What is churn rate?
Churn rate is the percentage of customers (or revenue) you lose over a period. It is the quiet killer of SaaS growth: every point of churn is a customer your acquisition engine has to replace before you grow at all. Because average customer lifespan is 1 divided by churn, small changes in churn have outsized effects on lifetime value.
How this calculator works
The formula: Customer churn rate = customers lost ÷ customers at start Retention rate = 1 − customer churn rate Avg lifespan = 1 ÷ churn rate (in the same period) Revenue churn rate = MRR churned ÷ MRR at start
Match the period to how you report: a 3% monthly churn is very different from 3% annual. Lifespan comes out in the same unit as your churn period.
What is a good churn rate for B2B SaaS?
| Segment | Healthy monthly churn |
|---|---|
| Enterprise | Under 1% |
| Mid-market | 1 to 2% |
| SMB / self-serve | 3 to 5% |
Revenue churn can go negative when expansion from existing customers outweighs losses, which is the hallmark of a great SaaS business.
How to reduce churn
- Acquire better-fit customers. ICP-aligned accounts from organic search retain far better than discount-driven or poorly-targeted paid signups.
- Nail onboarding and time-to-value. Most churn is decided in the first 90 days.
- Drive product adoption. Usage of core features is the strongest retention predictor.
- Build expansion paths. Upsells and seat growth turn revenue churn negative.
Frequently asked questions
How do you calculate churn rate?
Customer churn rate = customers lost during a period ÷ customers at the start, times 100. Losing 15 of 500 customers in a month is 3% monthly churn. Revenue churn applies the same formula to MRR.
What is a good churn rate for B2B SaaS?
Roughly 1% monthly or lower is healthy (about 5 to 7% annually). SMB products run higher (3 to 5% monthly); enterprise should be well under 1%. Revenue churn can go negative with strong expansion.
What is the difference between customer churn and revenue churn?
Customer churn counts logos lost; revenue churn counts dollars lost. Revenue churn matters more because losing a few large accounts can outweigh many small ones. Net revenue retention accounts for expansion that offsets churn.
How does churn affect lifetime value?
Average lifespan is 1 ÷ churn, so churn is the biggest driver of LTV. Cutting monthly churn from 4% to 2% doubles lifespan (25 to 50 months) and doubles LTV with no pricing change.