What is Churn Rate?
Churn Rate, also known as customer attrition rate, measures the percentage of customers who cancel or stop using a service over a given period. It is a critical metric for SaaS companies, subscription-based businesses, and membership services, as high churn can negatively impact revenue and long-term sustainability.
Churn Rate Formula
The standard churn rate formula is:
Churn Rate (%) = (Customers Lost ÷ Customers at Start) × 100
Why is Churn Rate Important?
Monitoring churn helps businesses:
Identify Revenue Loss Risks – Understand how customer drop-off affects financial health.
Improve Customer Retention Strategies – Reduce churn through engagement, better service, and targeted retention efforts.
Enhance Predictive Analytics – Forecast future churn and develop proactive solutions.
Optimize Marketing & Acquisition Costs – Lower churn means a higher return on investment (ROI) from new customer acquisition.
How to use Churn Rate Calculator
Step 1: Enter Your Customer Data
Total Customers at the Start of the Period – The number of active subscribers at the beginning.
Customers Lost in the Same Period – How many customers canceled or stopped paying?
Step 2: (Optional) Add ARPU to Calculate Revenue Lost
If Average Revenue Per User (ARPU) is entered, the calculator will estimate how much revenue you’re losing due to churn!
Step 3: Choose a Time Period
Select whether you want to measure churn Monthly, Quarterly, or Annually.
Step 4: Click "Calculate Churn Rate"
The tool will instantly display:
Churn Rate (%) – The percentage of customers lost.
Retention Rate (%) – The percentage of customers who stayed.
Revenue Lost Due to Churn ($) – The financial impact of losing customers.
💡 Tip: Want to see how much revenue you're losing? Enter an ARPU value as well.