Churn Rate
The percentage of customers or revenue lost over a given period, typically measured monthly.
Why it matters
Churn is the silent killer of SaaS businesses. Even small improvements in churn compound dramatically over time. A 5% monthly churn means losing over half your customers annually.
Formula
Divide the number of customers who cancelled during the period by the total number of customers at the start of that period. Multiply by 100 for a percentage.
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What's a good Churn Rate?
Best-in-class SaaS: <2% monthly. Acceptable: 3-5% monthly. Concerning: >5% monthly.
Related metrics
CLV
SaaSThe total revenue a business can expect from a single customer account over the entire duration of their relationship.
CRR
E-commerceThe percentage of customers who continue to buy from you over a given period.
MRR
SaaSThe predictable revenue a business expects to earn every month from active subscriptions.