SaaS Churn Rate Calculator
Calculate customer churn, gross and net revenue churn, retention, and average customer lifetime in one place. Benchmark your rate against your segment and see exactly what churn is costing you in lost ARR.
Inputs
Use a single monthly period. Everything updates instantly.
Selling to small and mid-size businesses. Monthly churn of 3 to 5 percent is common, 3 percent or below is healthy.
Total paying customers when the month began
Accounts that cancelled during the month
Total recurring revenue when the month began
Recurring revenue lost from cancellations and downgrades
Extra recurring revenue from upgrades and seat growth
Monthly churn benchmarks by segment
Net revenue retention above 100 percent means your existing base grows in value on its own. That is the goal, and it is worth more than any single acquisition channel.
Related tools
Want this built for you? Week One Labs ships custom SaaS and mobile MVPs in fixed-price 14-day sprints.
Fixed price. You own the code from day one. Book a free scope call.
I know which AI tools are worth your time.
I build with AI every single day. I will send you what actually works, what is overhyped, and what you should be paying attention to next. No fluff, just signal.
Get the AI signal. Drop your email below.
No spam. Just useful AI intel for builders.
Frequently asked questions
What is a good churn rate for SaaS?+
It depends entirely on who you sell to. For B2B SaaS selling to enterprises, good monthly customer churn is under 1 percent, which is roughly 10 to 12 percent a year. For SMB focused SaaS, monthly churn of 3 to 5 percent is common and 3 percent or below is considered healthy. For consumer subscriptions, monthly churn is often higher still, sometimes 5 to 7 percent. The single most useful target is negative net revenue churn, where expansion from existing customers more than offsets the revenue you lose, because that means your customer base grows in value even with zero new sales.
How do I calculate churn rate?+
Customer churn rate equals the number of customers you lost during a period divided by the number you had at the start of that period. If you began the month with 500 customers and lost 15, your monthly customer churn is 3 percent. Revenue churn is the same idea applied to money: the recurring revenue lost from cancellations and downgrades divided by the revenue you started with. Always state the period, because a 3 percent monthly rate and a 3 percent annual rate are wildly different businesses.
What is the difference between customer churn and revenue churn?+
Customer churn counts logos, treating every cancelled account as equal. Revenue churn counts dollars, so losing one large account hurts more than losing several small ones. The two can diverge sharply: you might lose many small customers but keep your big accounts, so customer churn looks bad while revenue churn looks fine, or the reverse. Net revenue churn goes one step further by subtracting the expansion revenue you gain from existing customers upgrading. Net revenue churn is the number investors care about most.
What is negative churn and why does it matter?+
Negative net revenue churn, also called net negative churn, happens when the extra revenue from existing customers upgrading and expanding is greater than the revenue you lose from cancellations and downgrades. When that is true, your existing customer base grows in value every month even if you never sign a single new customer. It is the strongest signal of product market fit and pricing power a SaaS business can show, and it is why expansion revenue and good onboarding often matter more than chasing new logos.
How does churn affect lifetime value?+
Churn is the single biggest lever on customer lifetime value. Average customer lifetime in months is roughly one divided by your monthly churn rate, so cutting monthly churn from 5 percent to 2.5 percent does not improve lifetime by a little, it doubles it, from 20 months to 40. Because lifetime value scales directly with lifetime, halving churn roughly doubles the value of every customer you acquire and your payback math on acquisition spend improves just as much. This is why retention work usually beats spending more on acquisition.
What causes high SaaS churn?+
The most common cause is weak onboarding: customers who never reach the moment the product becomes obviously valuable cancel quickly, and most churn happens in the first 90 days. After that, the usual culprits are a mismatch between the customer and your ideal profile, missing features that a competitor offers, poor support, and involuntary churn from failed credit card payments, which can quietly account for 20 to 40 percent of all churn. Fixing involuntary churn with dunning and card retry logic is often the fastest retention win available.
How can I reduce churn?+
Start by separating voluntary churn from involuntary churn, because the fixes are completely different. For involuntary churn, add payment retries, dunning emails, and card update prompts. For voluntary churn, fix onboarding first so customers reach value fast, then identify the early warning signs of accounts that are slipping and reach out before they cancel. Annual billing reduces churn structurally by removing eleven monthly cancellation decisions. Finally, build expansion paths so good customers naturally spend more over time, which pushes you toward negative net churn.