MRR Lab

Monthly to Annual Churn Rate Calculator

Convert your monthly customer churn rate to annual churn rate and visualize the long-term impact on your customer base.

Monthly Churn Rate
2.0%
Annual Churn Rate
21.5%
Annual Retention Rate
78.5%

Enter your monthly customer churn rate as a percentage

Convert your monthly churn rate to an annual churn rate and visualize the impact on your customer base over time. This calculator helps SaaS businesses understand the compounding effect of monthly churn and make better retention decisions.

How It Works

  1. Enter your monthly churn rate as a percentage
  2. The calculator will show:
    • Your equivalent annual churn rate
    • Your annual retention rate
    • Monthly to annual conversion visualization

Understanding the Results

The calculator uses compound rate calculations to show how monthly churn accumulates over a year. This is more accurate than simple multiplication because it accounts for the decreasing customer base each month.

The calculator does not account for new users. It shows the retention of customers that were with you at the start of the year.

Formula

The annual churn rate is calculated using:

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

For example:

  • If your monthly churn rate is 5%
  • Annual churn rate = (1 - (1 - 0.05)^12) × 100
  • Annual churn rate = 46.0%

General Formula for Any Time Period

To calculate churn rate for any number of months, use:

Cumulative Churn Rate = (1 - (1 - Monthly Churn Rate)^n) × 100

Where n is the number of months.

Benchmarks

Monthly churn rate benchmarks by company type:

  • Enterprise SaaS: 0.5-1% monthly (6-11% annual)
  • Mid-market SaaS: 1-2% monthly (11-22% annual)
  • SMB SaaS: 2-4% monthly (22-39% annual)
  • Consumer SaaS: 3-7% monthly (31-58% annual)

Common Mistakes to Avoid

  1. Linear Extrapolation: Don't multiply monthly churn by 12. This overestimates annual churn because it doesn't account for the decreasing customer base.

  2. Ignoring Seasonality: Monthly churn rates might vary throughout the year. Consider using a weighted average monthly churn rate for more accurate annual predictions. This calculator does not account for seasonality.

  3. Mixing Revenue and Logo Churn: Be clear about whether you're measuring customer (logo) churn or revenue churn, as they can differ significantly.

Tips for Improvement

  1. Onboarding: Invest in customer onboarding to ensure users get value quickly
  2. Customer Success: Proactively engage with customers before they consider churning
  3. Feature Adoption: Track and improve feature adoption rates
  4. Feedback Loops: Implement regular feedback collection and act on insights
  5. Value Demonstration: Regularly show customers the value they're getting

Related Metrics

Churn Metrics

Retention Metrics