Calculate customer churn rate for SaaS, subscription, and retention businesses. Free tool with formulas, benchmarks, and reduction strategies.
Churn rate measures the percentage of customers who stop using your product or service during a given period. Lower churn means better customer retention.
Enter the number of customers at the start and end of the period, and new customers acquired.
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Churn rate is a critical metric for subscription businesses, SaaS companies, and any business with recurring revenue. Understanding your churn helps identify customer satisfaction issues and revenue leakage.
Example 1: SaaS Monthly Churn
Start: 1,000 customers | End: 980 customers | New: 50 customers
Lost: 1,000 + 50 - 980 = 70 customers
Churn Rate = (70 / 1,000) × 100% = 7% monthly
Example 2: Subscription Service Annual Churn
Start: 5,000 subscribers | End: 5,200 subscribers | New: 800 subscribers
Lost: 5,000 + 800 - 5,200 = 600 subscribers
Churn Rate = (600 / 5,000) × 100% = 12% annual
A good churn rate varies by industry and business model. For B2B SaaS, monthly churn below 5% is excellent (aim for 2-3%). For B2C subscription services, monthly churn of 5-10% is more common. The key is to track churn consistently and work to reduce it over time.
How do I calculate churn rate in Excel?
Use the formula: =(Customers_Lost / Customers_at_Start) * 100. Customers Lost = Start + New - End.
What is the difference between churn rate and retention rate?
Churn rate measures customers lost (Revenue Leakers), while retention rate measures customers kept. Retention Rate = 100% - Churn Rate.