Churn Rate Calculator

What is Churn Rate?

Churn rate is the percentage of customers who stop using your product or service within a specific time period. It’s a critical metric for evaluating customer retention and business performance. A high churn rate signals potential issues with customer satisfaction, product value, or competition.

If you're looking for assistance with your SaaS business or need a team to optimize customer retention, consider working with a SaaS development company to improve your product and reduce churn.

Churn Rate Formula

The formula for churn rate is:

Churn Rate (%) = (Customers Lost Last Month / Total Customers at the Start of the Month​) * 100

This formula gives the percentage of customers lost in a specific period relative to the starting customer base.

If a business had 500 customers at the start of the month and lost 25 customers during the month, the churn rate is:

Churn Rate (%) = (25 / 500 )*100 = 5%

This means 5% of the customers stopped using the service during that month.

How to Use the Churn Rate Calculator (Step-by-Step)

1. Identify the Starting Customer Count: Find the total number of customers at the beginning of the month.
2. Count Lost Customers: Determine how many customers left during the same month.
3. Enter the Values: Input these numbers into the calculator.
4. View the Result: Instantly see the churn rate percentage and assess your customer retention performance.

Using this step-by-step approach, businesses can easily monitor and manage churn to ensure sustainable growth.

What is a Good Churn Rate?

A good churn rate varies by industry. For SaaS businesses, an annual churn below 5% is excellent. Telecoms aim for a monthly churn of 1-2%, while retail businesses often target below 10%. 

By understanding your churn rate, we can optimize Growth Marketing strategies to improve customer retention and fuel growth.

if you're considering building a custom app to enhance user engagement and reduce churn, iOS app development services can help you create a seamless user experience that keeps customers coming back.

Example of Churn Rate Calculation

At the beginning of January, a business had 1,000 customers. By the end of the month, 50 customers had canceled their subscriptions.

1. Identify the Starting Customer Count: The total number of customers at the beginning of January was 1,000.
2. Count Lost Customers: During January, 50 customers canceled their subscriptions.
3. Enter the Values: Using the formula:
   Churn Rate (%)=(Total Customers at the Start of the MonthCustomers Lost​)×100
4. Perform the Calculation:
   Divide the number of customers lost by the total number of customers at the start of the month:

(50 / 1,000 ) = 0.05

5. Convert to Percentage:
   Multiply the result by 100 to express it as a percentage:

0.05 * 100 = 5%

6. View the Result: After calculation, the churn rate is 5%.

This 5% churn rate indicates that out of every 100 customers, 5 left during January. Regularly calculating and assessing churn rate helps monitor customer retention and identify areas for improvement.

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