Formulas
Lost = Start + New − End
Churn rate = Lost ÷ Start
Annual churn = 1 − (1 − Period churn)periods per year
Average lifetime ≈ 1 ÷ Churn rate
Churn rate = Lost ÷ Start
Annual churn = 1 − (1 − Period churn)periods per year
Average lifetime ≈ 1 ÷ Churn rate
Example: You start the month with 2,000 customers, add 150 and end with 2,050. You lost 100 customers — a 5% monthly churn rate and 95% retention. Annualized, that is 46% churn, and the average customer lasts about 20 months.
Reducing churn
- Improve onboarding — most churn happens in the first weeks.
- Watch usage data and reach out before customers cancel.
- Offer annual plans and a pause option instead of cancellation.
Turn churn into a lifetime value with the CLV calculator.
Frequently asked questions
How is churn rate calculated?
Churn rate = customers lost during the period ÷ customers at the start. Customers lost = start + new − end. With 2,000 at the start, 150 new and 2,050 at the end, 100 churned: a 5% churn rate.
How do I convert monthly churn to annual churn?
Annual churn = 1 − (1 − monthly churn)^12. 5% monthly churn is about 46% a year — not 60%, because each month’s churn applies to a smaller base.
What is a good churn rate?
For consumer subscriptions, monthly churn of 3–8% is common. B2B SaaS companies selling to larger businesses often aim for under 1% a month.
What is the average customer lifetime?
Roughly 1 ÷ churn rate. At 5% monthly churn, the average customer stays about 20 months.