Customer Churn Rate Calculator
Understand how many customers you are losing over a specific period. This calculator helps you pinpoint your churn rate, a critical metric for subscription-based businesses.
Your Churn Rate:
–%
What is Customer Churn Rate?
Customer churn rate, often simply called churn rate, is a key performance indicator (KPI) that measures the percentage of customers who stop doing business with a company or stop subscribing to a service during a given period. It is particularly vital for subscription-based businesses like SaaS companies, streaming services, and telecom providers.
A high churn rate can significantly impact a company's revenue, growth, and profitability. Reducing churn is often more cost-effective than acquiring new customers. Understanding your churn rate allows you to identify potential issues with your product, service, customer support, or pricing and to take corrective actions.
How to Calculate Churn Rate:
The formula for calculating customer churn rate is:
Churn Rate = (Customers Lost During Period / Customers at the Start of Period) * 100
In this calculator, "Customers Lost During Period" is derived by subtracting the customers at the end of the period from the customers at the start of the period, then adding back any new customers acquired. This ensures we're only looking at the customers who *left* from the original cohort.
Customers Lost During Period = (Customers at Start of Period – Customers at End of Period) + New Customers Acquired During Period
It is important to note that the definition of "Customers Lost During Period" can vary slightly. Some simpler formulas might just use (Customers at Start – Customers at End), but this doesn't account for new customers acquired, which is crucial for a true understanding of churn originating from the initial customer base. This calculator uses the more comprehensive method.
Example Calculation:
Let's say at the beginning of the month, you had 1000 customers. By the end of the month, you have 950 customers. During that same month, you acquired 100 new customers.
- Customers at Start of Period: 1000
- Customers at End of Period: 950
- New Customers Acquired: 100
First, calculate customers lost:
Customers Lost = (1000 – 950) + 100 = 50 + 100 = 150
Then, calculate the churn rate:
Churn Rate = (150 / 1000) * 100 = 0.15 * 100 = 15%
This means your company lost 15% of its customers (from the initial cohort, considering new acquisitions) during that month.