About churn rate calculator
Churn is the share of customers who leave in a period. Retention is its opposite.
Formula
Churn rate = customers lost ÷ customers at the start of the period × 100. Losing 20 of 400 customers is 5% churn, or 95% retention.
Monthly to annual
A small monthly figure compounds. 5% monthly churn means about 46% of customers are lost in a year.
A worked example
Starting a month with 500 customers and losing 25 gives monthly churn of 5 percent, or 95 percent retention. At that rate only about 54 percent of customers remain after a year, so annual churn is about 46 percent.
Why a small number matters
Reducing monthly churn from 5 percent to 3 percent keeps about 69 percent of customers after a year, which is a big difference in lifetime value.
