Definition
The percentage of recurring revenue lost to cancellations and downgrades in a period.
Formula
MRR lost to churn & downgrades in period / MRR at start of period x 100
How to measure
Sum the MRR lost from cancelled and downgraded accounts during the period and divide by the MRR that existed at the start of the period.
Why track it
Revenue churn can differ sharply from customer churn if large accounts leave while small ones stay, and it more directly threatens the P&L.
Example
A company starts the month with $200,000 MRR and loses $8,000 to churn and downgrades, a 4% revenue churn rate.
FAQ
- What is Revenue Churn Rate?
- The percentage of recurring revenue lost to cancellations and downgrades in a period.
- How do you calculate Revenue Churn Rate?
- MRR lost to churn & downgrades in period / MRR at start of period x 100
- Why track Revenue Churn Rate?
- Revenue churn can differ sharply from customer churn if large accounts leave while small ones stay, and it more directly threatens the P&L.