What’s your churn rate?
Monthly churn, how long customers stay, and what each one is worth.
Monthly churn
5.0%
At this rate you’d lose about 46% of today’s customers within a year, so that many new ones are needed just to stand still.
Revenue churn
4.0%
A customer stays about
20 months
And is worth
£600
Left after a year, with no new customers
108 of 200
How do I calculate churn rate?
Divide the customers who cancelled in a month by the customers you had at the start of it. 10 cancellations from 200 customers is 5% monthly churn.
What is a good churn rate for SaaS?
Lower is better, and small differences compound. At 3% a month, the average customer stays about 33 months. At 7%, it's about 14, and more than half your customers are gone within a year unless you replace them.
How do I work out customer lifetime value?
Divide 1 by your monthly churn to get the average months a customer stays, then multiply by what a customer pays a month. At 5% churn a customer stays about 20 months; at £30 a month they're worth about £600.
See your real churn, and who’s about to leave.
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