Customer Churn Rate Calculator
Churn rate measures the percentage of customers who stop using your product or service over a given period. It's a critical metric for subscription businesses, SaaS, and any company with recurring revenue. High churn erodes growth and increases acquisition costs.
FAQ
Q1: What is a good churn rate?
Benchmarks vary: SaaS B2B: ~3-5% monthly churn (good), <2% excellent. SaaS B2C: higher, ~5-7% monthly. Non-subscription e-commerce: lower churn focus (repeat purchase rate). Annual churn should generally be <20% (monthly <2%). Strive for negative churn (expansions > losses) in mature SaaS.
Q2: How can I reduce churn?
Reduce churn by: (1) Improving onboarding—ensure users see value quickly; (2) Proactive customer success—reach out before issues arise; (3) Product-market fit—build features users need; (4) Pricing alignment—ensure value justifies cost; (5) Win-back campaigns—target at-risk users; (6) Loyalty programs; (7) Exit surveys to understand why customers leave.
Q3: Gross churn vs Net churn?
Gross churn = (Lost customers / Starting customers). Net churn = (Lost MRR - Expansion MRR) / Starting MRR. Net churn can be negative (net revenue retention >100%), meaning expansions outweigh losses. Net churn is a more nuanced business health indicator.
Tip: Track churn by cohort (acquisition month, plan type) to see which segments are sticky and which need attention. A low overall churn can mask high churn in new users.