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Total Monthly Recurring Revenue (MRR) lost due to canceled subscriptions.
Explanation of metric
This metric represents the total MRR lost when customers cancel their accounts. It does not include the revenue lost from downgrades.
How it's measured
Total Cancellation MRR = Total loss in MRR due to subscription cancellations.
This doesn't include downgrades.
Reading
A downward trend Indicates positive performance since that implies there is lesser MRR lost over the period due to cancellations.
Interpretation
An increase in Cancellation MRR negatively impacts your business, as you lose a paying customer and incur costs to acquire a new one. If this metric rises, it's crucial to investigate why customers are leaving, at what stage they are canceling, and whether high-value customers are among those churning.
Example
In a given period:
Total Monthly Recurring Revenue (MRR) lost from canceled subscriptions, segmented by country.
Explanation of metric
This metric measures the total MRR lost when customers cancel their subscriptions, with a focus on country-specific data. It helps identify the geographical areas where revenue loss from cancellations is most significant. However, it does not account for revenue lost due to downgrades.
How it's measured
Total Cancellation MRR by Country = Sum of MRR lost from canceled subscriptions during the period, segmented by country.
Reading
Typically, a reduction in this metric is favorable as it would indicate less revenue loss from cancellations.
Interpretation
This metric is crucial for understanding the impact of cancellations on revenue across different countries. By analyzing the MRR lost in each country, businesses can tailor their retention strategies to specific markets and work towards reducing cancellations in high-churn regions.
Example
Country A: 30 customers at $20/month canceled their subscription.
Cancellation MRR = 30 x $20 = $600
Country B: 40 customers at $25/month canceled their subscription.
Cancellation MRR = 40 x $25 = $1,000
Country C: 50 customers at $15/month canceled their subscription.
Cancellation MRR = 50 x $15 = $750
The total Monthly Recurring Revenue (MRR) lost from canceled subscriptions, segmented by Plan.
Explanation of metric
This metric is visualized as a chart, where each bar represents the MRR lost per canceled subscription, further segmented by plan. The metric excludes revenue lost from downgrades.
This feature is available with RevenueStory (RS) premium only. To use this metric effectively, you must configure a custom field at the Customer resource level in Chargebee and map it to the Sales Agent field in RevenueStory. You can configure and select your own values in this custom field, but it's recommended to use values relevant to your business. Please connect with your Customer Success Manager or contact support for assistance.
How it's measured
Total Cancellation MRR by Plan = Total MRR of churned subscriptions, segmented by plan.
Cancellations within the same period of activation are not included.
Reading
A downward trend indicates positive performance.
Interpretation
This metric helps evaluate the effectiveness of product offerings, plan pricing, and the onboarding experience. It can also be used to identify voluntary churn, where customers dissatisfied with a particular plan cancel their subscription due to a lack of perceived value.
Example
Plan A: 15 customers at $10/month unsubscribed, resulting in a Total Cancellation MRR of $150.
Plan B: 25 customers at $15/month unsubscribed, resulting in a Total Cancellation MRR of $375.
The total Monthly Recurring Revenue (MRR) lost from canceled subscriptions, segmented by Churn Type.
Explanation of metric
This metric is displayed as a chart, with each bar representing the MRR lost per canceled subscription, categorized by Churn Type.
It does not include revenue lost due to customer downgrades.
How it's measured
Total Cancellation MRR by Churn Type = Total MRR of churned subscriptions, segmented by Churn Type.
Cancellations within the same month of activation are not included.
Reading
A downward trend indicates positive performance.
Interpretation
This metric helps evaluate the effectiveness of product offerings, plan pricing, and the onboarding experience. It is particularly useful for distinguishing between voluntary churn (where customers cancel due to dissatisfaction) and involuntary churn.
Example
Voluntary Churn: 15 customers on a $10/month plan churned, resulting in a Total Cancellation MRR of $150.
Involuntary Churn: 10 customers on a similar $10/month plan churned, resulting in a Total Cancellation MRR of $100.
A summary of subscription churn categorized by the number of days taken to cancel a subscription after sign-up or activation.
Explanation of metric
This metric is presented in a table that breaks down churn into time-based buckets according to the activation date. It is available for current, previous, and the last 12 months' cancellations, focusing on customers with active subscription terms of 7 days, 8-30 days, 31-90 days, and up to the last 2 years.
This feature is available with RevenueStory (RS) premium only. To use this metric effectively, you must configure a custom field at the Customer resource level in Chargebee and map it to the Activation Date field in RevenueStory. You can select and configure your own values in this custom field, but it's recommended to use values relevant to your business. Please connect with your Customer Success Manager or contact support at support@chargebee.com.
How it's measured
Churn Breakdown Summary = Number of churned subscriptions per subscription term.
The activation period can be 0-7, 8-30, or 31-90 days. The activation date is when the subscription moves into active status on a free or paid plan.
Reading
There are no specific upward or downward trend indications.
Interpretation
This report is valuable for understanding at which stage cancellations occur, especially if churn is high. A late-stage cancellation suggests the product may not be meeting the customer's evolving needs. In such cases, it's important to identify the features customers require as their businesses grow and incorporate those into your product roadmap.
Example
For cancellations within the last 12 months:
A summary of subscription churn categorized by the number of days taken to cancel a subscription after signup.
Explanation of metric
This metric is displayed in a table that breaks down churn into time-based buckets based on the signup date. It is available for current, previous, and the last 12 months' cancellations, focusing on customers with active subscription terms of 7 days, 8-30 days, 31-90 days, and up to the last 2 years.
This feature is available with RevenueStory (RS) premium only. To use this metric effectively, you must configure a custom field at the Customer resource level in Chargebee and map it to the Signup Date in RevenueStory. While you can configure and select your own values in this custom field, it's recommended to use values relevant to your business. Please connect with your Customer Success Manager or contact support at support@chargebee.com for assistance.
How it's measured
Churn Breakdown by Signup Date = Number of churned subscriptions per signup date.
The signup date is the date when the subscription is created, typically the earliest of the subscription start date, subscription creation date, or the first invoice date.
Reading
There are no specific upward or downward trend indications.
Interpretation
This report helps identify the stage at which cancellations occur, particularly if churn is high. Early-stage churn (within the first 30 days) may indicate a lack of product-market fit, where the product either doesn't meet expectations or is being targeted at the wrong audience. This suggests that customers sign up to try the product but quickly churn. In such cases, it's crucial to revisit and refine product positioning.
Example
For cancellations within the last 12 months:
The total number of subscription cancellations during a specific period.
Explanation of metric
This metric displays the total number of cancellations within a given period. A point-in-time KPI is also available, indicating the number of subscriptions canceled during the current period, along with variance compared to previous periods and the percentage of churn across different time frames.
Cancellations from Free, Paid, or Pause subscription status are included. It does not include cancellations from Trial or Future.
How it's measured
Total Subscription Churn = Number of subscriptions canceled after activation.
Subscriptions canceled in the same period as they were activated are excluded.
Reading
A downward trend in this metric indicates improved performance in customer retention.
Interpretation
Tracking customer churn is crucial because losing customers directly impacts revenue. A high churn rate can severely affect a company's bottom line, making it essential to monitor and address this metric.
Example
In a given quarter, a SaaS company experienced a total of 180 subscription cancellations.
The total number of subscription cancellations during a specific period, segmented by plan.
Explanation of metric
This metric is visualized as a chart, showing the number of customers who have canceled their subscriptions, segmented by plan.
Cancellations from Free, Paid, or Pause subscription status are included. It does not include cancellations from Trial or Future.
How it's measured
Total Subscription Churn by Plan = Number of subscriptions canceled per plan.
It does not include cancellations of future-scheduled or trial subscriptions.
Reading
A downward trend in this metric indicates better performance in customer retention.
Interpretation
A high churn rate for a specific plan may reveal a disconnect between the product's positioning and customers' perceived value. This metric helps identify plans with higher churn rates, suggesting that the plan may need updates to its features, improvements in service quality, or pricing optimization.
Example
In a given quarter, a SaaS company observed a total of 180 subscription cancellations across various plans. These cancellations are classified by plan and include only Paid, Free, and Paused subscriptions, excluding Trial and Future subscriptions.
Here's a breakdown of the cancellations segmented by plan:
Paid Subscriptions Canceled (90):
Plan A: 30 cancellations
Plan B: 25 cancellations
Plan C: 35 cancellations
Free Subscriptions Canceled (50):
Plan A: 20 cancellations
Plan B: 15 cancellations
Plan C: 15 cancellations
Paused Subscriptions Canceled (40):
Plan A: 10 cancellations
Plan B: 20 cancellations
Plan C: 10 cancellations
Excluded from Total Subscription Churn:
Trial Subscriptions Canceled: 30
Future Subscriptions Canceled: 10
Total Subscription Churn by Plan Calculation:
Only cancellations from Paid, Free, and Paused subscriptions are included, as they represent active subscriptions that were terminated. Cancellations from Trial and Future subscriptions are excluded.
Plan A Total Churn: 30 (Paid) + 20 (Free) + 10 (Paused) = 60
Plan B Total Churn: 25 (Paid) + 15 (Free) + 20 (Paused) = 60
Plan C Total Churn: 35 (Paid) + 15 (Free) + 10 (Paused) = 60
The total number of paid subscriptions canceled during the period.
Explanation of metric
This metric tracks the total number of paid subscriptions that were canceled within a specific period. A trend line depicts these cancellations over time, offering insights into whether cancellations are increasing or decreasing. Additionally, a point-in-time KPI is available, providing the current period's Paid Subscription Churn, the variance from the previous period, and the percentage change in cancellations between the two periods.
How it's measured
Total Paid Subscription Churn = Total number of paid subscriptions canceled during the period.
Cancellations that occur within the same activation period are excluded from this metric.
Reading
A decrease in this metric is positive, indicating effective customer retention.
Interpretation
Given that the cost of acquiring new customers is significantly higher than retaining existing ones, maintaining a low Paid Subscription Churn is crucial. This metric helps identify trends in subscription cancellations, enabling businesses to implement strategies aimed at minimizing churn and enhancing customer retention.
Example
In a given period:
Total Active Paid Customers: 600
Number of Paid Subscriptions Canceled: 10
Total Paid Subscription Churn = 10
The total number of paid subscriptions canceled per plan during the period.
Explanation of metric
This metric tracks the total number of paid subscriptions that were canceled for each specific plan during a given period. It is visualized using a stacked bar chart, allowing for a clear comparison of cancellations across different plans. This segmentation helps in understanding which plans are experiencing higher churn rates.
How it's measured
Total Paid Subscription Churn by Plan = Total number of paid subscriptions canceled per plan during the period.
Cancellations that occur within the same activation period are excluded from this metric.
Reading
A decrease in this metric is favorable, indicating improved retention within specific plans.
Interpretation
Churn rates are a critical indicator of a subscription business's long-term success, as they directly impact revenue. By analyzing churn by plan, businesses can identify which plans are underperforming and take corrective actions to enhance customer retention and revenue stability.
Example
In a given period:
The total number of paid subscriptions canceled per business type during the period.
Explanation of metric
This metric tracks the total number of paid subscriptions canceled during a specific period, segmented by business type. It is visualized using chart, providing a clear comparison of churn across different business types. This segmentation is crucial for understanding which business types are experiencing higher churn rates.
This metric is available only with RevenueStory (RS) premium. To use it effectively, a custom field must be configured at the customer resource level in Chargebee and mapped to the Business Type field in RevenueStory. It is recommended to configure values in this custom field that are meaningful and relevant to your business. For assistance, please connect with your Customer Success Manager or contact support@chargebee.com.
How it's measured
Total Paid Subscription Churn by Business Type = Total number of paid subscriptions canceled per business type during the period.
Cancellations that occur within the same activation period are excluded from this metric.
Reading
A decrease in this metric is positive, indicating improved retention across various business types.
Interpretation
If a significant portion of churn originates from a specific business type, it's essential to assess whether your product is delivering sufficient value to that segment. Different business types have unique factors that influence churn. By understanding these factors, you can develop targeted strategies to reduce churn and enhance customer satisfaction.
Example
In a given period:
The total number of paid subscriptions canceled during the period, segmented by Churn Type (Voluntary or Involuntary).
Explanation of metric
This metric tracks the total number of paid subscriptions that were canceled during a given period, segmented by churn type (voluntary or involuntary). It is represented as a stacked bar chart, allowing for a visual comparison of different churn types. Additionally, a point-in-time KPI is available, indicating the current period's voluntary or involuntary churn, along with the variance from the previous period and the percentage change in churn across these periods.
How it's measured
Total Paid Subscription Churn by Churn Type = Total number of paid subscriptions canceled during the period, segmented by churn type.
Cancellations that occur within the same activation period are excluded from this metric.
Reading
A decrease in this metric indicates a positive trend, suggesting better customer retention.
Interpretation
Understanding the cost dynamics of customer acquisition versus retention, this metric is critical for identifying and addressing the root causes of churn. By segmenting churn into voluntary and involuntary types, businesses can better tailor their retention strategies and improve overall customer satisfaction.
Example
In a given period:
The percentage of Monthly Recurring Revenue (MRR) retained over time from subscriptions that were activated during a specified period.
Explanation of metric
This metric tracks the retention of subscriptions over time, providing insights into how well a cohort of subscribers—those who activated within a specific month—are retained over a subsequent 12-month period. The data is presented in a table format, breaking down the retention rates month by month for a clear view of how the subscription base changes over time.
How it's measured
Subscription Retention Cohort = [(Total Number of Active Subscriptions in a particular month) / (Total Activations during the same activation period)] x 100
Total Activations are calculated based on the subscriptions that were activated during the same activation period.
Reading
There are no specific upward or downward trend indications.
Interpretation
The Subscription Retention Cohort metric is essential for understanding how subscription levels change over time. It serves as a valuable analytical tool for developing robust customer retention strategies, allowing businesses to identify trends and adjust tactics to improve long-term customer loyalty.
Example
The percentage of paid subscriptions canceled during the period.
Explanation of metric
This metric tracks the percentage of paid subscriptions that were canceled within a particular period. It is visualized using a bar chart, providing a clear representation of the churn rate over time. Additionally, a point-in-time KPI is available, which shows the current period's Paid Subscription Churn Rate and compares it to the previous period, highlighting the percentage change between the two periods.
How it's measured
Paid Subscription Churn Rate = (Number of paid subscriptions canceled) / (Total number of paid subscriptions at the beginning of the period) x 100
Cancellations that occur within the same activation period are excluded from this metric.
Reading
A decrease in the Paid Subscription Churn Rate is a positive indicator, suggesting improved customer retention and successful subscription retention strategies.
Interpretation
A high Paid Subscription Churn Rate can severely impact a business's profitability and return on investment (ROI). As a crucial metric for subscription-based businesses, the churn rate serves as a key predictor of long-term success, helping companies understand the effectiveness of their retention strategies and identify areas for improvement.
Example
In a given period:
The percentage of paid subscriptions canceled during the period, segmented by Country.
Explanation of metric
This metric tracks the percentage of paid subscriptions that were canceled within a specific period, segmented by country. The data is visualized using a chart, which allows for a comparison of churn rates across different countries, helping businesses identify regions with higher churn.
How it's measured
Paid Subscription Churn Rate by Country = (Total number of canceled paid subscriptions) / (Total number of paid subscriptions) x 100 per country
Reading
An upward trend in this metric is negative, indicating an increase in churn and potential retention issues in specific countries.
Interpretation
The customer churn rate by country is a valuable metric for understanding the average life expectancy of subscribers in different regions. Since the churn rate is inversely proportional to customer life expectancy, a higher churn rate suggests a shorter average duration of customer subscriptions, indicating a need for targeted retention strategies in specific countries.
Example
In a given period:
The percentage of paid subscriptions canceled during the period, segmented by Churn Type (Voluntary or Involuntary).
Explanation of metric
This metric measures the percentage of paid subscriptions canceled during a specific period, broken down by churn type (e.g., voluntary and involuntary). It is visualized using a chart, which shows the distribution of cancellations by churn type. Additionally, a point-in-time KPI is available, showing the current period's churn rate by churn type and comparing it to the previous period, including the percentage change across both periods.
How it's measured
Paid Subscription Churn Rate by Churn Type = [(Number of paid subscriptions CANCELLED for a given churn type) / (Total number of paid subscriptions at the beginning of period )] x 100.
Cancellations that occur within the same activation period are excluded from this metric.
Reading
A decrease in this metric is positive, indicating improved retention by reducing both voluntary and involuntary churn.
Interpretation
A high Paid Subscription Churn Rate by churn type can undermine the business's ability to earn profit and negatively impact return on investment (ROI). Understanding churn rates segmented by churn type helps identify which type of churn is more prevalent and informs targeted strategies to address retention issues.
Example
In a given period:
The percentage of subscriptions canceled during a specific period.
Explanation of metric
This metric tracks the percentage of subscriptions that were canceled within a given period. It is visualized using a trend line to show the percentage of customers lost or who stopped paying for your product or service over time. Additionally, a point-in-time KPI is available, representing the current period's churn rate and comparing it with previous periods, including the variance and percentage change in churn.
How it's measured
Total Subscription Churn Rate = [(Number of subscriptions cancelled during the period) / (Number of Subscriptions ACTIVE in the beginning)] x 100
Subscriptions canceled in the same period as they were activated are excluded.
Reading
A decrease in this metric is favorable, indicating improved customer retention.
Interpretation
A high churn rate can undermine a business's ability to profit and negatively impact its return on investment (ROI). As a crucial metric for subscription-based businesses, the churn rate is a significant predictor of long-term success and helps in evaluating the effectiveness of customer retention strategies.
Example
In a given period,
The percentage of Monthly Recurring Revenue (MRR) lost from canceled subscriptions.
Explanation of metric
This metric measures the rate at which revenue is lost due to canceled subscriptions. It is a point-in-time indicator that reflects the percentage of MRR lost from subscriptions that were canceled during a specific period. This metric helps in understanding the impact of churn on revenue and can guide decisions on pricing and plan optimization.
How it's measured
Cancellation MRR Rate =[(Total MRR of Churned Subscriptions during a period) / (MRR at the beginning of that period)] X 100.
Cancellations within the same month of Activation are not included.
Reading
A decrease in this metric is favorable, indicating lower revenue loss from cancellations.
Interpretation
The Cancellation MRR Rate helps identify which plans contribute most significantly to churn, providing insight into the revenue impact of cancellations. This metric is valuable for evaluating the need to optimize current pricing strategies and improve overall retention efforts.
Example
In a given period:
The percentage of Monthly Recurring Revenue (MRR) lost from voluntary or non-voluntary canceled subscriptions, segmented by churn type.
Explanation of metric
This metric measures the rate at which revenue is lost from subscriptions canceled during a specific period, broken down by churn type (e.g., voluntary and involuntary). It is visualized using a trend line chart to show the percentage of MRR lost from each churn type over time. Additionally, it serves as a point-in-time indicator of revenue loss from canceled subscriptions.
How it's measured
Cancellation MRR Rate by Churn Type = [(Cancellation MRR for a particular churn type during the period / Total MRR at the beginning of the period)] x 100
Reading
A decrease in this metric is favorable, indicating reduced revenue loss from cancellations.
Interpretation
The Cancellation MRR Rate by Churn Type helps identify which type of churn—voluntary or involuntary—contributes more significantly to revenue loss. This insight is crucial for optimizing pricing strategies and improving retention efforts to address the underlying causes of churn.
Example
In a given period:
The percentage of Monthly Recurring Revenue (MRR) lost from canceled subscriptions.
Explanation of metric
This metric tracks the reduction in Monthly Recurring Revenue from existing subscriptions due to cancellations. It is visualized using a trend line to show changes in MRR over time, reflecting how cancellations impact revenue. Additionally, a point-in-time KPI is available, which represents the current period's Total MRR Churn Rate and shows the percentage change in MRR Churn between the current and previous periods.
How it's measured
Total MRR Churn Rate = [(Cancellation MRR) / (MRR at the beginning of the period)] x 100
This metric does not include downgrades.
Reading
A decrease in this metric is favorable, indicating improved revenue retention.
Interpretation
The Total MRR Churn Rate helps monitor the health of the business by assessing the impact of cancellations on revenue. It distinguishes between voluntary churn (e.g., customer dissatisfaction) and involuntary churn (e.g., expired credit cards). Understanding this metric can guide efforts to reduce churn and improve overall customer retention.
Example
In a given period:
Number of Customers on Plan A ($20/month) Canceled: 100
The net percentage change in Monthly Recurring Revenue (MRR) over time.
Explanation of metric
This metric measures the overall growth rate of Monthly Recurring Revenue by accounting for both revenue expansion and contraction. It is visualized using a trend line that shows how MRR changes for existing subscriptions at the end of a given period.
How it's measured
Net MRR Growth Rate = {(New MRR + Reactivation + Upgrade + Free to paid MRR + Resumed MRR + MRR impact due to Exchange rate fluctuation) - (Cancellation MRR + Downgrades )+ Active to Trial MRR)/(MRR at the beginning of period)} * 100
Reading
A higher rate indicates positive revenue growth, which is favorable.
Interpretation
The Net MRR Growth Rate helps gauge the business's growth performance by capturing both revenue gains and losses. Industry experts generally consider a Net MRR Growth Rate of 10-20% to be strong, indicating healthy business expansion and retention.
Example
In a given period:
The total number of subscriptions that are activated and canceled within the same period.
Explanation of metric
This metric tracks the number of subscriptions that are both activated and canceled within the same billing period. It is visualized using a table to show these cancellations clearly.
How it's measured
Total Same Period Cancellations = Total Number of Subscriptions CANCELLED within the same period of Activation.
Reading
Higher numbers indicate a higher rate of same-period cancellations, which may indicate issues with product understanding or quality.
Interpretation
This metric is tracked separately from regular cancellation metrics because same-period cancellations often reflect issues such as poor product fit or misleading information. High rates may indicate that customers are not finding value or have been misled about the product.
Example
In a given period:
The expected loss in Monthly Recurring Revenue (MRR) due to subscriptions that are scheduled to be canceled in the future.
Explanation of metric
This metric forecasts the total MRR that will be lost from subscriptions scheduled for cancellation in future periods. The anticipated revenue loss is visualized using a table.
How it's measured
Total Scheduled Cancellation MRR = Total MRR of subscriptions scheduled for future cancellation
Reading
A decrease in this metric is favorable, indicating reduced future revenue loss.
Interpretation
An increase in Scheduled Cancellation MRR suggests future revenue loss due to planned cancellations. To mitigate this, consider enhancing product value or offering incentives to retain customers. Additionally, efforts to reduce overall revenue leakage will help lower the Scheduled Cancellation MRR.
Example
In the next month:
The total number of subscriptions scheduled to be canceled during a future period.
Explanation of metric
This metric tracks the number of subscriptions that are planned for cancellation in an upcoming period. It is visualized using a table that displays these scheduled cancellations clearly.
How it's measured
Total Scheduled Cancellations = Total number of scheduled subscription cancellations for the future period
Reading
A decrease in this metric is favorable, indicating fewer future cancellations.
Interpretation
An increase in Scheduled Cancellations may signal issues such as decreased product demand, competition, limited product value, or higher pricing. It is important to assess the potential MRR loss associated with these cancellations and implement strategies to reduce them, such as improving product value or offering competitive pricing.
Example
In the upcoming period:
The total Monthly Recurring Revenue (MRR) lost due to canceled subscriptions.
Explanation of metric
This metric measures the reduction in MRR resulting from cancellations of existing subscriptions. It is visualized using a trend line to show how MRR decreases over time due to these cancellations. A point-in-time KPI is also available, indicating the current period's Total MRR Churn and showing the variance and percentage change compared to previous periods.
How it's measured
Total MRR Churn = Cancellation MRR
Reading
A decrease in this metric is favorable, indicating less revenue loss from cancellations.
Interpretation
Total MRR Churn provides insight into the overall health of the business. It helps identify whether the churn is voluntary (customers canceling due to dissatisfaction or perceived lack of value) or involuntary (such as cancellations due to expired credit cards). Monitoring this metric is crucial for understanding and improving customer retention strategies.
Example
In a given period:
The gross Monthly Recurring Revenue (MRR) lost from subscriptions that are paused, canceled, or downgraded.
Explanation of metric
This metric measures the reduction in MRR due to subscriptions moving from a paid plan to a lower or free plan, cancellations, or removal of add-ons and services. It is visualized using various charts, including Spline, Line, Bar, Stacked Bar, 100% Stacked Bar, KPI, Area Spline, and Area charts. A point-in-time KPI is also available, showing the current period's Gross MRR Churn and comparing it to previous periods, highlighting the percentage change.
How it's measured
Gross MRR Churn = Downgrade MRR + Cancellation MRR + Paused MRR + Active to Trial MRR
Reading
A decrease in this metric is favorable, indicating reduced revenue loss from churn.
Interpretation
Gross MRR Churn is crucial for understanding overall revenue loss and identifying areas where customer retention and satisfaction can be improved. It emphasizes the direct impact of churn on MRR, guiding strategies to enhance customer retention and minimize revenue leakage.
Example
In a given period:
The total Annual Recurring Revenue (ARR) lost from canceled subscriptions.
Explanation of metric
This metric measures the total revenue loss from subscriptions that have been canceled, extrapolated to an annual figure. It is represented using a chart to show the ARR Churn over time. This metric helps monitor the overall health of the business and provides insights into revenue lost due to churn.
How it's measured
Total ARR Churn = 12 x Total MRR Churn
Total MRR Churn = Cancellation MRR
Reading
A decrease in this metric is favorable, indicating reduced annual revenue loss from cancellations.
Interpretation
Total ARR Churn provides a comprehensive view of revenue loss on an annual basis. It helps to identify whether churn is voluntary (due to customer dissatisfaction) or involuntary (due to issues like expired credit cards). Understanding this metric is crucial for assessing the long-term financial impact of churn and formulating strategies to improve customer retention.
Example
In a given period:
The total Annual Recurring Revenue (ARR) lost from paused, canceled, or downgraded subscriptions, segmented by subscription plan.
Explanation of metric
This metric measures the ARR lost due to churn, broken down by subscription plan. A chart visualizes the Gross ARR churn for each plan, showing how revenue loss is distributed across different plans.
How it's measured
Total ARR Churn by Plan = 12 x Gross MRR Churn by Plan
Gross MRR Churn by Plan = Cancellation MRR per Plan
Reading
A decrease in this metric is favorable, indicating reduced annual revenue loss from cancellations for a specific plan.
Interpretation
Total ARR Churn by Plan helps monitor the revenue impact of churn across different subscription plans. It provides insights into whether churn is voluntary (due to dissatisfaction) or involuntary (e.g., expired credit cards). This metric is crucial for understanding the financial impact of churn at the plan level and for identifying areas where customer retention efforts can be targeted.
Example
In a given period:
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