Churn Rate Calculator

If customers pay you every month, keeping them is worth more than winning them. This calculator turns last month's cancellations into a churn rate, an average customer lifespan, a lifetime value, and a twelve-month projection of where your recurring revenue is heading if nothing changes.

Churn Rate Calculator

How fast you lose customers, and where revenue lands in a year.

Customers at the start of the month

Active clients, subscribers, or retainer accounts.

Customers lost this month

Cancellations and accounts that stopped buying.

New customers this month

Accounts that started this month.

Average revenue per customer

$/mo

Monthly revenue divided by active customers.

Gross margin

%

What is left of that revenue after the cost of serving them.

Monthly churn rate

—

—Annual churn

—Average customer lifespan

—Lifetime value

—Net growth this month

—Recurring revenue now

—Recurring revenue in 12 months

—Revenue lost to churn per year

Today12 months from now

Estimates only. Results update as you type. Nothing you enter leaves your browser.

How churn is calculated

Divide the customers you lost during the month by the number you had at the start. Nine cancellations from a base of two hundred is 4.5% monthly churn. Do not include new customers won during the month in the denominator, or you will understate the rate.

Monthly churn = Customers lost ÷ Customers at start
Annual churn = 1 − (1 − Monthly churn)¹²
Average lifespan = 1 ÷ Monthly churn
Lifetime value = Monthly revenue per customer × Gross margin × Lifespan

Small numbers compound badly

Monthly churn feels small and annual churn does not. At 2% a month, about 22% of your customers are gone within a year. At 5% a month it is 46%, and the average customer stays only twenty months. At 8% it is 63%, and you are replacing nearly two thirds of your base every year just to stand still.

That is the real cost of churn: it converts your marketing budget from a growth engine into a treadmill. Every customer acquired replaces one lost instead of adding to the total.

What good looks like

For small businesses selling to other businesses on retainer or subscription, monthly churn below 2% is strong and 3% to 5% is common. Consumer subscriptions typically run higher, often 5% to 8%, because the decision to cancel is easier and cheaper. Service businesses with annual contracts should measure churn annually instead, since a monthly figure is noise.

Why customers leave

• They never got started properly. Most churn happens in the first ninety days, and it usually traces back to onboarding rather than the product.
• They stopped seeing the value. Quiet, regular proof of what you deliver prevents more cancellations than a discount at the end.
• Something went wrong and nobody fixed it. A problem handled well often leaves a customer more loyal than one who never had a problem.
• Their circumstances changed. Some churn is unavoidable, and chasing it to zero costs more than it saves.
• The card expired. Failed payments cause a surprising share of cancellations, and automatic retries and reminders recover much of it.

Retention beats acquisition

Cutting monthly churn from 5% to 3% raises average lifespan from twenty months to thirty-three, which lifts lifetime value by about two thirds without winning a single new customer. Set that against what you pay to acquire one, using the customer acquisition cost calculator, and retention work is almost always the cheaper of the two.

How AI can help: Feed an AI assistant your cancellation records with whatever reason was given and ask it to group them into themes and report which theme appears most in the first ninety days. Owners often assume they are losing people on price and find it is onboarding or a support issue instead. You can also ask it to flag accounts whose usage or order frequency has dropped against their own history, which is the earliest signal you get that someone is about to leave, and the only point at which a conversation still helps.

Frequently asked questions

What is a good monthly churn rate?

For small business-to-business subscriptions, under 2% a month is strong and 3% to 5% is common. Consumer subscriptions usually run higher, around 5% to 8%. Compare against your own trend, since the direction matters more than the level.

How do I calculate churn rate?

Divide customers lost during the period by the number of customers at the start of that period. Exclude customers you won during the period from the denominator.

What is the difference between customer churn and revenue churn?

Customer churn counts accounts; revenue churn counts dollars. They differ when the customers leaving are larger or smaller than average. Losing one big client can leave customer churn looking fine while revenue churn is severe, so track both if your customer sizes vary.

How does churn affect customer lifetime value?

Lifespan is one divided by the monthly churn rate, and lifetime value scales directly with it. Halving churn doubles the average lifespan and doubles lifetime value, with no change to pricing or acquisition.

Can churn ever be too low to worry about?

Some churn is natural: customers move, close, or genuinely no longer need what you sell. Chasing the last point or two usually costs more than it returns. The useful question is whether the reason is something you controlled.

More free small business calculators

Customer Acquisition Cost CalculatorWhat a customer costs to win, and what they are worth.Profit Margin & Markup CalculatorSet prices from a target margin, or check what a price really earns.Monthly Business ReviewTen minutes, seven numbers, and a grade for the month you just closed.Cash Runway CalculatorHow many months your cash lasts at your current burn.

See all thirteen on the small business calculators page.

These calculators give planning estimates, not tax, legal, or financial advice. Check important decisions with your accountant or lender.