What is Revenue Churn Rate?
RCR measures losses from existing customers at the end of regular periods.
How to Calculate (monthly) Revenue Churn Rate?
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RCR = {[(MRR0 – MRR1) + MRR downgrades] – MRR upgrades} / MRR0
Analyzing the Causes of Revenue Churn
RCR is a metric that measures changes in customer spending. Revenue churn may be caused by order cancellations or plan downgrades, among other changes in customers’ behavior.
RCR is an important metric for you to understand, because it describes how much money you are losing (or not earning) after acquiring new customers.
Did you extract all the revenue from that departing customer?
MRR = Monthly Recurring Revenue
- Set monthly intervals
- Determine your monthly recurring revenue
- Calculate paid upgrades and downgrades
Example of Monthly Customer Churn Rate
- January MRR0 $100
- January MRR1 $97
- January downgrades $1
- January upgrades $2
- NET {[(100 – 97) + 1] – 2} / 100
- 2% (0.02)
Did you know that negative churn is called growth?
How to Reduce Revenue Churn Rate?
There is no simple answer, but I may find one on your behalf by researching, asking one or three experts and asking my AI as well.
The answer can be public or private.
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