Churn Revenue Impact Calculator
Example: Current monthly recurring revenue: 20000 $ · Monthly churn rate: 5 %
| Revenue lost per month | $1,000 |
| Revenue lost per year | $12,000 |
| Equivalent annual churn | 45.96% |
Worked example
At $20,000 MRR and 5% monthly churn, you lose $1,000 of recurring revenue every month, about $12,000 over a year at the current base. More striking, a 5% monthly churn compounds to roughly a 46% annual churn, meaning nearly half your customer base would leave in a year if unchecked. That is the number that turns retention from a nice-to-have into a priority.
Frequently asked questions
Why is annual churn higher than 12 times monthly churn?
Because churn compounds. Each month a percentage of the remaining customers leave, so the annual figure is one minus the survival rate raised to the twelfth power, not a simple multiplication. A 5% monthly churn is about 46% annually, not 60%.
What is a healthy churn rate?
It varies by market. Consumer subscriptions often tolerate higher churn than business software, where monthly churn under 1 to 2% is considered strong. Compare to peers in your segment rather than an absolute number.
Does this include expansion revenue?
No. This tool measures gross revenue lost to churn. If existing customers upgrade, that expansion can offset churn, and your net revenue retention may still be positive even with meaningful gross churn.
How do I reduce churn?
Improve onboarding, fix the reasons customers leave, add value that grows over time, and catch at-risk accounts early. Because churn compounds, even a one-point monthly improvement pays off substantially over a year.