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Churn is the silent killer of SaaS businesses. Even a "modest" 5% monthly churn means you lose more than half your customer base in a year. This calculator makes the compounding math visible: given your current MRR and churn rate, it projects your MRR at 3, 6, and 12 months — and shows how much a 1-percentage-point improvement in churn is worth in preserved MRR.
Why churn compounds so aggressively
At 10% monthly churn, after 12 months only 28% of your original subscribers remain
(1 - 0.10)^12 ≈ 0.28. At 2% monthly churn, 79% remain. That 8-point difference in
monthly churn translates to a 51-point difference in annual retention — a massive gap
in the economic value of the business.
Gross churn vs. net churn
Gross revenue churn counts cancellations and downgrades only. Net revenue churn subtracts expansion revenue (upgrades) from gross churn. A business with 5% gross churn and 8% expansion has −3% net churn, meaning the existing customer base is growing on its own. This is negative churn — the goal.
How to use the churn impact calculator
- Enter your current MRR and monthly gross churn rate.
- Optionally enter a new MRR growth rate (new customer acquisition).
- See MRR projected for months 3, 6, and 12.
- See the dollar value of reducing churn by 1%.
Frequently asked questions
What's an acceptable monthly churn rate? For SMB/prosumer SaaS: under 3% monthly (≈31% annually) is typical. For mid-market: under 1% monthly (≈11% annually). For enterprise: under 0.5% monthly. If you're above these benchmarks, churn reduction should be the top priority.
Can negative churn actually happen? Yes. If expansion revenue from existing customers exceeds cancellation revenue, your net churn is negative — the cohort grows even without new customers. This is the holy grail of SaaS and dramatically increases LTV and valuation multiples.