Formula
Sum of MRR decreases from existing customers in a period
How to measure
Compare each existing customer's MRR at the start and end of the period, summing only the negative changes among still-active accounts.
Why track it
Contraction MRR is an early warning sign, since customers who downgrade rather than churn outright often churn fully soon after.
Example
A company reports $3,000 in contraction MRR from five accounts reducing their seat count.