Churn Calculator

What is churn rate?

Churn rate is the percentage of customers who stop using your product or service during a specific time period. It's a key metric for measuring customer retention, especially for subscription-based or SaaS businesses. Analyzing your churn rate while measuring active users will help you understand how to reduce it.

How do I calculate churn rate?

Churn rate is calculated by dividing the number of customers lost during a set period by the number of customers at the beginning of that period (see below). To calculate churn rate:

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

If you start the month with 500 customers and lose 50, your monthly churn rate is 10%.

Churn is typically measured monthly, quarterly, or annually.

What is a good churn rate?

A churn rate of 5% annually is often considered low, while anything over 20% is high.

Acceptable churn varies by business model and customer lifetime value. Always assess churn in context—monthly churn of 2% may seem low, but compounds to 22% annually. Also consider how revenue changes from upsells, cross-sells, or high-value users impact overall health.

How can I reduce churn?

1. Deliver value and high-quality UX
A great product and experience keep users engaged. Prioritize customer needs and listen to user feedback on what's working well. Providing a quality product or service, ensuring a user-friendly experience, and adapting to customer feedback are all great ways of improving customer retention—and in turn, reducing your churn rate.

2. Understand engagement and why users leave
Analyzing the source of churn is a great way to reduce it. Use exit surveys, feedback forms, and user journey analytics to find churn triggers and drop-off points. Data helps you find solutions to users' problems and reduce churn.

3. Create negative churn
Churn can be supplemented by increased revenue from your retained customers. Increase customer lifetime value from existing customers through upsells, cross-sells, and usage-based pricing. Keep your power users engaged.

4. Build customer loyalty
Introduce rewards or loyalty programs to retain customers longer and boost lifetime value. Ensuring that your customers stay for long periods is essential as you earn sustainable revenue over an extended timeframe rather than relying on short-term sales.

5. Offset churn with user acquisition
Acquiring new users can offset churn temporarily, but Identifying and addressing the source of churn is often a better tactic. Your long-term focus should be on improving retention, as it's more cost-effective. Sustainable growth comes from long-lasting, high-spending customers.