{
  "slug": "saas-churn-cost",
  "title": "Churn Cost & Replacement Calculator",
  "heading": "Churn Cost Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/saas-churn-cost",
  "summary": "Price the revenue and acquisition spend it takes just to stand still.",
  "description": "Churn has two costs: the recurring revenue you lose, and the acquisition spend needed to replace it before any growth counts. This calculator converts a monthly or annual churn rate into lost ARR, the number of new customers required to replace it, and the CAC bill for that replacement — the treadmill cost of standing still. It also shows what a one-point improvement in churn is worth annually, which is almost always a larger number than teams expect and usually justifies retention investment that gets deprioritised in favour of new-logo work.",
  "formula": "Lost ARR = ARR × annual churn rate. Customers to replace = lost ARR ÷ average ACV. Replacement CAC = customers to replace × CAC.",
  "dateModified": "2026-08-25",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=saas-churn-cost",
  "inputs": [
    {
      "id": "arr",
      "label": "Current ARR",
      "kind": "number",
      "hint": null,
      "default": 5000000,
      "unit": "$",
      "min": 1,
      "max": null
    },
    {
      "id": "churn",
      "label": "Monthly logo churn rate",
      "kind": "number",
      "hint": null,
      "default": 1.4,
      "unit": "%",
      "min": 0,
      "max": 50
    },
    {
      "id": "acv",
      "label": "Average annual contract value",
      "kind": "number",
      "hint": null,
      "default": 14000,
      "unit": "$",
      "min": 1,
      "max": null
    },
    {
      "id": "cac",
      "label": "Customer acquisition cost",
      "kind": "number",
      "hint": null,
      "default": 11000,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "lost",
      "label": "ARR lost to churn per year",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "annualChurn",
      "label": "Effective annual churn rate",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "customers",
      "label": "Customers needed to replace it",
      "format": "number",
      "hint": null,
      "primary": false
    },
    {
      "id": "replacementCac",
      "label": "Acquisition spend just to stand still",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "onePointValue",
      "label": "Annual value of cutting monthly churn by 1 point",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Current ARR: 5000000 $",
      "Monthly logo churn rate: 1.4 %",
      "Average annual contract value: 14000 $",
      "Customer acquisition cost: 11000 $"
    ],
    "outputs": [
      "ARR lost to churn per year: $778,245.42",
      "Effective annual churn rate: 15.6%",
      "Customers needed to replace it: 56",
      "Acquisition spend just to stand still: $611,478.54",
      "Annual value of cutting monthly churn by 1 point: $543,455.65"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter current arr ($).",
      "Enter monthly logo churn rate (%).",
      "Enter average annual contract value ($).",
      "Enter customer acquisition cost ($).",
      "Read your arr lost to churn per year on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "arr": 3000000,
        "churn": 0.84,
        "acv": 8500,
        "cac": 6500
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "arr": 5000000,
        "churn": 1.4,
        "acv": 14000,
        "cac": 11000
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "arr": 8000000,
        "churn": 2.2399999999999998,
        "acv": 22500,
        "cac": 17500
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Why isn't annual churn just monthly churn times twelve?",
      "a": "Because churn compounds against a shrinking base. 2% monthly is about 21.5% annually, not 24% — the difference grows with the rate, and multiplying by twelve overstates losses at high churn rates."
    },
    {
      "q": "Is logo churn or revenue churn the right measure?",
      "a": "Both, for different questions. Logo churn tells you about product-market fit and onboarding; revenue churn tells you about the P&L. If logo churn is high but revenue churn is low, you're losing small accounts that were never going to be profitable."
    },
    {
      "q": "What's an acceptable churn rate?",
      "a": "For SMB self-serve, 3-5% monthly is common and 2% is good. For mid-market, under 1% monthly. For enterprise, annual gross churn under 10% and often under 5%. Compare within your segment — cross-segment benchmarks are misleading."
    },
    {
      "q": "Where does churn reduction pay off most?",
      "a": "In the first 90 days. Most cancellations are decided during onboarding, when the customer either reaches a first value moment or doesn't. Retention spend aimed at month 11 renewals almost always underperforms spend aimed at week two activation."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/saas-net-revenue-retention",
    "https://www.revenuelab.fyi/toolbox/saas-ltv-cac-payback",
    "https://www.revenuelab.fyi/toolbox/saas-burn-multiple"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Churn Cost & Replacement Calculator (https://www.revenuelab.fyi/toolbox/saas-churn-cost)"
}