You can spend all your energy getting new members. But if they’re leaving out of the back door just as fast, you’re stuck on a treadmill going nowhere. That’s why churn rate matters. It tells you how many members you’re losing and forces you to ask the uncomfortable question: why are they leaving?

Don’t be sad if your churn rate is higher than you expected. Most membership site owners don’t even know their number. Just knowing it puts you in a better position to fix it.

What is Churn Rate?

Churn rate is the percentage of subscribers who cancel their membership during a given period. Usually measured monthly.

If you start the month with 100 members and 5 cancel before the month ends, your monthly churn rate is 5%.

Simple enough on the surface. But churn is one of those metrics that can quietly destroy a membership business if you’re not watching it closely.

How to Calculate Churn Rate

The basic formula is:

Churn Rate = (Customers lost during period ÷ Customers at start of period) × 100

Let’s say Carlos runs a stock trading education site. He started March with 400 members. By March 31st, 24 members had cancelled.

His churn rate: (24 ÷ 400) × 100 = 6%

That means Carlos loses about 6 out of every 100 members each month. Over a year, that adds up fast.

Monthly vs Annual Churn Rate

Most membership sites track monthly churn because it gives you faster feedback. But sometimes you’ll want to know your annual churn rate for planning and benchmarking purposes.

A common mistake is multiplying monthly churn by 12. That’s not quite right because churn compounds.

The accurate formula for converting monthly churn to annual churn is:

Annual Churn Rate = 1 – (1 – Monthly Churn Rate)^12

Using Carlos’s 6% monthly churn:

Annual Churn = 1 – (1 – 0.06)^12 = 1 – (0.94)^12 = 1 – 0.476 = 52.4%

That’s a reality check. A 6% monthly churn rate means Carlos will lose more than half his members over a year if nothing changes. Suddenly that “small” monthly number looks very different.

Why Churn Rate Matters for WordPress Membership Sites

Churn is the silent killer of membership businesses. Here’s why it deserves your attention:

It determines your growth ceiling. If you’re adding 20 new members per month but losing 25, you’re shrinking. Doesn’t matter how good your marketing is. You can’t outrun bad retention.

It affects lifetime value. The longer members stay, the more revenue they generate. High churn means low lifetime value, which limits how much you can spend to acquire new members.

It reveals product problems. Members don’t cancel for no reason. Rising churn often signals that your content isn’t meeting expectations, your community isn’t engaging, or competitors are offering something better.

It compounds over time. A small improvement in churn rate has massive long-term effects. Reducing monthly churn from 6% to 4% might not sound dramatic, but over a year that’s the difference between losing 52% of your members versus 39%.

Amy Porterfield, who runs multiple membership programs, has talked about how reducing churn was more valuable than any launch she ever did. One good retention strategy can be worth more than a dozen marketing campaigns.

The Two Types of Churn

Not all churn is the same. Understanding the difference helps you fix the right problems.

Voluntary churn happens when members actively decide to cancel. They log in, hit the cancel button, and leave. This usually means they didn’t see enough value, found an alternative, or no longer need what you offer.

Involuntary churn happens when members leave due to failed payments. Their credit card expired, got declined, or hit its limit. They didn’t choose to leave. They just fell through the cracks.

Here’s the good news: involuntary churn is often easier to fix. A solid dunning process (automated emails when payments fail) can recover 20-40% of failed payments. That’s members you would have lost for no good reason.

If you’re running MemberPress, Paid Memberships Pro, or WooCommerce Memberships connected to Stripe, you can set up automated retry logic and failed payment emails. It’s one of the highest-ROI fixes for any membership site.

What’s a Good Churn Rate?

Benchmarks vary by industry, price point, and audience. But here are some reference points for WordPress membership sites:

• Excellent: Under 3% monthly churn
• Good: 3-5% monthly churn
• Average: 5-7% monthly churn
• Concerning: 7-10% monthly churn
• Critical: Over 10% monthly churn

Keep in mind that newer membership sites typically have higher churn. You’re still figuring out your audience, refining your content, and building community. A 7% churn rate in year one might drop to 4% by year three as you improve.

Also consider your pricing. Lower-priced memberships ($5-15/month) tend to have higher churn because the barrier to both join and leave is low. Premium memberships ($50-200/month) often see lower churn because members are more committed and you’re likely providing more hands-on value.

Churn Rate vs Retention Rate

These two metrics are flip sides of the same coin.

Retention Rate = 100% – Churn Rate

If Carlos has 6% monthly churn, his retention rate is 94%. Both numbers tell you the same thing from different angles.

Some people prefer thinking in terms of retention because it’s a positive framing. “We retained 94% of our members” sounds better than “We lost 6% of our members.” Use whichever helps you and your team focus on improving.

Common Mistakes

Only tracking total churn. If you’re not separating voluntary from involuntary churn, you’re missing crucial information. The fixes are completely different. Lumping them together means you might be solving the wrong problem.

Measuring churn inconsistently. Pick a method and stick with it. Some people count cancellations when the member clicks cancel. Others count when the subscription actually ends. Either works, but mixing them makes trends meaningless.

Ignoring cohort differences. Your overall churn rate is an average. But members who joined during a Black Friday sale might churn at 12% while members from organic search churn at 4%. Cohort analysis reveals which acquisition channels bring members who actually stick around.

Panicking over monthly fluctuations. Churn rate will bounce around month to month. One bad month doesn’t mean your business is failing. Look at 3-month rolling averages to see the real trend.

Not asking why. A number without context is just a number. When members cancel, ask them why. A simple exit survey can reveal patterns you’d never notice otherwise. Maybe everyone’s leaving because they can’t find the content they want. That’s fixable.

How to Reduce Churn

Reducing churn is a topic that deserves its own deep-dive guide. But here are the high-impact strategies that work for most WordPress membership sites:

Nail your onboarding. The first 30 days are critical. Members who engage early are far more likely to stick around. Send a welcome sequence. Point them to your best content. Make them feel like they made the right choice.

Build community. Members who connect with other members have a reason to stay beyond just your content. A simple forum, Discord server, or Facebook group can dramatically improve retention.

Deliver consistent value. If you launched with a bang but haven’t added new content in three months, members will notice. Set a content schedule and stick to it.

Fix involuntary churn first. It’s the lowest-hanging fruit. Set up dunning emails in your membership plugin. Enable smart payment retries through Stripe. You can recover a significant chunk of otherwise lost members with minimal effort.

Offer annual plans. Members who pay annually churn at much lower rates than monthly subscribers. They’ve made a commitment. Incentivize annual billing with a discount and you’ll improve both cash flow and retention.

Real World Example

Let’s look at how churn affects a real business over time.

Priya runs a WordPress-based cooking membership site. She has 500 members paying $15/month. Her MRR is $7,500. Her current churn rate is 8% monthly.

At 8% churn, she loses 40 members per month. To just stay flat, she needs to add 40 new members every single month. That’s exhausting and expensive.

Priya decides to focus on retention. She implements a proper onboarding email sequence, adds a private Facebook group, sets up dunning emails for failed payments, and starts releasing new recipes every week instead of sporadically.

Six months later, her churn rate drops to 4%. Now she’s only losing 20 members per month. Those same marketing efforts that previously just kept her flat are now driving real growth.

After a year at 4% churn instead of 8%, Priya has 180 more members than she would have otherwise. At $15/month, that’s an extra $2,700 MRR. All from fixing the back door instead of just pushing more people through the front.

Track Your Churn Rate Automatically

Calculating churn manually is tedious. You have to pull cancellation data, cross-reference start dates, separate voluntary from involuntary, and do the math each month. Most membership site owners either do it inconsistently or skip it entirely.

We built Sad Subscription Analytics to track this for you. It connects to your payment provider, monitors cancellations in real time, and calculates your churn rate automatically. You’ll see the trend over time, broken down by churn type, without touching a spreadsheet.

No need to feel sad about your churn rate when you can actually see it, understand it, and start improving it. That’s the whole point.

If you’ve got a handle on MRR, ARR is the natural next step. It’s the bigger picture view of your membership revenue. The yearly snapshot that tells you where your business stands and where it’s heading.

Don’t be sad if you’ve been ignoring ARR until now. Most membership site owners focus on monthly numbers. But understanding ARR opens up a whole new perspective on your business health.

What is ARR?

Annual Recurring Revenue (ARR) is the total predictable revenue your membership site generates over a 12-month period from active subscriptions.

The simplest way to think about it: ARR is your MRR multiplied by 12.

If your MRR is $2,000, your ARR is $24,000. That’s the annualized value of your current subscriber base if nothing changed for a full year.

For members who pay annually, you count their full payment toward ARR directly. A member paying $200 per year contributes $200 to your ARR. No conversion needed.

How to Calculate ARR

The basic formula is:

ARR = MRR × 12

That’s it for the simple version.

But if you want to be more precise and you have a mix of monthly and annual subscribers, you can calculate it directly:

ARR = (Monthly subscribers × monthly price × 12) + (Annual subscribers × annual price)

Let’s say Mike runs a photography tutorial site. He has:

• 80 members paying $15/month = $1,200 MRR = $14,400 annually
• 50 members paying $150/year = $7,500 annually

Mike’s total ARR is $21,900.

Notice something interesting here. Mike’s annual plan is priced at $150, which is effectively $12.50 per month. That’s a discount compared to the $15 monthly rate. This is common practice. You give members a reason to commit for a year, and you get more predictable revenue in return.

Why ARR Matters for WordPress Membership Sites

ARR gives you the long view. While MRR tells you about this month, ARR helps you think in terms of business years. Here’s why that matters:

Business valuation. If you ever want to sell your membership site, buyers look at ARR. A site with $50,000 ARR is typically valued at 2-4x that number, depending on growth rate and churn. That’s real money on the table.

Goal setting. Saying “I want to hit $100,000 ARR” is more meaningful than monthly targets. It forces you to think about sustainable growth rather than one-off wins.

Investor conversations. If you’re ever pitching to investors or applying for business financing, ARR is the metric they want to hear. It’s the standard language of subscription businesses.

Seasonal perspective. Some membership sites have seasonal fluctuations. A fitness site might surge in January and dip in summer. ARR smooths out these bumps and shows you the underlying trend.

Take Nerd Fitness as an example. Steve Kamb built that business over years, thinking in terms of annual growth rather than monthly spikes. That long-term mindset is what separates hobbyist sites from real businesses.

If you’re running a WordPress membership site with MemberPress, Paid Memberships Pro, or Restrict Content Pro connected to Stripe, you have all the data needed to calculate ARR. You just need to pull it together in a meaningful way.

ARR vs MRR: When to Use Which

Both metrics matter, but they serve different purposes.

Use MRR when:

• Tracking month-to-month performance
• Monitoring short-term trends
• Making operational decisions (Can I afford this tool? Should I run this promotion?)
• Analyzing the impact of recent changes

Use ARR when:

• Setting yearly business goals
• Valuing your business
• Comparing yourself to industry benchmarks
• Talking to investors, partners, or potential buyers
• Planning long-term strategy

Most WordPress membership site owners should track both. MRR for the day-to-day pulse. ARR for the strategic overview.

The ARR Growth Rate

Once you know your ARR, the next question is: how fast is it growing?

ARR growth rate tells you the percentage increase in your annual recurring revenue compared to the previous period. Usually measured year-over-year.

ARR Growth Rate = ((Current ARR – Previous ARR) / Previous ARR) × 100

Let’s say Priya runs a language learning membership site. Last January, her ARR was $36,000. This January, it’s $48,000.

Her ARR growth rate: (($48,000 – $36,000) / $36,000) × 100 = 33.3%

That’s strong growth. Priya’s business is moving in the right direction.

Common Mistakes

Confusing ARR with annual revenue. ARR is only recurring subscription revenue. If you sold $5,000 worth of one-time courses last year, that doesn’t count toward ARR. Keep them separate.

Forgetting to normalize monthly subscribers. If you only count annual subscribers in your ARR calculation, you’re missing a huge chunk of your recurring revenue. Monthly subscribers absolutely count. Multiply their MRR contribution by 12.

Double counting annual payments. When someone pays $200 upfront for an annual subscription, it’s tempting to feel like you have $200 more this month. But for ARR purposes, that $200 is spread across the year. Don’t inflate your ARR by counting annual payments multiple times.

Ignoring ARR churn. Your ARR isn’t static. Members cancel. Annual subscribers don’t renew. If you’re not tracking how much ARR you’re losing alongside how much you’re gaining, you’re only seeing half the picture. This connects directly to your churn rate.

Overcomplicating it. Some site owners get lost trying to calculate ARR with perfect precision, accounting for every proration and partial month. For most WordPress membership sites, MRR × 12 is accurate enough. Don’t let perfect be the enemy of good.

Real World Benchmarks

What’s a good ARR for a WordPress membership site? It varies wildly based on niche, pricing, and audience size. But here are some reference points:

• Side project level: $5,000-20,000 ARR
• Full-time creator income: $50,000-100,000 ARR
• Established membership business: $100,000-500,000 ARR
• Major players like Copyblogger or Smart Passive Income: $1,000,000+ ARR

No need to feel sad if your ARR seems small compared to the big names. Every successful membership site started at zero. Pat Flynn didn’t wake up one day with a million-dollar ARR. He built it over years, one subscriber at a time.

The goal isn’t to hit some arbitrary number. It’s to grow consistently and sustainably. A 20% year-over-year ARR growth rate puts you ahead of most businesses.

Track Your ARR Automatically

Calculating ARR by hand is manageable when you have one membership tier and a handful of subscribers. But when you’ve got multiple plans, a mix of monthly and annual billing, and hundreds of members across MemberPress or Paid Memberships Pro, the math gets tedious fast.

We built Sad Subscription Analytics to handle this for you. It connects to your payment provider, pulls in your subscription data, and calculates both MRR and ARR automatically. You’ll see exactly where your business stands without wrestling with spreadsheets.

Because knowing your ARR is the first step to growing it. And growing it is the first step to making your subscription metrics a lot less sad.

If you run a membership site, MRR is probably the most important number you’ll ever track. It tells you exactly how much money you can expect to come in every month from your subscribers. Not one-time purchases. Not annual totals divided by 12. Just the predictable, recurring revenue that hits your account month after month.

Don’t be sad if MRR sounds confusing right now. By the end of this article, you’ll understand it better than most membership site owners.

What is MRR?

Monthly Recurring Revenue (MRR) is the total amount of predictable revenue your membership site generates each month from active subscriptions.

Here’s a simple example. Say you have 50 members paying $20 per month. Your MRR is $1,000. That’s it.

But what if some members pay annually? You normalize it to a monthly figure. So a member paying $200 per year counts as $16.67 per month toward your MRR ($200 ÷ 12).

How to Calculate MRR

The basic formula is:

MRR = Number of active subscribers × Average revenue per subscriber

For most WordPress membership sites, it gets a bit more complex because you probably have multiple membership tiers. In that case:

MRR = (Tier 1 subscribers × Tier 1 price) + (Tier 2 subscribers × Tier 2 price) + …

Let’s say Sarah runs a yoga membership site similar to Yoga With Adriene, but with paid tiers. She offers three plans:

• Basic: 100 members at $9/month = $900
• Pro: 40 members at $19/month = $760
• All Access: 10 members at $49/month = $490

Sarah’s total MRR is $2,150.

Now Sarah knows exactly what revenue to expect next month. No guessing. No hoping. Just a clear number she can plan around.

Why MRR Matters for WordPress Membership Sites

MRR gives you clarity. When you know your MRR, you can:

Predict cash flow. You know roughly what’s coming in next month, which makes planning easier. No more crossing your fingers at the end of each month hoping the numbers add up.

Spot trends early. A dropping MRR signals trouble before it becomes a crisis. If Sarah notices her MRR slipping from $2,150 to $1,900 over two months, she can investigate now rather than panic later.

Measure growth accurately. Revenue spikes from one-time promotions can mask real performance. MRR strips away the noise and shows you what’s actually sustainable.

Make confident decisions. Should you invest in that new plugin? Hire a VA? Upgrade your hosting? MRR tells you what you can actually afford without putting your business at risk.

Take Pat Flynn from Smart Passive Income. He’s talked openly about tracking MRR across his membership communities. It’s how creators at his level know whether they’re actually growing or just having a good month. The difference between a $10,000 month and $10,000 MRR is massive. One is luck. The other is a business.

If you’re using MemberPress, Paid Memberships Pro, Restrict Content Pro, or any other WordPress membership plugin connected to Stripe or PayPal, your MRR is sitting in your data right now. You just need to pull it together.

MRR Components: The Full Picture

Once you understand basic MRR, you’ll want to dig deeper. MRR isn’t just one number. It moves. It has parts. Understanding those parts helps you see what’s actually driving your revenue.

New MRR: Revenue from brand new subscribers this month. Sarah signed up 15 new members in January. Their combined monthly value is $180. That’s her New MRR.

Expansion MRR: Revenue from existing members who upgraded. Three of Sarah’s Basic members moved to Pro, adding $30 in monthly revenue. That’s Expansion MRR.

Churned MRR: Revenue lost from cancellations. Five members cancelled their $9 Basic plans. That’s $45 in Churned MRR. Not fun to look at, but tracking it is the first step to fixing it.

Contraction MRR: Revenue lost from downgrades. Two Pro members dropped to Basic, reducing monthly revenue by $20.

Net New MRR: The final picture. Take New MRR plus Expansion MRR, then subtract Churned MRR and Contraction MRR.

For Sarah: $180 (new) + $30 (expansion) – $45 (churned) – $20 (contraction) = $145 Net New MRR

Her business grew by $145 in recurring revenue this month. Not bad.

Common Mistakes

Counting one-time payments. That $500 course sale feels great, but it’s not MRR. Only recurring revenue counts. Mixing the two gives you a distorted view of your actual business health.

Forgetting failed payments. A subscriber whose card declined isn’t really active. Don’t count them until payment clears. This is one of the most common ways membership site owners accidentally overstate their MRR.

Ignoring annual normalization. If you count a $240 annual subscription as $240 MRR, you’re overstating by 12x for that month. Always divide annual payments by 12.

Not tracking MRR components. Knowing your total MRR is good. Knowing that your Churned MRR is climbing while New MRR stays flat is better. That’s actionable information. Total MRR alone can hide problems until they’re too big to ignore.

Real World Benchmarks

So what’s a good MRR? It depends entirely on your niche, pricing, and goals. But here are some reference points:

• A solo creator with a small audience might target $1,000-5,000 MRR as a meaningful side income.
• Full-time creator businesses often aim for $10,000-30,000 MRR.
• Larger membership sites like Copyblogger or Nerd Fitness operate at $100,000+ MRR.

The number itself matters less than the direction. Growing MRR means a healthy business. Flat or declining MRR means something needs attention.

No need to feel sad if your MRR is lower than you’d like. Everyone starts somewhere. The point is to know your number, understand what moves it, and track it consistently. That awareness alone puts you ahead of most membership site owners.

Track Your MRR Automatically

Calculating MRR manually works when you have 20 members. At 200 or 2,000, it becomes a spreadsheet nightmare. And manually tracking MRR components? That’s a full-time job.

We built Sad Subscription Analytics to solve this. It’s a WordPress plugin that connects to your payment provider and calculates MRR automatically. New MRR, Churned MRR, Expansion, Contraction. All of it. No spreadsheets. No guessing. Just clear numbers so you can spend less time calculating and more time growing.

Because understanding your MRR is the first step to making it less sad and more impressive.