Churn Impact Analyzer
Quantifies the revenue impact of customer churn on a monthly and annual basis. Calculates the revenue required from new customers to replace churned revenue and models the ROI of retention initiatives.
Sales - Churn Impact Analyzer.xlsx
Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice
What This Spreadsheet Solves
- No clear view of how much revenue churn costs the business each period
- Inability to calculate the new customer acquisition needed to offset churn
- Difficulty building a financial case for investing in retention programs
- Underestimating the compounding effect of monthly churn on annual revenue
- No framework to compare the cost of retention vs. the cost of replacement
Who This Is For
- Customer success managers building retention business cases
- SaaS founders monitoring net revenue retention
- CFOs evaluating the financial impact of churn
- VP of Sales balancing new business vs. retention resources
Inputs
- $Monthly Recurring Revenue (MRR)
- %Monthly Churn Rate
- $Average Revenue per Customer
- $Customer Acquisition Cost
- $Proposed Retention Investment
Outputs
- Monthly Revenue Lost to Churn
- Annual Revenue Lost to Churn
- Customers Lost per Month
- Replacement Revenue Required
- Acquisition Cost to Replace
- Retention ROI (if investment reduces churn)
How Calculations Work
Monthly revenue lost is MRR times the churn rate. This is annualized and compounded to show the full-year impact. Customers lost is the churn rate times the customer count (MRR / average revenue per customer). Replacement cost multiplies customers lost by CAC. Retention ROI models the value saved if a proposed retention investment reduces churn by a configurable percentage, comparing the revenue saved to the investment cost.
Example Use Case
Scenario: SaaS company: $500K MRR, 3% monthly churn, $500 average revenue per customer, $1,200 CAC. Considering a $50K/month retention program expected to reduce churn by 0.5 points.
Result: Monthly revenue lost: $15K. Annual impact (compounded): $162K. Customers lost: 30/month. Replacement cost: $36K/month in CAC. Retention program: reduces churn to 2.5%, saving $2.5K MRR/month. Annual value saved: $30K+. Retention ROI: -33% in year 1, but positive by month 18 as saved customers compound.
What You Get — 5 Sheets
Technical Details
Frequently Asked Questions
What is the difference between logo churn and revenue churn?
Logo churn counts customers lost. Revenue churn counts dollars lost. If high-value customers churn, revenue churn will be higher than logo churn percentage. Choose the metric that matters most in CONFIG.
Why does the annual impact seem so high?
Because churn compounds. Losing 3% of MRR each month does not equal 36% annually. It compounds to roughly 30.6% of starting MRR lost over 12 months (some months apply churn to already-reduced MRR).
How do I estimate the churn reduction from a retention program?
Use industry benchmarks or run a pilot. A dedicated CSM team typically reduces churn by 0.5-1.5 percentage points. Automated engagement tools reduce it by 0.2-0.5 points. Be conservative.
Should I focus on reducing churn or increasing acquisition?
This model helps you compare both. If replacement via acquisition costs more than the retention investment for the same revenue impact, prioritize retention.
Can I model different churn rates by customer segment?
Yes. Enter each segment as a separate row in INPUT with its own MRR, churn rate, and ARPU. The model calculates segment-level and aggregate impact.
Download Churn Impact Analyzer
Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.