SaaS Churn Rate Calculator
Analyze your customer retention and revenue health in seconds.
Customer Churn Rate:
0%
Revenue Churn Rate (Gross):
0%
Customer Lifetime Value (LTV):
$0
Avg. Customer Lifespan:
0 Months
What is SaaS Churn Rate?
In the world of Software as a Service (SaaS), Churn Rate is the percentage of customers or revenue that leaves your platform during a specific period. It is the antithesis of growth. If your churn rate exceeds your new acquisition rate, your business is shrinking.
How to Calculate Churn Rate
There are two primary ways to measure churn:
- Customer Churn: Focuses on the number of logos or subscribers lost.
Formula: (Lost Customers / Starting Customers) x 100 - Revenue Churn: Focuses on the dollar amount lost, which accounts for different pricing tiers.
Formula: (Lost MRR / Starting MRR) x 100
Example Calculation
Imagine your SaaS started the month with 500 customers and a Monthly Recurring Revenue (MRR) of $25,000. During that month, 20 customers cancelled their subscriptions, resulting in a loss of $1,000 in MRR.
| Metric | Calculation | Result |
|---|---|---|
| Customer Churn | (20 / 500) * 100 | 4% |
| Revenue Churn | ($1,000 / $25,000) * 100 | 4% |
Why Understanding LTV Matters
The Customer Lifetime Value (LTV) tells you how much revenue you can expect from a single customer before they churn. By reducing churn, you exponentially increase LTV. For instance, reducing churn from 5% to 2.5% effectively doubles the lifetime value of every customer you acquire.
Benchmarks: What is a "Good" Churn Rate?
Benchmarks vary significantly by the target market:
- SMB (Small Business): 3% – 7% monthly churn is common.
- Mid-Market: 1% – 2% monthly churn.
- Enterprise: Less than 1% monthly churn (often measured annually).