What this calculator computes (and why it matters)

Most subscription businesses die quietly, not loudly. They don’t “run out of ideas.” They run out of retained demand. Churn shows whether your product is creating lasting value — and it tells you how much growth you must generate just to stand still.

The calculator supports two common definitions: customer churn (how many accounts you lost) and revenue churn (how much recurring revenue you lost). Both matter. If you lose low-paying customers but retain high-paying ones, customer churn may look “bad” while revenue churn looks fine. If the opposite happens (enterprise accounts cancel), customer churn can look “fine” while revenue churn is catastrophic.

This tool intentionally keeps the math simple and transparent. It’s designed for quick sanity checks, planning conversations, and “what-if” scenarios. For deep analysis (cohorts, segment churn, cancellation reasons, survival curves), you’ll still want your analytics stack — but you’d be surprised how often a simple churn snapshot is enough to unlock the next operational decision.

In customer mode, you enter the number of customers at the start of the period and the number of customers who left during the period. The calculator returns:

• Gross customer churn rate = customers lost ÷ customers at start
• Customer retention rate = 1 − churn rate
• Net customer churn (optional) = (customers lost − customers gained) ÷ customers at start
• Ending customers = start − lost + gained

Note the key idea: gross churn ignores acquisition. That’s on purpose. Gross churn tells you how “sticky” the product is. Net churn answers a different question: “Are we growing the customer base after accounting for churn?” Both are useful, but don’t confuse them. A business can have terrible gross churn and still grow if acquisition is strong — until marketing costs rise or channels saturate.

In revenue mode, you enter starting MRR (or ARR), MRR lost to cancellations/downgrades, and expansion MRR from upgrades and add-ons. The calculator returns:

• Gross Revenue Retention (GRR) = (start MRR − MRR lost) ÷ start MRR
• Gross revenue churn = MRR lost ÷ start MRR
• Net Revenue Retention (NRR) = (start MRR − MRR lost + expansion) ÷ start MRR
• Net revenue churn = (MRR lost − expansion) ÷ start MRR

GRR tells you whether revenue is being preserved before expansion. NRR tells you whether existing customers are growing enough to offset churn. Many strong B2B SaaS companies aim for NRR above 100% — meaning the existing base grows even if some customers leave.

The forecast uses a simple compounding retention model: Remaining after N months ≈ Start × (1 − churn)^N. It’s not a cohort model — it assumes the churn rate stays the same every month. That simplification is useful because it highlights the core point: churn repeats. If your churn is high, your future customer base (or MRR) shrinks quickly unless acquisition or expansion constantly “refills the bucket.”

Every metric, step by step (with examples)

Use the examples below to sanity-check your intuition. Numbers are rounded for clarity.

Suppose you start the month with 100 customers. You lose 10 customers. You also gain 20 new customers.

• Gross churn = 10 ÷ 100 = 10%
• Retention = 1 − 0.10 = 90%
• Net churn = (10 − 20) ÷ 100 = −10% (negative churn = net growth)
• Ending customers = 100 − 10 + 20 = 110

Interpretation: your acquisition is strong (net growth), but gross churn is still 10%. If acquisition slows, churn becomes the main limiter. Operationally, you’d investigate cancellations and onboarding, because reducing churn often increases LTV and reduces CAC payback time.

You start with $50,000 MRR. During the month, you lose $5,000 MRR from churn and downgrades. You add $8,000 expansion MRR from upgrades.

• Gross revenue churn = 5,000 ÷ 50,000 = 10%
• GRR = (50,000 − 5,000) ÷ 50,000 = 90%
• NRR = (50,000 − 5,000 + 8,000) ÷ 50,000 = 106%
• Net revenue churn = (5,000 − 8,000) ÷ 50,000 = −6%

Interpretation: even though churn exists, the base expands faster than it shrinks. That’s a strong signal of product value — especially if expansion is driven by usage or clear ROI.

Let’s take gross customer churn of 5% monthly. If churn stays constant, after 12 months:

• Remaining ≈ 100 × (1 − 0.05)¹² ≈ 100 × 0.54 = 54 customers

That’s why founders become obsessed with churn. A few points can change the entire company trajectory. Lower churn increases LTV, improves word-of-mouth, and makes paid acquisition easier to justify.

• Mixing timeframes: monthly churn and annual churn are not comparable without conversion.
• Counting “users” instead of “customers”: decide what leaving means (account vs. seat).
• Ignoring downgrades: for revenue churn, downgrades can matter as much as cancellations.
• Looking at one month only: churn is noisy. Track 3–6 months to see patterns.

Practical levers that usually move the number

Churn is an outcome — not a root cause. When churn rises, it’s typically because customers stop getting value, get confused, don’t trust the product, or find a cheaper/easier substitute. Here are levers that frequently reduce churn without requiring a full rebuild:

• Shorten time-to-first-value: fewer steps to the “aha” moment.
• Remove onboarding friction: templates, checklists, and “guided setup.”
• Instrument activation: know which actions predict retention.

• Add alerts when usage drops (a strong churn predictor).
• Build “health scores” for accounts and trigger outreach.
• Fix reliability and performance issues that erode trust.

• Expansion is great, but only if the core product is stable.
• Make upgrades feel like a natural next step, not a penalty.
• In B2B, tie upgrades to a clear ROI story (time saved, revenue gained, risk reduced).

• If churn spikes at renewal, you may be under-delivering for the price.
• If churn is immediate, pricing may be fine but onboarding is failing.
• Consider annual plans for committed users — but don’t hide value behind long contracts.

A simple rule: Find the biggest churn reason that’s fixable in 2 weeks. Fix that. Re-measure. Repeat. Churn improvements compound like growth improvements.

Frequently Asked Questions

• What’s a “good” churn rate?

  It depends on your market, price point, and sales motion. Low-priced consumer subscriptions typically see higher churn than enterprise contracts. Instead of chasing a universal benchmark, track your trend and compare churn by segment (SMB vs. mid-market vs. enterprise).

• Customer churn vs. revenue churn — which should I care about?

  Track both, but prioritize revenue churn and NRR if you’re B2B SaaS. Customer churn can hide a serious problem if a small number of high-paying customers leave.

• What is net churn?

  Net churn accounts for growth (new customers) or expansion (upsells) that offsets losses. “Negative churn” happens when expansion exceeds churn — meaning the existing base grows.

• Does this replace cohort churn analysis?

  No. This is a period-based calculator. Cohorts (e.g., customers who joined in a given month) often reveal whether churn is improving over time. Use this tool for fast planning, then validate with cohorts.

• How do I convert monthly churn to annual churn?

  A simple conversion uses compounding: annual retention ≈ (1 − monthly churn)¹². Annual churn ≈ 1 − annual retention.

• Why does my churn look different across tools?

  Definitions vary: logo churn vs. seat churn, churn including downgrades vs. cancellations only, and whether the denominator is start-of-period or average customers. Choose one definition and stay consistent.

Best practice: track segments, not just averages

Overall churn is useful, but it can hide what’s really happening. A healthy business often has “good churn” (customers who were never a fit) and “bad churn” (customers who found real value but still left). If you want the fastest churn improvement, split churn by:

• Plan: free vs paid vs premium tiers
• Segment: SMB vs mid-market vs enterprise
• Acquisition channel: paid search vs referrals vs outbound
• Activation level: users who hit the “aha” moment vs those who didn’t

Then run this calculator per segment. You’ll usually find one segment driving most churn — and one fix that moves the needle.