How to Use the Churn Cost
A "small" monthly churn rate compounds into a surprisingly large annual customer loss — 5% monthly churn means losing nearly half your customer base over a year if unaddressed. This calculator translates your churn rate into real dollars lost, and shows exactly how much revenue you'd protect by hitting a lower target churn rate.
Step-by-Step Guide
- 1
Enter your total subscriber count.
- 2
Enter your monthly churn rate %.
- 3
Enter your average revenue per user (ARPU) per month.
- 4
Set a target churn rate you're aiming to achieve.
- 5
Review lost MRR/ARR at your current rate, and how much you'd save by hitting your target.
Churn Cost Formula
Customers Lost / Month = Total Subscribers × Monthly Churn % Lost MRR = Customers Lost × ARPU Annualized Churn Rate = 1 − (1 − Monthly Churn)^12
Worked Example
Subscribers: 1,000. Monthly churn: 5%. ARPU: $60. Target churn: 3%. Customers Lost/Month = 1,000 × 5% = 50 Lost MRR = 50 × $60 = $3,000/month → $36,000/year Annualized Churn Rate = 1 − (0.95)^12 ≈ 46% At 3% target churn: Customers Lost = 30, Lost MRR = $1,800 → MRR Saved = $1,200/month ($14,400/year)
Understanding your result
Calculator results depend entirely on the information entered. For the most useful estimate, use current and accurate figures and include all costs that apply to your specific situation.
Frequently Asked Questions
What is a good SaaS churn rate?
For SMB-focused SaaS, monthly churn of 3–5% (annualized ~30–45%) is common. Enterprise SaaS typically sees much lower churn, often under 1% monthly (annualized under 10%), due to longer contracts and higher switching costs.
Why is annualized churn much higher than monthly churn?
Churn compounds — losing 5% of remaining customers every single month, month after month, results in a much larger cumulative loss over a full year than simply multiplying 5% × 12, because the base shrinks each month.
What's the difference between customer churn and revenue churn?
Customer churn counts the number of customers lost; revenue churn (or MRR churn) accounts for the dollar value lost, which can differ significantly if the customers who churn have above- or below-average revenue.
How much is reducing churn worth?
Often more than acquiring new customers of the same value, since reducing churn compounds: every retained customer keeps contributing revenue in every future month, not just the current one.
What causes high SaaS churn?
Common causes include poor onboarding, weak product-market fit for a segment, insufficient customer success engagement, pricing misalignment, and competitive pressure. Exit surveys and cohort analysis help pinpoint the specific driver.