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Customer Churn

Metrics beginner FOUNDERCFO

What is Customer Churn?

Customer Churn measures the percentage of customer accounts lost over a given period.

Also known as: Churn, Churn Rate, Existing Customer Churn, Monthly Account Churn

Customer Churn Formula

Monthly Customer Churn = Customers Lost During Month / Customers at Start of Month
Variable Meaning
Customers Lost During Month Accounts that cancelled during the month.
Customers at Start of Month Active customer accounts at the start of the month.
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How to Calculate Customer Churn

Worked example

Monthly customer churn
2%
→ Average customer lifespan (months)
50
→ Annualized churn
21.5%

Customer Churn Calculator

Try it with your numbers

Average customer lifespan (months)50
Annualized churn21.5%
Monthly Customer Churn = Customers Lost During Month / Customers at Start of Month
Variable Meaning
Customers Lost During Month Accounts that cancelled during the month.
Customers at Start of Month Active customer accounts at the start of the month.

Worked example

Monthly customer churn
2%
→ Average customer lifespan (months)
50
→ Annualized churn
21.5%

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Prefer a dedicated page? Use the Customer Churn calculator.

Customer Churn Benchmarks

Segment Level Benchmark
general average 2 % per month
general target 0–3 % per month

Common Mistakes with Customer Churn

  • Hitting a churn plateau at $5M-$10M ARR because the team does not know its unit economics (CAC, LTV, ARPA, ACV, churn, payback months).

Customer Churn vs Related Metrics

Customer Churn FAQ

How do you calculate Customer Churn?

Divide customers lost during the month by customers at the start of the month. For example, if 2% of accounts cancel each month, the average customer lifespan is 1 / 0.02 = 50 months.

More questions? See the full Customer Churn FAQ.

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