What this calculator does
Churn is the share of customers who left during a period, and retention is simply its complement. Both describe the same thing, but they lead to different conversations: churn draws attention to a leak, retention to what is working.
New customers can mask a serious problem. Losing 300 of 2,000 customers is 15.0 per cent churn, and adding 180 new ones still leaves the business smaller than it started, at −6.00 per cent net growth.
The formula
Churn divides customers lost by customers at the start of the period. Retention is the remainder. The closing count adds new customers to what survived, and net growth compares that against the opening figure.
| Term | Meaning |
|---|---|
| Churn rate | Customers lost as a share of those present at the start. |
| Retention rate | The complement of churn: the share who stayed. |
| Net growth | The change in total customers once new arrivals are counted. |
The inputs explained
| Field | What to enter |
|---|---|
| Customers at start of period | Customers at the beginning of the period. |
| Customers lost during period | Customers who left during the period. |
| New customers gained | New customers gained during the period. |
When to use it
Diagnosing stalled growth
Strong acquisition with flat totals almost always means churn is absorbing it.
Estimating customer lifetime
Monthly churn inverted gives the average months a customer stays.
Tracking the effect of a change
Churn before and after a product or pricing change is the clearest measure of its reception.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How much churn can acquisition absorb?
The same acquisition against three levels of loss.
Questions
Why does churn matter more than acquisition?
Because it compounds against you. Acquisition adds customers once; churn removes them continuously, so a high rate means running to stand still. It is also usually cheaper to retain a customer than to win a new one.
How does churn relate to customer lifetime?
Average lifetime is roughly one divided by the churn rate for the period. Three per cent monthly churn implies an average lifetime of about 33 months, which is how churn feeds directly into lifetime value.
What is revenue churn?
The same calculation applied to revenue rather than customer count. It matters because losing one large account can hurt far more than losing several small ones, which a customer-count measure would miss entirely.
What is negative churn?
When existing customers expand their spending by more than departing customers take away, so revenue from the existing base grows without any new customers. It is a strong position and rare outside subscription software.
For what it costs to replace those customers, see the customer acquisition cost calculator. For what each one is worth, see the SaaS lifetime value calculator.