MRR Lab

Annual to Monthly Churn Rate Calculator

Convert your annual churn rate to monthly churn rate and visualize the impact on your customer base over time.

Annual Churn Rate
20.0%
Retention: 80.0%
Monthly Churn Rate
1.84%
Retention: 98.16%
Initial Customers
1,000
After 12 months: 800

This calculator helps you convert your annual churn rate into its monthly equivalent and visualize how it affects your customer base over time.

The visualisation shows the number of customers who remain from the start of the year. It does not account for new customers.

How It Works

  1. Enter your annual churn rate as a percentage
  2. Optionally, enter your current number of customers
  3. The calculator will:
    • Convert the annual rate to a monthly rate
    • Show how your customer base changes month by month
    • Display key metrics and benchmarks

Understanding the Results

The calculator uses the following formula to convert annual churn to monthly churn:

Monthly Churn Rate = (1 - (1 - Annual Churn Rate)^(1/12)) × 100

For example:

  • If your annual churn rate is 20%
  • Your monthly churn rate would be approximately 1.84%

The number of customers churned each month depends on how many customers there are at the start of the month. So monthly churn rate cannot be calculated by dividing annual churn rate by 12.

Common Use Cases

  1. Strategic Planning: Convert annual targets to monthly goals
  2. Performance Monitoring: Track monthly progress against annual targets
  3. Customer Success: Set monthly retention targets
  4. Financial Modeling: Project customer base changes
  5. Segment Performance: Compare churn rates between annual and monthly plans

Limitations

  • Assumes consistent churn rate across months
  • Does not account for:
    • Seasonal variations
    • Customer cohort differences
    • Customer lifetime value
    • New customer acquisition

Tips for Improvement

  1. Segment Your Analysis:

    • Calculate separate rates for different customer segments
    • Consider customer age and value tiers

  2. Monitor Trends:

    • Track monthly variations
    • Look for seasonal patterns
    • Identify improvement opportunities

  3. Take Action:

    • Focus on customer success during early months
    • Implement proactive retention strategies
    • Address churn causes quickly

Related Metrics

Core Metrics

Growth Metrics