Churn rate calculator
Churn is the share of subscribers who cancel each month. Enter subscribers at the start of a month and how many cancelled, then drag the retention curve to see how long a subscriber stays and what each one is worth. Or paste monthly history for your average churn.
Churn is the share of subscribers who cancel each month. Enter one month to see how long a subscriber stays and what each one is worth, then drag the curve to see what lower churn would earn.
- Monthly churnCancelled ÷ subscribers at the start. Yearly churn compounds, so it's less than 12 times the monthly rate.
6.00%
52.4% a year, not 72%- Average lifetime
- 16.7 monthshalf have left by month 11.2
- Lifetime value (gross profit)What the average subscriber earns you before they cancel: monthly gross profit ÷ monthly churn. The discounted figure counts later months for less.
- $350$311 discounted at 10% a year
- One point less churn
- +$70per subscriber, at 5.0% a month
Showing the worked example: 120 of 2,000 subscribers cancelled, at $35 a month and a 60% margin. Drag the curve or type your own.
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How to read your number
Churn rate is the share of subscribers who cancel in a period. 120 cancellations out of 2,000 subscribers is 6% a month. At that pace a subscriber stays about 16.7 months on average, fewer than half are left after a year, and at $35 a month with a 60% margin each one is worth $350 in gross profit.
Why it matters
Churn sets the ceiling on a subscription. Every point of monthly churn you remove lengthens the average lifetime, and lifetime value rises with it: cutting churn from 6% to 5% lifts LTV by a fifth without a single new subscriber. It's also the number that decides how much you can spend to win a subscriber in the first place.
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Formula
Churn rate = subscribers who cancelled in the period ÷ subscribers at the start of the period
Count only subscribers who were active at the start, so new sign-ups during the month don't dilute the rate. Expected lifetime is 1 ÷ monthly churn, and simple lifetime value is monthly gross profit per subscriber ÷ monthly churn.
Other ways to calculate churn rate
- Simple LTV
- LTV = monthly revenue per subscriber × gross margin ÷ monthly churn
- The everyday version. $35 × 60% ÷ 6% = $350.
- Discounted LTV
- LTV = monthly profit × (1 + i) ÷ (i + churn), with i the monthly discount rate
- When you want future months to count for less than today's, as investors do. At a 10% yearly rate, the example's $350 becomes about $311.
- Churn with sign-ups in the month
- Churn = cancellations ÷ ((start + end) ÷ 2)
- When you add many subscribers mid-month and want a rate against the average base. It reads lower than the start-of-month version, so don't mix the two.
- Monthly to yearly
- Yearly churn = 1 − (1 − monthly churn)¹²
- To compare with a yearly figure. 6% a month is 52.4% a year, not 72%, because each month's churn applies to fewer subscribers.
- Revenue churn
- Revenue churn = recurring revenue lost to cancellations and downgrades ÷ recurring revenue at the start
- When subscribers pay different amounts, so losing a large plan hurts more than a small one.
How to calculate churn rate: a worked example
A coffee subscription has 2,000 subscribers on the first of the month, and 120 cancel by the end of it. A subscription is $35 a month at a 60% gross margin.
- Churn = 120 ÷ 2,000 = 6% a month
- Expected lifetime = 1 ÷ 0.06 = 16.7 months
- Still subscribed after a year = 0.94¹² = 47.6%, about 952 of the 2,000
- Monthly gross profit = $35 × 60% = $21; LTV = $21 ÷ 0.06 = $350
- Discounted at 10% a year: $21 × 1.008 ÷ (0.008 + 0.06) = $311
Each subscriber is worth about $350 in gross profit, or $311 discounted. Paying more than that to win one loses money; aim to spend well under it.
What's a good churn rate?
Judge it by what it does to lifetime value against what a subscriber costs to win. If LTV is at least three times your customer acquisition cost, churn is low enough to grow on; check it with the LTV to CAC ratio calculator.
Look at churn by cohort, not just the total. A store growing fast can show low overall churn while new subscribers leave after their first box or two, because the large base of loyal subscribers hides them. If the early months churn most, fix those first: the first delivery, a skip or pause option instead of cancel, and a clear reason to stay.
| Monthly churn | Still active after a year | Yearly churn | Average lifetime | Months until half leave |
|---|---|---|---|---|
| 1% | 88.6% | 11.4% | 100.0 months | 69.0 |
| 2% | 78.5% | 21.5% | 50.0 months | 34.3 |
| 3% | 69.4% | 30.6% | 33.3 months | 22.8 |
| 5% | 54.0% | 46.0% | 20.0 months | 13.5 |
| 7% | 41.9% | 58.1% | 14.3 months | 9.6 |
| 10% | 28.2% | 71.8% | 10.0 months | 6.6 |
| 15% | 14.2% | 85.8% | 6.7 months | 4.3 |
Questions about churn rate
- What is churn rate?
- Churn rate is the share of subscribers or customers who cancel in a period, usually a month. If 120 of 2,000 subscribers cancel this month, monthly churn is 6%. Lower churn means subscribers stay longer and each one is worth more.
- How do you calculate churn rate?
- Divide the subscribers who cancelled during a period by the subscribers you had at its start. 120 cancellations from 2,000 subscribers is 6% monthly churn. Leave out people who signed up during the month, or the rate looks lower than it is.
- How do you calculate LTV from churn rate?
- LTV = monthly gross profit per subscriber ÷ monthly churn. At $21 of gross profit a month and 6% churn, LTV is $21 ÷ 0.06 = $350. That works because 1 ÷ churn is the expected lifetime: 16.7 months at 6%.
- How do you convert monthly churn to annual churn?
- Annual churn = 1 − (1 − monthly churn)¹². At 5% a month that's 1 − 0.95¹² = 46%. Multiplying by 12 overstates it, because each month's churn applies to a smaller group.
- What is the difference between churn rate and retention rate?
- They add up to 100% for the same period. 6% monthly churn is 94% monthly retention. Retention over longer periods compounds: 94% a month leaves 47.6% after a year.
- What's the difference between simple and discounted LTV?
- Simple LTV adds every future month's profit at face value. Discounted LTV counts later months for less, using a yearly rate such as 10%, so it's lower and closer to what a subscriber is worth today. Use simple LTV to compare products and discounted LTV for budgets.
Sources
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