1. What is Customer Churn?

Customer 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:

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

Explanation: The formula calculates what percentage of your total customer base you've lost during a specific time period.

3. Importance of Churn Rate

Details: Churn rate helps businesses understand customer satisfaction, predict revenue changes, and evaluate the effectiveness of retention strategies. Lower churn rates typically indicate better customer satisfaction and product-market fit.

4. Using the Calculator

Tips: Enter the number of customers lost during the period and the total number of customers at the start of the period. Both values must be positive numbers, and total customers cannot be 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 contracts, under 10% yearly is typically good.

Q2: How often should I calculate churn?
A: Monthly calculation is common, but you might track weekly for high-volume businesses or quarterly for annual contract businesses.

Q3: What's the difference between gross and net churn?
A: Gross churn only counts lost customers, while net churn accounts for both lost customers and new/renewed customers.

Q4: Should I track revenue churn or customer churn?
A: Both are valuable - customer churn shows retention, while revenue churn shows financial impact (as some customers may be more valuable than others).

Q5: How can I reduce churn?
A: Improve onboarding, address pain points, provide excellent support, offer incentives for loyalty, and regularly engage with customers.