What to enter
Enter your customer churn rate: the share of customers you had at the start of a period who were gone by its end. Use the number your billing tool or dashboard shows.
Then pick the period that rate covers. Check your report first. If you enter a quarterly rate as monthly, every result comes out far too high.
How to read the result
5% monthly churn
Example
Annualized churn is 45.96%, so 54.04% of customers are still with you after a year. Quarterly churn is 14.26%. Out of 100 customers, about 46 leave in a year and about 54 stay. Average lifetime is 20 months.
- Wrong shortcut
- What you'd get by just multiplying or dividing, such as 5% × 12 = 60%. It's there to compare, not to use.
- About 46
- The model's expected count. A real group of 100 can lose a few more or fewer.
- Average lifetime
- How long a customer stays on average, in the period you entered. It's a rough model estimate, not your customers' real tenure.
How do you convert monthly churn to annual churn?
Multiply the share of customers who stay each month by itself 12 times, then subtract from 1.
Annual churn from monthly churn
Formula
Annual churn = 1 - (1 - monthly churn)^12
Other periods work the same way: the power 4 takes quarterly to yearly, and 3 takes monthly to quarterly. Going back uses a root, such as the 12th root for yearly to monthly.
This assumes the same share of the customers you still have leaves every period. ChartMogul's churn report uses the same rule: 5% a month is about 46% a year.
Why not multiply monthly churn by 12?
Because each month you lose a share of a shrinking group. Start with 100 customers at 5% a month. You lose 5 in month one, 4.75 of the 95 left in month two, and 4.51 of the 90.25 left in month three. After 12 months about 46 are gone, not 60.
Multiplying always overstates yearly churn, more so as churn rises. At 10% a month, × 12 says 120%, more customers than you had. Dividing goes wrong the other way: 20% a year ÷ 12 is 1.67% a month, but the real monthly equivalent is 1.84%.
Monthly to annual churn table
| Monthly churn | Annual churn | Monthly × 12 |
|---|---|---|
| 1% | 11.36% | 12% |
| 2% | 21.53% | 24% |
| 3% | 30.62% | 36% |
| 5% | 45.96% | 60% |
| 7% | 58.14% | 84% |
| 10% | 71.76% | 120% |
| 15% | 85.78% | 180% |
Annual figures assume the monthly rate holds all year.
Is annualized churn the same as your real annual churn?
No. Annualized churn is what a steady monthly rate adds up to over a year. Real losses differ: new customers often leave faster than older ones, and churn moves with season, plan, and customer mix.
If you tracked one group of customers for a full year, or have renewal results, trust those more. ChartMogul's cohort analysis shows how retention changes as customers age.
Yearly plans are the clearest case. Those customers usually decide once, when the plan renews. If 20% don't renew, the monthly equivalent is 1.84%, but that doesn't mean 1.84% can cancel each month. ChartMogul on billing cycles explains why. The annual plan discount calculator compares the two plans with a separate renewal rate for yearly customers.
How long does an average customer stay?
Divide 1 by your churn rate, in the period you entered. At 5% monthly churn it's 20 months. At 20% annual churn it's 5 years.
It's a rough estimate from the same steady-rate model, not real tenure, and there's no answer at 0% churn. The customer lifetime value calculator uses it to estimate what a customer is worth. The MRR goal calculator uses monthly churn to show how many customers you can keep. Both need churn for the right period, which this tool gives you.
Can you convert revenue churn or negative churn?
Not here. This tool counts customers. Revenue churn counts revenue lost when customers cancel or move to a cheaper plan, so one big customer counts for more than a small one.
Net revenue churn also subtracts revenue from upgrades, so it can drop below 0%. That means revenue from existing customers grew, not that customers came back, so it has no customer lifetime or "out of 100 customers" view. Stripe's revenue churn guide explains both. For revenue, use the revenue churn calculator or the net revenue retention calculator.
How do you compare your churn with a benchmark?
Convert to the same period first, and check that the benchmark counts customers, not revenue. A 4% monthly rate and a 5% to 7% yearly benchmark can look close, but 4% a month is about 39% a year.
This tool doesn't rate churn as good or bad. Published ranges change with price, contract length, and customer type, so compare with your own past numbers first.