Churn Rate & Retention Calculator
Convert monthly churn into annualized churn, retention rate, and average customer lifetime. Runs in your browser.
Retention & lifetime
- Monthly retention
- 95.0%
- Annualized churn
- 46.0%
- Annual retention
- 54.0%
- Average customer lifetime
- 20.0 months (1.7 yr)
Annualized churn = 1 − (1 − monthly churn)^12 (it compounds, so 5%/mo ≈ 46%/yr, not 60%). Average customer lifetime ≈ 1 ÷ monthly churn rate. For context, healthy SaaS monthly churn is often cited around 1–2% (lower for annual contracts); consumer apps churn far higher. Informational.
About this tool
Churn — the rate at which customers leave — quietly determines the health of any subscription business, and small monthly numbers hide big annual consequences. This calculator takes your monthly churn rate and derives the metrics that matter: the annualized churn (which compounds, so 5% a month is about 46% a year, not 60%), the monthly and annual retention rates, and the average customer lifetime, estimated as one divided by the monthly churn rate. That lifetime figure feeds directly into customer lifetime value — halving churn roughly doubles how long customers stay and the value they generate, which is why retention is often the highest-leverage thing a subscription business can improve. For context, healthy SaaS monthly churn is frequently cited around 1–2% (lower still for annual contracts and enterprise), while consumer apps churn much faster. The relationships here are exact math from your churn input; real churn varies by cohort and over time, so track it by segment. It is informational, not financial advice. Everything runs in your browser.
How to use it
- Enter your monthly churn rate as a percentage.
- Read the annualized churn and retention rates.
- Note the average customer lifetime in months.
- Use the lifetime figure in your LTV calculation; focus on lowering churn to raise it.
Frequently asked questions
- How does monthly churn become annual churn?
- It compounds: annual retention = (1 − monthly churn)^12, and annual churn is 1 minus that. So 5% monthly churn is about 46% annual churn (not 5% × 12 = 60%), because each month's churn applies to the shrinking remaining base.
- How is average customer lifetime calculated?
- Approximately 1 ÷ monthly churn rate. At 5% monthly churn, average lifetime is about 1 ÷ 0.05 = 20 months. Lower churn means longer lifetimes and higher lifetime value.
- What is a good churn rate?
- For SaaS, monthly churn around 1–2% is often considered healthy (enterprise and annual-contract businesses are lower), translating to ~10–20% annually. Consumer subscriptions and apps typically churn much faster. Benchmarks vary widely by market.
- Why does churn matter so much?
- Because it caps growth and slashes lifetime value. High churn means you must constantly replace customers just to stay flat, and it shortens each customer's lifetime, lowering LTV and worsening your LTV:CAC ratio. Reducing churn compounds in your favor.
- Should I track revenue churn or customer churn?
- Both. Customer (logo) churn counts accounts lost; revenue churn weights by spend and can be offset by expansion (upsells), sometimes turning net revenue churn negative. This tool models a single churn rate; track revenue churn separately for the full picture.
- Is this financial advice?
- No. It is an informational metric calculation.