Calculate the true cost of your churn
See how much revenue you're losing every month—and how much you could save by improving retention.
Drag to see how much you could save.
How is churn rate calculated?
Churn rate is the percentage of customers (or revenue) that cancel their subscription within a given period. It is one of the most critical metrics for SaaS businesses because it directly impacts your ability to grow.
The formula is simple:
For example, if you start the month with 100 customers and lose 5, your churn rate is 5%. While 5% might sound low, it compounds over time, significantly stunting your growth.
Why LTV is the metric that matters
Customer Lifetime Value (LTV) tells you how much revenue you can expect from a single customer over their entire relationship with you. It helps you determine how much you can afford to spend on acquiring new customers (CAC).
High churn kills LTV. As you can see in the calculator above, even a small improvement in retention can dramatically increase your LTV, allowing you to grow faster and more profitably.
3 strategies to reduce churn
- Identify at-risk customers early: Don't wait for the cancellation email. Use tools like FirstDistro to monitor customer health scores and spot declining usage patterns weeks in advance.
- Drive adoption during onboarding: Most churn happens because customers never saw value in the first place. Ensure your new users reach their "aha!" moment quickly.
- Engage proactively: Reach out to customers who haven't logged in recently. A simple check-in can re-engage a user who was drifting away.