Tiny Toolkit

Churn Rate Calculator

Calculate your monthly or annual customer churn rate, average customer lifetime, and implied revenue loss.

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Frequently Asked Questions

What is a good monthly churn rate for a SaaS business?
World-class SaaS companies target monthly churn below 0.5% to 1%. A 2% monthly rate sounds small but compounds to about 22% annual churn, meaning you lose roughly 1 in 5 customers per year. Early-stage companies often see 5 to 8% monthly churn as they find product-market fit.
How does monthly churn translate to annual churn?
Annual churn is not simply 12 times the monthly rate. The correct formula is: Annual Churn = 1 - (1 - monthly churn)^12. At 2% monthly churn, annual churn is about 21.5%, not 24%.
What is average customer lifetime?
Average customer lifetime = 1 / churn rate (expressed as a decimal). At 3% monthly churn, the average customer stays for about 33 months (approximately 2.8 years). This is also the basis for calculating LTV: LTV = ARPU x average lifetime.
What is the difference between customer churn and revenue churn?
Customer churn counts the percentage of customers lost. Revenue churn (also called MRR churn) measures the percentage of revenue lost. If high-value customers churn at higher rates, revenue churn can be much worse than customer churn, and vice versa.

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