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SaaS Churn & LTV Calculator

Calculate your monthly churn rate, retention metrics, and Customer Lifetime Value (LTV) instantly.

Calculation Results

Churn Rate 0%
Retention Rate 0%
Avg. Lifespan 0 Mo
Lifetime Value (LTV) $0
function calculateSaaSMetrics() { var start = parseFloat(document.getElementById('startingCustomers').value); var lost = parseFloat(document.getElementById('lostCustomers').value); var arpu = parseFloat(document.getElementById('avgRevenue').value); var resultsDiv = document.getElementById('saasResults'); if (isNaN(start) || isNaN(lost) || isNaN(arpu) || start 0) { lifespan = 1 / (churnRate / 100); ltv = arpu * lifespan; } else { lifespan = Infinity; ltv = Infinity; } document.getElementById('resChurn').innerText = churnRate.toFixed(2) + '%'; document.getElementById('resRetention').innerText = retentionRate.toFixed(2) + '%'; document.getElementById('resLifespan').innerText = lifespan === Infinity ? 'Infinite' : lifespan.toFixed(1) + ' Mo'; document.getElementById('resLTV').innerText = ltv === Infinity ? 'Infinite' : '$' + ltv.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); resultsDiv.style.display = 'block'; }

Understanding Your SaaS Churn and Lifetime Value (LTV)

In the world of Software as a Service (SaaS), growth is often measured by how many new customers you acquire. However, the true health of your subscription business is determined by how many customers you keep. Churn rate and Customer Lifetime Value (LTV) are the two most critical metrics for any subscription-based model.

What is Churn Rate?

Churn rate is the percentage of your customers who cancel their subscriptions over a given period (usually monthly or annually). High churn is a "leaky bucket" problem; you can spend thousands on marketing, but if customers leave as fast as they arrive, your business will stagnate.

What is Customer Lifetime Value (LTV)?

LTV represents the total revenue you can expect to earn from a single customer throughout their entire relationship with your company. It is calculated by multiplying your average monthly revenue per user (ARPU) by the average customer lifespan.

The Formulas Used in This Calculator

  • Churn Rate: (Lost Customers during period / Total Customers at start of period) x 100
  • Retention Rate: 100% – Churn Rate
  • Customer Lifespan: 1 / Churn Rate
  • Lifetime Value (LTV): ARPU x Customer Lifespan

A Practical Example

Imagine you run a project management tool with the following metrics:

  • Starting Customers: 500
  • Customers Lost: 25
  • Monthly Subscription (ARPU): $50

Using the calculator, your Churn Rate is 5%. This means your average customer stays for 20 months (1 / 0.05). Consequently, your LTV is $1,000 ($50 x 20 months).

Knowing your LTV is $1,000 allows you to make informed decisions about your Customer Acquisition Cost (CAC). As a general rule of thumb, a healthy SaaS business aims for an LTV to CAC ratio of 3:1.

How to Reduce Churn and Boost LTV

To improve your metrics, consider these three strategies:

  1. Improve Onboarding: Ensure customers find value in your product within the first 24 hours.
  2. Annual Billing: Moving customers to annual plans effectively reduces churn by locking them in for 12 months.
  3. Customer Success: Proactively reach out to users who show low activity levels before they decide to cancel.

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