Convert Annual To Monthly Churn: Calculator, Formula, Benchmarks
High annual churn is devastating. Annual churn rates above 70% lead would be catastrophic for most businesses. Here's a simple way to calculate it.
The Formula To Convert
To convert annual churn to a monthly churn rate:
Monthly Churn Rate = 1 – (1 – Annual Churn Rate)^(1/12)
To convert monthly churn to annual churn:
Annual Churn Rate = 1 – (1 – Monthly Churn Rate)^12
Annual to Monthly Churn Conversion Table
High annual churn is devastating. Annual churn rates above 70% lead mean 10% monthly churn, which is catastrophic for most businesses.
| Annual Rate | Monthly Rate |
|---|---|
| 11.36% | 1% |
| 21.53% | 2% |
| 30.62% | 3% |
| 38.73% | 4% |
| 45.96% | 5% |
| 52.41% | 6% |
| 58.14% | 7% |
| 63.23% | 8% |
| 67.75% | 9% |
| 71.76% | 10% |
| 75.30% | 11% |
| 78.43% | 12% |
| 81.20% | 13% |
| 83.63% | 14% |
| 85.78% | 15% |
| 87.66% | 16% |
| 89.31% | 17% |
| 90.76% | 18% |
| 92.02% | 19% |
| 93.13% | 20% |
| 94.09% | 21% |
| 94.93% | 22% |
| 95.66% | 23% |
| 96.29% | 24% |
| 96.83% | 25% |
| 97.30% | 26% |
| 97.71% | 27% |
| 98.06% | 28% |
| 98.36% | 29% |
Monthly To Annual Churn Calculator
Visualize All Your Churn Metrics in 1-Click for Free
Get a free, visual analysis of your churn metrics and understand how your retention compares to other companies.
- Gross and new churn rates by date.
- Monthly and annual churn.
- Involuntary and voluntary churn rates.
- Revenue vs logo churn.
- Retention cohort analysis.
- New vs. old churn.
- Churn cake charts.
The most impactful way to reduce monthly churn is with Churnkey's cancel flows and failed payment recovery products. Failed payment recovery focuses on involuntary churn and requires no coding to set up. That means, you can start reducing churn in as little as 15 minutes. You can sign up right away or book a demo to learn more.
Annual To Monthly Churn Chart
Even, small changes in annual churn can have significant impacts on your revenue. For example, if your monthly churn increases from 1% to 2% nearly doubles the annual churn from 11.36% to 21.53%.
If we flip the x and the y axis, you'd notice that the annual churn rate grows more slowly as the monthly rate increases. This is because churn compounds over time, and there's a diminishing pool of customers to lose each month.
For example, if you start with 100 customers and have a 5% monthly churn rate, you lose 5 customers in the first month, leaving you with 95. In the second month, you lose 5% of 95, and so on. The churn process is similar to exponential decay, where the rate of loss is proportional to the current amount.
Churn Can Make Or Break Your Business
The data underscores the importance of customer retention. Even a seemingly low monthly churn of 5% results in losing nearly half (45.96%) of customers annually.
There's a "flattening" effect at higher churn rates. The difference in annual impact between 28% and 29% monthly churn is minimal (98.06% vs 98.36% annually).
A rough estimate is that the annual churn rate is about 12 times the monthly rate for low churn rates (1-3%). This multiplier decreases as the rate increases.
For sustainable growth, businesses should aim for very low monthly churn rates, ideally below 2-3%. Anything above 5% monthly would require significant customer acquisition to maintain, let alone grow, the customer base.
Reduce High Annual Churn With Churnkey
Churnkey offers support for both voluntary and involuntary churn prevention as well as deep analytics so you can understand the root causes of your customer churn.
On average, our customers retain 20-40% of the revenue that they would have otherwise lost to churn. You can sign up right away or book a demo to learn more.
Additional Reading
- Calculate Annual Churn (5 other methods)
- Involuntary Vs Voluntary Churn
- Churn Rate Benchmarks
- State of Retention Report 2024
- Gross Vs Net Churn
- Retention Cohort Analysis
- and more on the blog
Thanks for reading!
