Churn Rate: 500 Customers, 25 Lost in a Month
Losing 25 customers from a base of 500 results in a monthly churn rate of 5%.
How to use this tool
- Enter the number of active customers at the start of the period.
- Enter how many of those customers you lost during the period (exclude new signups).
- Read your churn rate, retention rate, customers retained, and implied average lifetime.
A 5% monthly churn rate implies losing 60% of customers per year — understanding this benchmark helps SaaS companies model retention improvement goals.
Frequently asked questions
- What is a good churn rate?
- It depends heavily on segment. Many established SaaS businesses target monthly customer churn under 1–2%; small-business and consumer products often run higher. Lower is better, and the best companies achieve negative net revenue churn through expansion.
- Should I exclude new customers from the calculation?
- Yes. Churn measures losses among customers who already existed at the start of the period. Including new signups in the lost-customer count, or in the denominator mid-period, distorts the rate. Use the start-of-period base.
- How does churn relate to customer lifetime?
- Average lifetime is approximately 1 divided by the churn rate, in the same time units. A 5% monthly churn implies an average lifetime of about 20 months. This approximation assumes churn stays roughly constant over time.