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MRR Churn:
Calculating and Optimizing
Price Intelligently’s SaaS Metric Mondays
SaaS MRR ChurnPrice Intelligently
Let’s talk about MRR Churn
MRR Churn
Your SaaS company’s silent killer.
SaaS MRR ChurnPrice Intelligently
MRR =
Monthly Recurring Revenue
Churn =
A measure of attrition or loss
SaaS MRR ChurnPrice Intelligently
MRR Churn =
The monthly erosion of your SaaS monthly recurring
revenue. You can define the metric as an absolute dollar
am...
MRR Churn
Here’s How You Breakdown MRR Churn Visually
(image taken from ProfitWell – free SaaS Metrics dashboard)
SaaS MRR...
All that stuff is great but…why
should you even care?
MRR ChurnSaaS MRR ChurnPrice Intelligently
“Not tracking MRR Churn is like
flying a plane with your fuel tank on
fire”
MRR ChurnSaaS MRR ChurnPrice Intelligently
More specifically…
MRR Churn
Understanding your MRR Churn can help
Identify which aspect of
your product is causing
churn
...
Lets go even deeper and
calculate MRR churn like a
#boss
MRR ChurnSaaS MRR ChurnPrice Intelligently
It’s all about the money leaving
your business
Always remember – with MRR Churn look at the
Cancellations not upgrades or ...
MRR Churn
MRR Churn = ∑ MRR Cancellation + ∑ MRR
Delinquent
OVERALL EQUATION:
MRR Churn
=
MRR
CANCELLATION
1
+ MRR
CANCELL...
MRR Churn
Once you know how to
calculate like a #boss you can
optimize like an even bigger
#SaaS superstar
SaaS MRR ChurnP...
MRR Churn
Here’s how to eliminate as much
MRR Churn as possible:
1. Recover delinquent credit
cards
2. Increase your activ...
MRR Churn
Delinquent credit cards are the biggest piece
of low hanging fruit (~20-40% of MRR
Churn). Put in a system that ...
MRR Churn
This is much easier said than done, but a lot of active
cancellations come from individuals who don’t get hooked...
MRR Churn
Improper pricing can heavily influence your MRR churn, especially
if you don’t have a proper value metric or you...
MRR Churn
You’re likely missing the true reasons folks are leaving your product. Running
proper customer loss surveys that...
MRR Churn
Boom. You’re now an MRR Churn
rock star*.
SaaS MRR Churn
*…or just a normal SaaS aficionado that’s more informed...
MRR Churn
Want real time SaaS Metrics (including MRR
Churn)?
Know and understand your SaaS Metrics
with ProfitWell for fre...
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SaaS MRR Churn: How to calculate and optimize

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MRR Churn threatens your Monthly Recurring Revenue by destroying your MRR momentum. To be successful (and emulate the most successful SaaS businesses in the world) you must calculate and optimize MRR Churn correctly.

Here we walkthrough exactly how to calculate SaaS MRR churn, including what to and not to include in the calculation, as well as how to optimize this crucial SaaS metric.

Published in: Software
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SaaS MRR Churn: How to calculate and optimize

  1. 1. MRR Churn: Calculating and Optimizing Price Intelligently’s SaaS Metric Mondays SaaS MRR ChurnPrice Intelligently
  2. 2. Let’s talk about MRR Churn MRR Churn Your SaaS company’s silent killer. SaaS MRR ChurnPrice Intelligently
  3. 3. MRR = Monthly Recurring Revenue Churn = A measure of attrition or loss SaaS MRR ChurnPrice Intelligently
  4. 4. MRR Churn = The monthly erosion of your SaaS monthly recurring revenue. You can define the metric as an absolute dollar amount ($40,256) or as a percentage (-6.34%) which is more actionable to track over time. MRR Churn Want To See What Your MRR Churn Is Right Now? SaaS MRR Churn Get your free ProfitWell account – 1-click SaaS Metrics >> Price Intelligently
  5. 5. MRR Churn Here’s How You Breakdown MRR Churn Visually (image taken from ProfitWell – free SaaS Metrics dashboard) SaaS MRR ChurnPrice Intelligently
  6. 6. All that stuff is great but…why should you even care? MRR ChurnSaaS MRR ChurnPrice Intelligently
  7. 7. “Not tracking MRR Churn is like flying a plane with your fuel tank on fire” MRR ChurnSaaS MRR ChurnPrice Intelligently
  8. 8. More specifically… MRR Churn Understanding your MRR Churn can help Identify which aspect of your product is causing churn Product Improve projections and financial planning models to account for lost MRR FinanceMarketing Identify channels bringing in crappy/happy customers SaaS MRR Churn See the breakdown of your MRR Churn with ProfitWell >> Price Intelligently
  9. 9. Lets go even deeper and calculate MRR churn like a #boss MRR ChurnSaaS MRR ChurnPrice Intelligently
  10. 10. It’s all about the money leaving your business Always remember – with MRR Churn look at the Cancellations not upgrades or downgrades MRR ChurnSaaS MRR Churn MRR Churn Criteria Breakdown Items to Include Items to Exclude Active Cancellations Upgrades Delinquent Charges Downgrades Price Intelligently
  11. 11. MRR Churn MRR Churn = ∑ MRR Cancellation + ∑ MRR Delinquent OVERALL EQUATION: MRR Churn = MRR CANCELLATION 1 + MRR CANCELLATION 2 MRR CANCELLATION n … MRR DELINQUENT 1 MRR DELINQUENT 2 MRR n DELINQUENT n …+ BREAKDOWN: $1,000 (MRR Churn) =$800 (MRR Cancellations) + $200 (MRR Delinquen EXAMPLE: + SaaS MRR Churn Talk SaaS nerdy to me… Price Intelligently
  12. 12. MRR Churn Once you know how to calculate like a #boss you can optimize like an even bigger #SaaS superstar SaaS MRR ChurnPrice Intelligently
  13. 13. MRR Churn Here’s how to eliminate as much MRR Churn as possible: 1. Recover delinquent credit cards 2. Increase your active users 3. Fix your pricing strategy 4. Run churn loss surveys $ $ $ $ $ $ $ $ $ $ $ $ SaaS MRR ChurnPrice Intelligently
  14. 14. MRR Churn Delinquent credit cards are the biggest piece of low hanging fruit (~20-40% of MRR Churn). Put in a system that can recover those numbers ASAP. Key Optimization #1 Recover Delinquent Credit Cards SaaS MRR ChurnPrice Intelligently
  15. 15. MRR Churn This is much easier said than done, but a lot of active cancellations come from individuals who don’t get hooked into habitually using your product. Obsess over active users. Key Optimization #2 Optimize Your Active Users SaaS MRR ChurnPrice Intelligently
  16. 16. MRR Churn Improper pricing can heavily influence your MRR churn, especially if you don’t have a proper value metric or your customers just don’t match your product’s value with your price. Key Optimization #3 Fix Your Pricing Strategy SaaS MRR ChurnPrice Intelligently
  17. 17. MRR Churn You’re likely missing the true reasons folks are leaving your product. Running proper customer loss surveys that force respondents to choose the biggest reason(s) their leaving will help you identify these reasons real quick. Key Optimization #4 Run Churn Loss Surveys SaaS MRR ChurnPrice Intelligently
  18. 18. MRR Churn Boom. You’re now an MRR Churn rock star*. SaaS MRR Churn *…or just a normal SaaS aficionado that’s more informed and hopefully learned something useful. Price Intelligently
  19. 19. MRR Churn Want real time SaaS Metrics (including MRR Churn)? Know and understand your SaaS Metrics with ProfitWell for free - the most accurate metrics on the market. SaaS MRR Churn Click here to get your free ProfitWell account >> Price Intelligently

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