Churn Rate Calculator
Calculate your monthly and annual churn rate for customers or revenue. See retention rate, average customer lifetime, and compare against SaaS industry benchmarks.
What Is Churn Rate?
Churn rate measures the percentage of customers or revenue lost over a specific time period. It is the inverse of retention and the single most important health metric for subscription businesses. Monthly customer churn rate equals customers lost divided by customers at the start of the period. For SaaS companies, churn directly determines customer lifetime value (CLV = 1/churn x ARPU x margin) and long-term growth ceiling. Based on Recurly Research 2026 benchmark data, median B2B SaaS monthly churn is 3.5% for SMB and 1.2% for enterprise segments. Last updated: May 2026.
Customer Churn vs Revenue Churn
Customer churn counts the number of accounts lost regardless of their value. Revenue churn (also called MRR churn or gross dollar churn) measures the actual revenue impact. These numbers often differ significantly because smaller accounts churn at higher rates than enterprise accounts. A company might have 5% customer churn but only 2% revenue churn if mostly small accounts leave. Net revenue churn subtracts expansion revenue — if expansion exceeds gross churn, you achieve negative net churn, meaning your existing base grows without new customers. ProfitWell/Paddle research shows top-quartile SaaS achieves negative net revenue churn of -2% to -5% monthly.
How Churn Rate Impacts Long-Term Growth
Churn creates a compounding drag on growth. At 5% monthly churn, you lose half your customers in just 14 months (the customer half-life). At 2% monthly churn, half-life extends to 35 months. This means high-churn companies must acquire exponentially more customers just to maintain revenue — a growth treadmill. The growth ceiling formula shows that maximum achievable MRR equals new MRR per month divided by monthly churn rate. At $10K new MRR/month with 5% churn, your ceiling is $200K MRR. Reduce churn to 2% and the ceiling rises to $500K MRR — same acquisition, 2.5x the outcome.
Reducing Churn — Evidence-Based Strategies
According to ProfitWell retention studies (2024-2026 longitudinal data): (1) Onboarding optimization reduces 90-day churn by 25-40% — the activation window is critical. (2) Annual contracts reduce churn by 2-3x versus monthly billing because of switching costs and commitment. (3) Usage-based pricing aligns value with cost, reducing voluntary churn. (4) Proactive customer success outreach when usage drops below threshold prevents 15-20% of churns that would otherwise occur. (5) Win-back campaigns recover 5-10% of churned customers within 90 days. The compounding effect of even small churn reductions makes retention investment the highest-ROI activity in SaaS.