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Churn MRR

Finance

What is Churn MRR?

Churn MRR is MRR lost from customers that completely cancelled their subscription. Unlike Churn Rate, which measures the proportion of customers lost, this metric focuses on the financial impact of customer churn. It's an essential metric for subscription-based businesses, as it directly affects the company's revenue and growth projections.

How is Churn MRR used?

This metric is useful for understanding the rate customers cancel subscriptions. It's normal for Churn MRR to grow over time as MRR increases, but it should not outpace the rate of growth in MRR.

How to calculate Churn MRR

Average Churn MRR x # Churned Customers

To calculate Churn MRR, multiply the average Churn MRR by the number of churned customers.

Best Practices

Three leading causes of churn together account for >50% of SaaS churn on average: poor onboarding, weak customer relationship building, and poor customer service. Be proactive with communication and education around your product. Invest in offering effective customer support to address issues and provide excellent customer service. If a customer churns, make an effort to deeply understand why they churned. Generally, spending resources on retaining current customers has a higher ROI than spending resources on acquiring new ones.

Common Misconceptions

Don't underestimate the compounding nature of Churn. It not only affects current revenue but also eliminates future opportunities to upsell or cross-sell to those customers. Churn represents not only the loss of a single transaction but the remainder of a customer's LTV.

"Smart companies have realized that customer loyalty is the most powerful sales and marketing tool that they have."

Bill Price
/
Founder, Driva Solutions

Your most unhappy customers are your greatest source of learning.

Bill Gates
/
Co-Founder, Microsoft

FAQs

What are the main drivers of Churn MRR?
  • Customer support quality
  • Customer relationship quality
  • Onboarding effectiveness
  • Product quality
  • Product pricing
How should I break down Churn MRR?
  • Industry vertical
  • Geography
  • Company size
  • Product
  • Acquisition channel
  • Usage patterns

Supported Integrations

Get this metric directly out of one of our supported integrations.

Related Metrics

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