How to calculate churn rate
Pick a period, usually a month. Count the paying customers you had when it started. Then count how many of those same customers lost paid access before it ended. Divide the second number by the first.
- Start: paying customers on the first day of the period.
- Lost: customers from that start group who stopped paying during the period.
- Churn rate: lost ÷ start, shown as a percentage.
Count churn when paid access ends, not when auto-renew is turned off. Customer churn tells you how many people leave. It does not tell you how much money leaves, because a cancelled annual plan and a cancelled weekly plan count the same. For money, use revenue churn, below.
Worked example
A meditation app starts September with 2,000 paying subscribers. During the month, paid access ends for 120 of them and 300 new people subscribe.
| September | Customers |
|---|---|
| Paying on September 1 | 2,000 |
| Cancelled during September | 120 |
| New during September (not in the formula) | 300 |
| Churn rate: 120 ÷ 2,000 | 6.0% |
The 300 new subscribers raise the customer count to 2,180, but they do not lower churn. Mixing them in would make the month look better than it was.
Churn rate calculator
Enter your own numbers. The calculator also converts monthly churn into annual churn and an average customer lifetime.
Revenue churn
Revenue churn measures lost recurring revenue instead of lost people. It uses monthly recurring revenue (MRR).
If a customer on a $10 plan downgrades to $4, customer churn does not change, but $6 of MRR churns. Track both numbers: customer churn shows whether people stay, and revenue churn shows whether the business keeps its income.
Monthly churn vs annual churn
You cannot multiply monthly churn by 12. Each month, churn applies only to the customers who are still left.
Common mistakes
- Counting new customers in the denominator. Use the start count only.
- Treating trials as customers. A trial that ends without payment is a failed conversion, not churn. Measure it as trial to paid.
- Mixing plan lengths. Annual subscribers can only churn at renewal, so a blended monthly rate hides when losses really happen. Split churn by plan length.
- Counting billing failures as cancellations too early. App stores retry failed payments during a grace period. Count the customer as lost only when access ends.
Churn in subscription apps
In apps, most churn happens at the first renewal. Customer cohorts help here: group subscribers by the month they started, and follow how many are still paying after 1, 2, and 3 renewals. A cohort view shows whether a change to onboarding or pricing kept more people, which a single churn number cannot.
In DataDad, churn, cancellations, and refunds sit next to MRR, split by platform, plan, and campaign. See app revenue.
Questions
What is a good churn rate?
It depends on price, plan length, and category, so compare against your own past months first. A falling trend matters more than any single target.
What is the difference between churn rate and retention rate?
For the same group and period they add up to 100%. If 6% of customers churn, 94% are retained. See retention rate.
Should refunds count as churn?
A refund that ends the subscription is churn. Also track refunds separately, because they remove revenue you already counted.