1. What is Churn Rate?

Churn Rate is the percentage of customers who stop using your product or service during a given time period. It's a key metric for understanding customer retention and business health.

2. How Does the Calculator Work?

The calculator uses the Churn Rate formula:

Where:

• Customers Lost — Number of customers who left during the period
• Customers at Beginning — Total customers at the start of the period

Explanation: The formula calculates what percentage of your original customer base you've lost during the measured time period.

3. Importance of Churn Rate

Details: Churn Rate is critical for assessing customer satisfaction, product-market fit, and business sustainability. High churn indicates problems with your product or service, while low churn suggests strong customer loyalty.

4. Using the Calculator

Tips: Enter the number of customers lost during the period and the number of customers at the beginning of the period. Both values must be positive numbers, and the beginning customers must be greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What's a good churn rate?
A: It varies by industry, but generally under 5-7% monthly is good for SaaS businesses. For annual churn, under 10% is typically good.

Q2: How often should I measure churn?
A: Monthly is common, but the frequency depends on your business cycle. High-volume businesses might track weekly.

Q3: What's the difference between gross and net churn?
A: Gross churn counts only lost customers. Net churn accounts for both lost customers and revenue from new/retained customers.

Q4: Should I include free users in churn calculations?
A: Typically no - churn rate is most meaningful for paying customers. However, free user churn can predict future paid user churn.

Q5: How can I reduce my churn rate?
A: Improve onboarding, customer support, product quality, and regularly engage with customers to understand their needs.