Churn is the share of customers (or revenue) lost in a period — the metric that makes or breaks subscription businesses. Customers lost over customers at the start.
The example
15 lost of 500 at start.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | Lost | 15 |
| 3 | At start | 500 → 3% |
The formula
The formula:
How it works
How it works:
- Divide customers lost in the period by the count at the start.
- Retention is the flip side:
1 - churn. - Revenue churn uses dollars lost over starting MRR — and can go negative if upgrades outweigh losses.
- Small monthly churn compounds — 3%/month is ~30% a year, not 36%.
Revenue churn vs logo churn. Losing a few small accounts (high logo churn) can matter less than losing one big one (high revenue churn). And net revenue churn subtracts expansion from existing customers — a great SaaS business can have negative net churn, growing revenue even while losing some logos. Track both.
Try it: interactive demo
Customers lost and at start.
Variations
Retention rate
The flip side:
Revenue churn
Dollars lost:
Annual from monthly
Compounded:
Pitfalls & errors
Starting count. Divide by customers at the start of the period, not the average.
Logo vs revenue. Customer churn and revenue churn can differ sharply.
Don’t just ×12. Monthly churn compounds — use 1-(1-m)^12 for annual.
Practice workbook
Frequently asked questions
How do I calculate churn rate in Excel?
How do I annualize monthly churn?
What's revenue churn?
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