# Churn Rate

> The percentage of customers (or revenue) you lose in a period.

- Type: Calculator: How fast customers leave you
- Tags: Metrics, Retention
- Growth levers: Retention (primary), also Revenue
- ~683 words

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**Churn Rate Calculator.** The share of customers (or revenue) you lose over a period. Inputs: Customers lost this period, Customers at start of period. Outputs: Customer churn rate.

Churn rate is the share of customers, or revenue, that you lose over a given period. It's the leak in your bucket, and the single fastest way to see whether growth is real or just papered over by acquisition.

> **Formula:** Churn rate = customers lost in the period ÷ customers at the start of the period × 100. For revenue churn, swap customers for MRR.

## How to calculate churn rate

Worked example: you start January with 1,000 paying customers and 30 of them cancel before the month ends. 30 ÷ 1,000 × 100 = **3% monthly churn**. Count only customers who were there at the start; new signups that cancel in the same month get handled in cohort views, not this headline number.

The trap is that monthly churn compounds. 3% a month sounds harmless, but 1 − 0.97¹² works out to losing about 31% of your base in a year. At 5% monthly you lose 46% a year. Small monthly leaks are big annual floods, which is why churn deserves a spot next to [MRR](https://www.productgrowth.blog/calculators/monthly-recurring-revenue-mrr) on the dashboard, not in a quarterly review.

## Customer churn vs revenue churn

Customer churn counts logos; revenue churn counts dollars. They diverge the moment your customers vary in size: lose ten $10/month hobbyists and you barely notice, lose one $10,000/month account and revenue churn screams while customer churn shrugs. B2B teams should treat revenue churn as the primary number.

Watch **net revenue churn** above all: gross revenue lost minus [expansion revenue](https://www.productgrowth.blog/calculators/expansion-revenue) from upgrades. If expansion from existing customers outweighs losses, net churn goes negative, the holy grail. Your revenue then grows even with zero new customers.

## What is a good churn rate?

Benchmarks depend on who you sell to. [Recurly's 2024 State of Subscriptions](https://recurly.com/research/?utm_source=productgrowth.blog) puts median churn near 4% monthly across subscription businesses, with software voluntary churn closer to 2.2%. [Optifai's 939-company dataset](https://optif.ai/learn/questions/b2b-saas-churn-rate-benchmark/?utm_source=productgrowth.blog) splits that by segment: SMB SaaS at 3 to 5% monthly, mid-market at 1.5 to 3%, enterprise at 1 to 2%, and best-in-class under 1%. The pattern holds everywhere: the bigger the contract, the lower the churn you can survive.

| Segment | Monthly churn | Verdict |
| --- | --- | --- |
| Enterprise SaaS | 1-2% | The standard you're held to |
| Mid-market SaaS | 1.5-3% | Healthy |
| SaaS subscription median | ~4% | Survivable, not fundable |
| SMB / prosumer SaaS | 3-5% | Typical, fix before scaling spend |
| Any segment | >8% | Emergency. Stop acquiring, start retaining |

High churn quietly poisons every other metric: it shortens [customer lifetime value](https://www.productgrowth.blog/calculators/customer-lifetime-value-ltv), stretches your [CAC payback period](https://www.productgrowth.blog/calculators/cac-payback-period), and caps how big the business can ever get. Before spending another dollar on acquisition, check the inverse metric: [retention rate](https://www.productgrowth.blog/calculators/retention-rate).

## Churn Rate benchmarks by industry

| Industry | Median | Good | Great |
| --- | --- | --- | --- |
| SaaS | 3.8% | 2.0% | 1.0% |
| Fintech | 3.0% | 1.5% | 0.7% |
| Dev Tools | 1.8% | 1.0% | 0.6% |
| AI/ML | 5.0% | 3.0% | 1.8% |
| E-commerce | 6.0% | 3.5% | 2.0% |
| Healthtech | 3.2% | 1.8% | 0.9% |
| Martech | 4.8% | 2.8% | 1.5% |
*Monthly churn (%) · Recurly 2024 State of Subscriptions (median ~4% monthly across subscriptions; software voluntary churn ~2.2%); ChartMogul SaaS churn benchmarks 2025 (3,974 companies: gross MRR churn 8.2% under $25 ARPU vs 2.4% over $500); Optifai 2025 B2B segment dataset (939 companies: SMB 3 to 5%, mid-market 1.5 to 3%, enterprise 1 to 2%, best-in-class under 1%); Focus Digital 2025 SaaS-by-vertical report (Infrastructure & DevOps 1.8%, Marketing Automation 4.8%, Sales Enablement 5.2%, Healthcare SaaS 7.5%). AI/ML reflects the ChartMogul AI-native cohort and LiveX AI tools 3 to 6% monthly. Fintech and Healthtech bands lean to the embedded-B2B end of each report's range.*

The spread across industries is real, not noise. [Focus Digital's 2025 vertical report](https://focus-digital.co/average-churn-rate-by-industry-saas/?utm_source=productgrowth.blog) puts infrastructure and dev tools at the bottom (1.8% monthly, because nobody rips out their database on a whim) and marketing or sales tooling near the top (4.8 to 5.2%, because a tool that fails to show ROI gets cut first). AI/ML sits highest of all. ChartMogul's AI-native cohort calls it the tourist effect: people sign up to try the shiny thing, poke at it for a week, and leave. So read your row against your peers, not the global average. A 4% monthly churn that would worry a dev-tools company is a normal Tuesday for a consumer subscription box.

#### What is a good churn rate?

It depends on what you sell and who you sell to. For B2B SaaS, enterprise products target 1 to 2% monthly, mid-market sits around 1.5 to 3%, and SMB or prosumer tools run 3 to 5%, per Optifai's 939-company dataset. Median subscription churn lands near 4% monthly in Recurly's data. Best-in-class is under 1%. The larger the contract value, the lower the churn you can survive.

#### What is the difference between customer churn and revenue churn?

Customer churn is the percentage of accounts you lose; revenue churn is the percentage of recurring revenue you lose. They diverge when customers pay different amounts: losing one large account can dwarf losing many small ones. B2B businesses should track both but prioritise revenue churn.

#### How do you convert monthly churn to annual churn?

Annual churn = 1 − (1 − monthly churn)¹². You cannot just multiply by 12 because churn compounds on a shrinking base. A 3% monthly churn rate equals about 31% annually, and 5% monthly equals about 46% annually.

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