Churn Rate Calculator

Take the customers you lost during a period and divide by how many you had at the start. Multiply by 100. If you started the month with 500 customers and lost 15, that's 3.0%. The denominator matters: use beginning-of-period count, not an average. Teams that use average customer count will get a slightly different number than what investors expect to see. For MRR churn, the same logic applies with revenue figures instead of customer counts.

Customer churn measures the percentage of customers (logos) you lost. MRR churn measures the percentage of recurring revenue you lost. They diverge whenever customers differ in size. A company losing only small accounts can have 5% customer churn but only 2% MRR churn rate. When customer churn is low but MRR churn is high, that's a red flag: a few large accounts left. MRR churn is the more important number for revenue health, because it's what shows up in your GRR and NRR.

The compound formula is Annual Churn = 1 - (1 - Monthly Rate)^12. Most teams skip this and multiply by 12 instead, which overstates the number because it ignores the fact that each month you're churning from a smaller base. At 2% monthly, the simple method gives you 24%. The compound formula gives you 21.5%. That gap sounds manageable until it shows up in a board deck or an acquirer's model, where annualized churn is usually one of the first figures that gets stress-tested.

It depends on your segment and how you measure it. For enterprise SaaS, 5% monthly is a critical signal. It compounds to 46% annually, meaning you're losing nearly half your customer base each year. For SMB or product-led growth models, 5% monthly sits at the high end of acceptable. The more useful benchmark is your net revenue retention: if NRR is above 100%, expansion is offsetting losses even at elevated churn rates.

Usually one of three things, and they require different fixes. The first is ICP mismatch: customers who were sold to before they were ready, or for a use case the product doesn't actually serve well. The second is onboarding failure, where customers activate but never get to a first real outcome. The third is a product gap in a specific segment or workflow. The way to tell them apart: if churn is spread evenly across cohorts, you're likely looking at a product or pricing problem. If it clusters in one segment or acquisition channel, it's more addressable.

Rough benchmarks: below 1% monthly for mid-market SaaS (around 11% annually), below 2% for SMB-focused models. But investors at Series B are usually more focused on NRR than raw churn. Top-quartile companies at that stage show NRR above 110%, which means expansion is covering losses and then some. If NRR is below 90%, that's a harder conversation regardless of how fast revenue is growing, because the retention story undermines the growth story.

Churn rate tracks whether customers left. GRR tracks whether revenue stayed, and those are different questions. GRR includes contraction, meaning customers who renewed at a lower amount drag it down even if they didn't churn. A company with 3% customer churn could have 88% GRR if a meaningful portion of renewing customers downsized. GRR can never exceed 100%. In investor reporting, it's often the more scrutinized number because it captures the full picture of revenue erosion, not just the logos that walked.

DualEntry tracks MRR movements (expansions, contractions, and churn) directly in your general ledger, not in a CS tool or spreadsheet. Churn rate, GRR, and NRR are live metrics calculated on recognized revenue under ASC 606. Because contraction MRR is correctly classified separately from churn MRR at the accounting layer, your reported churn and GRR reflect actual revenue movements, not approximations that get rebuilt from scratch during investor due diligence.