Churn Rate Calculator

You work hard to bring users in, and then watch some slip out the back door. What’s worse? You don’t even know how many, or why.

If that sounds familiar, you’re not alone. Most SaaS companies underestimate their churn. Others don’t measure it at all.

Yet, churn is one of the most telling SaaS metrics in your entire business. It can point to growth problems, UX issues, and onboarding gaps, sometimes all at once.

So, before we go fix churn, let’s first measure it right here.

Churn rate calculator

This calculator from Eleken makes churn rate calculation simple: just enter your customer numbers, and get your churn rate in seconds.

How to use the churn calculator

Before you punch the numbers in, here’s what you’ll need:

• Starting customer count: how many users you had at the beginning of the time period.
  
  
• Customers lost: how many users left during that time.
  
  
• (Optional) New customers gained. This isn’t part of the churn formula, but it’s good to have context when you're analyzing overall growth.
  
  

Here is an example of how to calculate churn rate:

You began the month with 500 customers, and 25 canceled.
Plug that in, and you get: 

The result is neither terrible nor amazing. But now you know. The tool saves you from doing the math manually.

It’s especially handy for “what-if” scenarios: you can adjust the numbers (e.g., what if we only lost 30 customers instead of 45?) to see how it impacts your churn percentage. This way, you can quickly gauge how improving customer retention moves the needle.

Next, we’ll explain how this little formula works and why it might be the most critical number in your business.

Understanding churn rate

To fix churn, you need to understand what it measures and what it doesn’t. Let’s break it down.

What is the churn rate?

Churn rate is the percentage of customers who stop doing business with you over a given time period. That’s it. How do you calculate churn rate?

The basic formula looks like this:

Let’s say you start the month with 1,000 users and lose 60. Your churn rate is 6%.

This calculator focuses on customer churn (number of users lost), not revenue churn (dollars lost). Both matter, but for different decisions.

Also, churn isn’t the opposite of growth. You can gain and lose users at the same time. Churn shows the leaks, while growth shows the inflow. To grow sustainably, you need both in check, and churn is often the hidden problem.

Why churn rate matters

Churn rate is a pressure point for your entire business model.

Here’s how high churn hits where it hurts:

1. Revenue and profitability

Recurring revenue depends on customers staying. If too many leave, your monthly recurring revenue (MRR) will shrink quickly, as will your path to SaaS profitability.

SaaS businesses need time to recoup what they spend acquiring users. If someone leaves after one month on a $20 plan and your customer acquisition cost (CAC) is $500, you’ve lost money and have not made it.

Retention pays off as well. Bain & Company found that improving customer retention by just 5% can increase profits by anywhere from 25% to 95%. Simply put, retention drives revenue more efficiently than acquisition, every time.

2. CAC and growth efficiency

When customers leave quickly, you’re forced to replace them just to maintain the same revenue. That pushes your CAC SaaS higher because you’re spending to regain lost ground instead of generating true growth.

In this loop, every new customer feels like a short-term fix. You spend more to stand still, which makes scaling expensive, unpredictable, and ultimately unsustainable.

The key is finding balance: reducing what you spend to acquire users while increasing how much value each one brings over time.

As the graph offered by For Interpreneurs shows:

• You lower CAC with strategies like inbound marketing, freemium models, and viral growth.
  
  
• You boost customer lifetime value (LTV) through retention, upselling, and recurring revenue.
  
  
• And you break the model with high churn and low satisfaction.

3. Lifetime value (LTV)

Customer lifetime value drops sharply when churn rises. If customers leave early, they don’t stick around long enough to generate meaningful revenue. That shortens the average customer lifespan and puts your LTV-to-CAC ratio at risk.

That’s the equation you want to optimize.

The chart below shows this relationship in action. As churn rate (red line) rises, LTV (blue bars) drops, and vice versa.

4. Product and brand health

Churn is often a proxy for product-market fit and customer satisfaction. If users keep canceling, they’re telling you something’s wrong, maybe it’s SaaS user onboarding, support, or the product itself.

Ignore churn, and you risk turning real issues into brand damage. At the same time, churn can also show you where things are broken:

• Is onboarding too confusing?
  
  
• Is the support too slow?
  
  
• Is the product missing something your competitors offer?

Want to go deeper into how these signals affect your bottom line? Watch this video:

Let’s take a closer look at what the numbers tell you. 

Analyzing your churn rate

Calculating churn rate gives you the number, but interpreting it in context turns it into a strategy.

The time frame matters as well. 5% monthly churn is a serious problem. 5% annual churn is not.

Also, don’t just look at the percentage. 5% of 10 customers? Not a crisis. 5% of 10,000? You just lost 500 paying users. 

Always consider both the rate and the raw numbers. It’s time to define what “good” really means.

What’s a “good” churn rate?

Here’s how to understand whether your churn is healthy, harmful, or hiding deeper issues:

• Enterprise B2B SaaS: <1% monthly is ideal.
  
  
• Mid-market or SMB SaaS: 2–5% monthly is common, but improvement is key.
  
  
• Early-stage or B2C SaaS: Higher churn is expected, but still needs to trend down.

According to the 2024 Private Company SaaS Survey, the average SaaS churn rate is around 5% annually, but the best aim for 3% or less. That means you’re losing fewer than 3 out of 100 customers per year, a strong signal of product-market fit and customer loyalty.

If your monthly churn is above 5% or annual churn is in the double digits, it’s a clear warning: users are walking away faster than they should. 

To see how small monthly churn rates compound over time, use the chart below:

To find out what’s driving your churn, you need to zoom in. Here’s how to segment your churn and identify the real problem areas.

Segment your churn

Segmenting churn means breaking it down by customer traits or behaviors to uncover where your retention issues lie. 

Most SaaS companies see churn vary widely across segments, and spotting those differences is how you move from guessing to fixing.

Here’s how to make segmentation work for you:

• By customer type or size.

Small businesses often churn faster than enterprise clients. They may outgrow your SaaS product, shut down, or be more price-sensitive.

If you see higher churn among your SMB users, that’s a sign to revisit your onboarding, SaaS pricing model, or support approach for that group.

Take Intercom. Its early growth focused heavily on small startups, and their churn patterns reflected it. Over time, they saw that larger, mid-market teams were far more likely to stick around. 

That insight shaped how Intercom evolved: moving upstream toward enterprise, introducing tailored onboarding flows, and segmenting their offerings by jobs-to-be-done. Their strategy shifted from “one-size-fits-all” to deeply personalized, helping reduce churn by customer size.

• By industry or use case.

If your product serves multiple industries, churn may spike in one while staying low in another. Maybe agencies love your tool, but healthcare teams drop off due to missing compliance features. This insight could influence your roadmap or your marketing focus. 

Let’s look at Intercom again. The company realized early on that customers were hiring their product for very different jobs, from support to onboarding to lead conversion. 

Instead of targeting by persona or industry, they shifted to a job-based marketing strategy. They unbundled Intercom into standalone products, each focused on a specific use case, and created tailored messaging guides for each one. That move helped reduce churn by aligning product value with customer intent more precisely.

• By pricing model or subscription type.

Churn tends to be higher for monthly plans than annual ones. Free trials and freemium users churn even more, especially if activation is weak. If churn is concentrated in one pricing tier, it might mean those users aren’t getting enough value or belong on a different plan entirely.

The chart below shows how famous SaaS companies align their pricing strategies based on account value and sales complexity:

• Notion and Canva succeed with low-value, self-serve models but rely on scale and sticky user experiences to minimize churn.
  
  
• Stripe and AWS offer high-value accounts via self-serve, but focus heavily on developer activation and usage-based pricing.
  
  
• Salesforce and HubSpot operate in high-value, high-touch models, with lower churn, but onboarding and long-term support are critical.

• By acquisition channel or cohort.

Not all customers enter through the same door; some exits are faster than others. Users from discount campaigns might churn more than those from organic search.

A cohort analysis (grouping users by signup date) shows how churn changes over time. If newer cohorts are churning faster, something in your funnel, product, or audience targeting may be off.

• By customer tenure.

Early-stage churn (in the first 30–90 days) usually points to onboarding issues or misaligned expectations. Later churn (after 12+ months) may reflect shifting needs or competitor pressure. 

Use your SaaS dashboard to filter churn by segment and track patterns. From there, you can build targeted retention strategies instead of throwing generic solutions at the wall.

For example, our client, myInterview, came to us with a 90% candidate drop-off rate mid-interview. We found confusing input flows and broken UI patterns. 

After redesigning key components such as clearer checkboxes, better feedback, and smoother flow, churn dropped significantly.

When you know when users leave, you can fix why they leave.

The cost of high churn

Companies with low churn build momentum. They keep more customers every month and layer growth on top. Companies with high churn? They’re constantly replacing what they just lost. Every new signup just fills a gap.

Here’s a rough guide (for SaaS, B2B-focused):

Spot patterns and trends

Once you’ve segmented your churn, zoom out and look for trends over time:

• Is churn spiking after product changes?
• Does it peak in certain seasons?
• Are customers dropping off right after onboarding?

Also, combining segments with time-based analysis reveals what’s driving churn and when. We recommend:

• Track the overall trend.

You should determine whether your churn rate is going up, down, or steady. A downward trend means your retention efforts are working. 

An upward one signals a deeper problem, possibly in product, support, or customer fit. Plot it. Visualize it. Even a basic line chart can highlight warning signs early.

• Identify seasonality.

Some SaaS companies see a churn spike in Q4 when budgets tighten, or in Q1 when teams do tool audits. 

B2C apps might see dips in summer or holidays when habits shift. Spotting seasonal churn helps you plan retention campaigns before the drop-off hits.

• Watch for post-onboarding drop-off.

If 30% of users churn in the first 60 days, but those who stick past month three stay for a year, you don’t have a churn problem; you have an onboarding problem.

Again, cohort analysis can show how retention changes over time for different signup groups and highlight whether your activation efforts are working.

• Look for behavioral churn triggers.

Declines in product usage often come before cancellation. Fewer logins, skipping key features, or not engaging with support can all signal risk.

Set up alerts in your CRM, such as “Customer hasn’t logged in for 30 days = at risk.”

These early signals give your SaaS customer success team time to act before it’s too late.

For example, Slack found that teams that send 2,000+ messages are 93% more likely to stick. That became their activation benchmark. 

Now that you’ve got clues and know how to calculate churn, it’s time to build a plan.

Strategies to reduce churn

Cutting churn, even slightly, protects your revenue and fuels long-term growth. Here’s how to do it.

Start with customer experience

Churn often starts with unmet expectations. Your first line of defense is a strong customer experience, from onboarding through support.

Get users to value fast. For example, HubSpot assigns onboarding consultants to guide new users from day one. 

Even without that scale, you can deliver results with in-app walkthroughs, helpful emails, webinars, or quick setup calls. Whatever it takes to get users to their first “aha moment.”

And don’t wait for complaints. Missed logins and stalled activity are your early warning signs. Set up alerts, and then act. 

Tools like Intercom and Zendesk can help automate this, but a personal check-in from your team builds trust and keeps customers around.

Fix the product 

Sometimes churn is a product problem in disguise. To avoid that, you can:

• Act on real feedback.

Don’t just collect exit surveys; read them. Churned customers will tell you what didn’t work: missing features, bad UX, slow support. Use that intel to guide your roadmap. If five users say your reporting is weak, fix it.

• Stay competitive.

If your competitor launches a better plan or simplifies their UI, customers notice. You don’t have to match every move, but you need to understand your users well enough to stay relevant.

• Fix the basics.

Downtime, bugs, and clunky UX quietly drive users away. You won’t always hear about it. You’ll just see the churn. Fast support and a stable app will outperform a shiny roadmap any day.

Take our client DataLexing. Their interface was too technical for non-expert users, leading to frustration and early abandonment. 

We redesigned the experience to be more intuitive: a visual dashboard replaced a confusing file list, navigation became simpler, and onboarding was tailored to user behavior. Even notification overload was addressed. 

As a result of our work, the platform’s UX was redesigned to be intuitive for all user types, enabling even non-technical users to navigate and gain value from the product.

Predict churn before it happens

You don’t need AI to get ahead of churn. You just need to spot the signs:

• Use a churn prediction model.

Track indicators like login frequency, feature usage, and ticket volume. When a user’s engagement drops, flag them. That’s your early warning.

• Build health scores.

You can use tools like HubSpot to measure Customer Happiness based on product usage, support history, and NPS responses. If your score is low, reach out, offer help, and re-engage with something valuable.

• Automate your outreach.

Set up simple flows:
– No login in 14 days? Trigger a helpful email.
– Abandoned setup? Drop an in-app nudge.
– No usage of a sticky feature? Recommend it.

It doesn’t have to be sophisticated, just timely. Let’s take a look at Habstash, a home savings app we worked with. To reduce signup drop-off, we added a “save and exit” option so users could pick up where they left off. 

We also designed email templates that reminded users to complete registration, highlighted key updates, and nudged them to check their progress. It’s a small automation step that helped recover stalled onboarding and re-engage users, precisely the move that lowers early churn without heavy lifting.

Now let’s wrap this up with some final thoughts and next steps.

Wrapping up

You started this post looking for a churn rate calculator. Hopefully, you found something better: a way to understand what that number means and what to do about it.

To recap:

• Churn rate is simple to calculate, but powerful when tracked consistently.
  
  
• It’s not just a SaaS metric. It reflects where your product, UX, or support might be failing.
  
  
• Segmenting churn, analyzing trends, and acting on feedback can make the difference between a leaky product and a loyal user base.
  
  
• And remember: churn reduction is survival. Retention is growth.

We at Eleken recommend using the churn rate calculator periodically, for example, calculate your churn monthly and annually. Track it and share it with your team; make churn a visible metric in your SaaS dashboard so everyone is aware of it. 

Need help building retention into your product? We’ve helped dozens of teams do exactly that. Let’s talk.