Churn impact. What's a 1% churn cut actually worth?
Drag the sliders. See what dropping monthly churn does to LTV, ARR retained, and MRR over twelve months. Compounding math, not napkin math.
Model a churn-reduction program
INTERACTIVE · LIVE · COMPOUNDING-AWARE
Monthly churn is the % of customers who cancel each month. Annualized churn isn't 12× monthly — it's 1 − (1 − m)¹² because each month compounds against a smaller base. ACV is what an average customer pays per year. MRR projection assumes you keep adding new MRR at your current churn rate (apples-to-apples comparison).
Compounding monthly-churn formula. Excludes expansion revenue, seasonality, and acquisition cost shifts — model those separately.
LTV with compounding churn. Annual churn is 1 − (1 − m)¹², not m × 12. A 5% monthly churn isn't 60% annual — it's ~46%, because each month chips at a shrinking base. LTV is then (ACV × margin) ÷ annual_churn. That's the cash you actually pocket from one customer over their lifetime.
ARR retained. We compute customers-on-book (MRR ÷ monthly ACV), apply both annual-churn rates, and the difference × ACV is the ARR you keep from killing churn — assuming the same starting base.
12-month MRR projection. Apples-to-apples: we assume new MRR is added each month at the rate of current churn × current MRR. At target churn, that same new-MRR pace overwhelms a smaller leak — the gap is the visible win. If you cut churn and hold acquisition flat, the curve is even steeper.
Tools that move the churn number
CRM + LIFECYCLE · WHERE RETENTION HAPPENSHubSpot
Service Hub + workflows for at-risk-customer alerts. Where most SaaS teams build their save motion.
Salesforce
Enterprise-grade health scoring and renewal forecasting. Heavier lift, sharper churn signal once dialed.
Klaviyo
Behavior-triggered email + SMS for win-backs and cancellation flows. Still the lifecycle workhorse.