Churn Rate Calculator and Formula

This calculator works out the churn rate for a period such as a month. Enter the number of customers at the start of the period and how many of them left during it; you get the churn rate and the matching retention rate, both in percent.

Formula

Churn rate = customers lost ÷ customers at the start × 100%. Retention rate = 100% − churn rate.

• Count only customers who were there at the start; new sign-ups during the period are left out of both numbers.

Worked Example

500 customers at the start of the month, 25 of them cancel.

1. Churn = 25 ÷ 500 × 100 = 5.00%
2. Retention = 100 − 5 = 95.00%

How to read the result

Compare churn over periods of the same length. A monthly churn of 5% does not mean 60% a year: if it holds, the share left after 12 months is 0.95¹² ≈ 54%, so yearly churn is about 46%. Revenue churn uses lost recurring revenue instead of customer counts.

Limits and common mistakes

• Lost customers cannot be more than the starting count; the calculator shows Cannot compute.
• Mixing new customers into the lost count understates churn.
• Seasonal businesses should compare the same month year on year.

Frequently Asked Questions

What is a good churn rate?

It depends on the market and contract type; compare with your own history and similar businesses.

How do I convert monthly churn to annual?

Annual churn = 1 − (1 − monthly churn)¹², with churn as a decimal.

Do new customers count?

Not in the standard formula, which tracks the starting group.

What is retention rate?

100% minus the churn rate for the same group and period.

in s | Customers at the start of the period | customers | 500 | 1
in lost | Customers lost during the period | customers | 25 | 0
out ch | Churn rate | % | lost / s * 100 + 0 * sqrt(s - lost) | 2
out ret | Retention rate | % | 100 - ch | 2