MRR Lost represents MRR lost from churned customers plus MRR lost from customers that have downgraded their subscriptions.
This metric impacts the baseline calculation of predictable revenue and serves as a high-level view of all negative contributions to growth. It can be used to assess the overall health of recurring revenue streams, identify issues leading to churn and contraction, and check how different product packaging affects customer behaviour.
MRR Churn + Contraction
To calculate MRR Lost, add together MRR Churn (the monthly recurring revenue lost from customers who have cancelled their subscriptions) and MRR Contraction (the revenue lost from existing customers who have downgraded their subscriptions).
Break down MRR Lost by customer segments to identify specific at-risk groups. Implement strategies to engage with customers showing signs of potential churn or contraction. Also, regularly gather and analyse customer feedback to understand the reasons behind churn and contraction.
Don't underestimate the compounding nature of MRR Lost. It not only affects current revenue but also the remainder of a customer's LTV.