SaaS Churn Rate Calculator
Measure your customer retention and business health
Understanding SaaS Churn Rate
Churn rate is a critical metric for any Subscription as a Service (SaaS) business. It represents the percentage of customers who stop using your service during a specific timeframe. High churn rates often indicate dissatisfaction with the product, better competitor offerings, or poor customer onboarding.
If you start the month with 1,000 customers and 50 customers cancel their subscription by the end of the month, your calculation is:
(50 / 1,000) x 100 = 5% Churn Rate.
How to Use This Calculator
To get an accurate picture of your SaaS health, enter the following data:
- Customers at Start: The total number of active subscribers on day one of your period (usually a month).
- Customers Lost: The number of those specific starting customers who cancelled before the period ended.
- ARPU: Your Average Revenue Per User. This helps calculate the financial impact of the churn and the Lifetime Value (LTV).
Why Low Churn Matters
In the SaaS world, it is significantly cheaper to retain an existing customer than to acquire a new one. A low churn rate allows for "compound growth," where new customers add to a stable base rather than just replacing lost ones. If your churn is higher than 5-7% annually for enterprise or 3-5% monthly for SMB, it is time to investigate your "product-market fit" and customer success strategies.
Key SaaS Formulas Used
Customer Churn Rate: (Lost Customers / Starting Customers) * 100
Customer Lifetime: 1 / Churn Rate (decimal format)
LTV: ARPU * Customer Lifetime