades. With 95,000 of starting revenue, 3,200 lost and 4,500 of expansion, net revenue churn is −1.37%: the customers you started with pay more at the end than at the start.
- What is a normal churn rate?
- This page does not give one. Churn varies enormously with price, contract length, customer type and how churn is counted, so a figure from another business says little about yours. Compare your own rate over time.