How do you calculate churn rate?

Customer churn rate = (customers lost during the period ÷ customers at the start of the period) × 100. If you began the month with 1,000 customers and lost 50, monthly churn is 5%. Revenue churn uses lost recurring revenue instead of customer counts.

What is the difference between churn and retention?

They are two sides of one coin: churn rate = 100% − retention rate. Keep 92% of customers in a month and your monthly churn is 8%. Tracking both is redundant; pick the framing your team reasons about more naturally.

What is the difference between customer churn and revenue churn?

Customer churn counts accounts lost; revenue churn counts the recurring revenue lost. They differ when customers are not equal in value — losing a few large accounts can mean low customer churn but high revenue churn. Net revenue churn also subtracts expansion from existing customers.

What Is Churn Rate? Definition, Formula & Benchmarks

Q: What is a good churn rate?

It depends heavily on model and segment — there is no universal number. Lower is always better, and small differences compound: average customer lifetime is roughly 1 ÷ churn rate, so 5% monthly churn implies about a 20-month lifetime. See our retention benchmarks for ranges by business type.

Churn rate is the percentage of customers (or users, or revenue) you lose over a given period. It is the inverse of retention: if you keep 92% of customers in a month, your monthly churn is 8%.

The formula

The basic customer churn rate is the share of customers you had at the start of a period who were gone by the end:

churn rate = customers lost ÷ customers at start × 100

Start the month with 1,000 customers, lose 50, and monthly churn is 5%. Revenue churn swaps customer counts for recurring revenue, which matters when customers aren’t equal in value — and net revenue churn subtracts expansion from your remaining customers, so a strong product can post negative net churn.

Churn and retention are the same coin

Churn rate = 100% − retention rate. They describe the same thing from opposite ends, so you only need to track one. Teams that obsess over acquisition while ignoring churn are filling a leaky bucket: every percentage point of churn is customers you have to re-acquire just to stand still.

Why small differences compound

Average customer lifetime is roughly 1 ÷ churn rate over the same period. 5% monthly churn implies an average lifetime near 20 months; 3% implies about 33. A couple of points of churn, reduced and held, can outvalue a large lift in top-of-funnel traffic — because retained customers cost nothing to win back and keep compounding revenue.

How to measure it well

A single headline number hides the story. Cohort analysis — grouping customers by when they joined and tracking what fraction stay — shows when people churn (often a steep early drop, then a flattening curve) and whether recent cohorts churn less than older ones. That’s where to look before you try to fix it.

What counts as good

There’s no universal target — acceptable churn varies widely by business model, price point, and segment. Lower is always better, and the benchmark that matters most is your own trend over time. For ranges by business type and how to read a retention curve, see what a good retention rate is.

Try it: churn → retention → lifetime

Churn compounds. Nudge the monthly churn rate and watch retention and the implied average lifetime move.

Calculate and track it in Pug

Use the free retention & churn calculator to turn customer counts into churn and implied lifetime, and the cohort retention visualizer to see the curve. In Pug, retention cohorts are built in — group by signup week and watch the return rate by week, filtered by any profile trait.

Churn rate