How is Churn Rate Calculated

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Customer Churn Rate Calculator

Calculate your customer attrition percentage instantly.

Used to calculate Net Growth and Ending Count.
Churn Rate: 0.00%
Retention Rate: 0.00%
Ending Customer Count: 0
Net Customer Change: 0
function calculateChurn() { // Clear previous errors var errorDiv = document.getElementById('errorDisplay'); var resultDiv = document.getElementById('churnResults'); errorDiv.style.display = 'none'; resultDiv.style.display = 'none'; // Get Input Values var startCount = document.getElementById('customersStart').value; var lostCount = document.getElementById('customersLost').value; var newCount = document.getElementById('newCustomers').value; // Parse Values var start = parseFloat(startCount); var lost = parseFloat(lostCount); var gained = parseFloat(newCount); // Validation if (isNaN(start) || isNaN(lost)) { errorDiv.innerHTML = "Please enter valid numbers for starting customers and lost customers."; errorDiv.style.display = 'block'; return; } if (start <= 0) { errorDiv.innerHTML = "Customers at start of period must be greater than zero."; errorDiv.style.display = 'block'; return; } if (lost start) { errorDiv.innerHTML = "You cannot lose more customers than you started with."; errorDiv.style.display = 'block'; return; } // Handle optional input if (isNaN(gained)) { gained = 0; } // Calculations // Formula: (Lost Customers / Start Customers) * 100 var churnRate = (lost / start) * 100; var retentionRate = 100 – churnRate; var endingCustomers = start – lost + gained; var netChange = gained – lost; // Update UI document.getElementById('resultChurnRate').innerHTML = churnRate.toFixed(2) + "%"; document.getElementById('resultRetention').innerHTML = retentionRate.toFixed(2) + "%"; document.getElementById('resultEndingCount').innerHTML = Math.round(endingCustomers); var netChangeEl = document.getElementById('resultNetChange'); if (netChange > 0) { netChangeEl.innerHTML = "+" + Math.round(netChange); netChangeEl.style.color = "#27ae60"; // Green for growth } else if (netChange < 0) { netChangeEl.innerHTML = Math.round(netChange); netChangeEl.style.color = "#e74c3c"; // Red for loss } else { netChangeEl.innerHTML = "0"; netChangeEl.style.color = "#2c3e50"; } resultDiv.style.display = 'block'; }

How is Churn Rate Calculated?

Churn rate (sometimes called attrition rate) is a critical business metric that calculates the percentage of customers who stop doing business with a company over a specific timeframe. For SaaS (Software as a Service) and subscription-based businesses, calculating churn is essential for understanding the health of the revenue stream and customer satisfaction.

While looking at the raw number of lost customers is helpful, the churn rate standardizes this data, allowing you to compare performance across different time periods (monthly, quarterly, or annually).

The Basic Churn Rate Formula

To calculate customer churn rate, you need two primary data points: the number of customers at the beginning of the time period and the number of customers lost during that same period.

Churn Rate = (Customers Lost / Customers at Start of Period) × 100

Example Calculation:

  • You start the month with 500 paying customers.
  • By the end of the month, 25 of those specific customers have canceled their subscription.
  • Calculation: (25 ÷ 500) = 0.05
  • Result: 0.05 × 100 = 5% Churn Rate.

Important Note on "New Customers"

One common mistake when learning how churn rate is calculated is including new customers acquired during the month in the denominator (the "Start" number).

New customers acquired during the period should not count toward the starting total for that specific calculation, because they were not present at the start of the period to be at risk of churning. They will be included in the starting count for the next period.

Customer Churn vs. Revenue Churn

The calculator above determines Customer Churn (Logo Churn). However, not all customers pay the same amount. Losing one enterprise client paying $5,000/month hurts more than losing one small business client paying $50/month.

Revenue Churn calculates the percentage of revenue lost:

Revenue Churn = (MRR Lost / MRR at Start of Period) × 100

Where MRR stands for Monthly Recurring Revenue. It is possible for a company to have a high customer churn rate but a low revenue churn rate if they are retaining their highest-paying clients.

What is a "Good" Churn Rate?

Benchmarks vary significantly by industry:

  • B2C SaaS: 3% – 5% monthly churn is common.
  • B2B SMB: 2% – 5% monthly churn.
  • B2B Enterprise: Less than 1% monthly churn is the target.

The Relationship Between Churn and Retention

Churn rate is the inverse of your retention rate. If your churn rate is 5%, your retention rate is 95%. High retention is the key to maximizing Customer Lifetime Value (LTV). Even a small reduction in churn can have a compounding effect on growth, as fewer new customers are needed just to replace lost revenue.

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