Churn Analytics

Using and Understanding Advanced Billing Churn Analytics Reports

Churn Analytics are available from the “Insights” tab, within the “Churn Analytics” sub-tab.

Churn Analytics Webinar

For a brief overview of what the Churn Analytics report offers, we recommend viewing an archived copy of our webinar that was showcased upon release of the feature. You can access the video below:

MRR Churn Chart and Table

The “MRR Churn” chart and table break down your churn numbers across different categories. It is important to note that churn only looks at your existing paying customer base, excluding new business.

• Subscriber Churn Rate: The rate at which your customers are cancelling their subscriptions, and subscriptions expire. Calculation: Subscriber Churn Count / Start of Period Subscriber Count.
• MRR Churn Rate: The rate at which MRR is lost from canceling or expiring subscriptions. Calculation: Churn MRR / Start of Period MRR.
• Gross MRR Churn: The sum of MRR lost from both canceling or expiring subscriptions and contraction (downgrades). Calculation: Churn MRR + Contraction MRR.
• Gross MRR Churn Rate: The rate at which MRR is lost from both canceling or expiring subscriptions and contraction. Calculation: (Churn MRR + Contraction MRR) / Start of Period MRR
• Net Churn MRR: The sum of MRR lost from canceling or expiring subscriptions and contraction (downgrades) plus gained from expansion (upgrades) and reactivation (cancelled accounts that come back). Calculation: (Churn MRR + Contraction MRR) + (Expansion MRR + Reactivation MRR). Note: Net Churn MRR includes losses and gains from your existing customer base, which means it can be positive. Positive Net Churn MRR indicates the value of your existing customer base is growing without factoring in any new business.
• Net MRR Churn Rate: The rate at which MRR is lost (or gained) from canceled or expired subscriptions and contraction plus gained from expansion and reactivation. Calculation: Net MRR Churn / Start of Period MRR. Note: Because Net MRR Churn Rate is calculated using Net Churn MRR (above), it is the only churn rate that can be negative—commonly referred to as “negative churn.” Negative churn indicates the value of your existing customer base is growing without factoring in any new business.

At the top of the report you can toggle in between charts to visualize each of the key churn metrics above.

Retention Cohorts

The Retention Cohorts table cohort looks at retention over time. You can toggle between MRR retained as a either a percentage or dollar amount OR subscribers retained as either a percentage or number amount.

Please refer to the Understanding Lifetime Value section of this article for more context on how these values are calculated.

Product Filters

Your Churn Analytics can be filtered by product. This allows you to drill in to your product catalog to understand how subsets of products are performing.

Using the “All Products” dropdown, select the product(s) that you wish to filter by. As products are selected, your report will automatically refresh to show an updated report.

FAQ's

What is churn?

Churn is a possible indicator of customer dissatisfaction, cheaper and/or better offers from the competition, more successful sales and/or marketing by the competition, or reasons having to do with the customer life cycle. The churn rate can be minimized by creating barriers which discourage customers to change suppliers (contractual binding periods, use of proprietary technology, unique business models, etc.), or through retention activities such as loyalty programs.

Additional Resources

• Inc. Magazine on Customer Retention.
• Search Harvard Business Review for Customer Retention.
• Loyalty & Customers on Retention.

Understanding Lifetime Value

Customer lifetime value (CLV), or lifetime value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer. It is often used as an indicator of how much can be spent to acquire each customer.

This report provides two indicators of how your customer lifetime value is changing over time. First in the row labeled LTV we provide customer lifetime value assuming a constant value for margin (if you enter it at the left) and retention rate (as estimated that month). This calculation is adapted from Harvard’s “Customer Profitability and Lifetime Value”.

Below this we provide a monthly cohort table displaying customer value-to-date. That is the approximate value each customer, who signed up in a certain month, has contributed at a given age. To calculate this, we use the following formula:

Where P is the product price, S is the total number of subscribers that month, R is the total refunds made that month, and M is the product margin (if entered).

Additional Resources:

• Embracing Lifetime Value by Seth Godin
• KISS Metrics’ on How to Calculate Lifetime Value
• Kellogg School of Management on, “Predicting Customer Lifetime Value — When is it sensible to give perks to customers?”