How do you calculate churn rate?

Divide the number of customers lost during the period by the number of customers at the start of that period, then multiply by 100. Customers acquired during the period are excluded.

How do you convert monthly churn to annual churn?

Compound it rather than multiplying by twelve: annual churn = 1 − (1 − monthly churn)^12. A 2% monthly churn rate is about 21.5% a year, not 24%.

Should I track customer churn or revenue churn?

Both. Customer churn counts relationships lost; revenue churn counts money lost. Losing a few large accounts can leave customer churn low while revenue churn is high.

Free tool

Churn Rate Calculator

Churn rate = customers lost during the period ÷ customers at the start of the period × 100. To turn a monthly rate into an annual one, compound it: 1 − (1 − monthly churn)^12. Enter your numbers to get customer churn, revenue churn and the annual equivalent.

One month of data

Customers at the start of the monthCustomers lost during the monthDo not count customers who joined during the month.Recurring revenue at the start (optional)$Recurring revenue lost (optional)$

Monthly customer churn

4.29%

Annual churn (compounded)

40.9%

Not 51.4%: multiplying by 12 overstates churn.

Revenue churn

8.00%

Revenue churn is well above customer churn: your larger accounts are the ones leaving. Review risk on high-value accounts first.

Churn = 18 ÷ 420 × 100 = 4.29%
Annual = 1 − (1 − 0.0429)^12 = 40.9%
Revenue churn = $80,000 ÷ $1,000,000 = 8.00%

Frequently asked questions

How do you calculate churn rate?: Divide the number of customers lost during the period by the number of customers at the start of that period, then multiply by 100. Customers acquired during the period are excluded.
How do you convert monthly churn to annual churn?: Compound it rather than multiplying by twelve: annual churn = 1 − (1 − monthly churn)^12. A 2% monthly churn rate is about 21.5% a year, not 24%.
Should I track customer churn or revenue churn?: Both. Customer churn counts relationships lost; revenue churn counts money lost. Losing a few large accounts can leave customer churn low while revenue churn is high.

About the author

Abdessamad Ghanem

Customer Experience & Customer Success Consultant · Founder of Clarivoxx

Abdessamad Ghanem works across Customer Support, Sales, Customer Success, Account Management and Partner Management. He writes Clarivoxx Insights for B2B SaaS professionals who own retention, adoption and customer outcomes.

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Abdessamad Ghanem