the profitwell report: the world’s largest study on churn 18

Updated On: May 23, 2019
No
Main Takeaways:
  • Turns out churn is actually much higher than most companies are willing to admit.
  • Churn only loosely correlates with a company’s size, meaning as a company gets bigger churn tends to get smaller, but only slightly.

Deeper insights into calculating and optimizing MRR/ ARR for SaaS

MRR/ARR is the sum of all subscription revenues that came into your business within a given period. Here are the items that you should include in your MRR/ARR calculations:
 
  1. All recurring elements: This will include any elements of your subscription model that are recurring. For example, any monthly fees or other recurring charges such as per user/seat, per visit, etc.
  2. Account upgrades: Capture the upgrade dollars from current customers who have expanded their use of your product, especially those who have moved up to a higher level plan or who have expanded their use of your value metric.
  3. Account downgrades: This includes the total dollar amount of customers that have downgraded their service. This is important because downgrades represent money lost from current customers that have not churned.
  4. Lost MRR from churned customers: This component is tallying the MRR/ARR that you lost from customers who actually churned, not those who've cancelled.

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis id feugiat odio, et mattis erat. Maecenas vulputate, odio ultricies bibendum bibendum, lectus est sodales enim, a molestie dui ipsum a leo. Nunc fermentum hendrerit posuere. Mauris eget erat placerat, dapibus erat a, pellentesque mauris. Cras sit amet gravida justo. Proin dignissim ante vitae justo gravida, id convallis mi iaculis. Phasellus vitae viverra nisi, id consequat ex. Proin vitae nulla metus.

Etiam eget auctor ligula. Duis hendrerit, massa sed feugiat convallis, nibh justo aliquet sem, nec semper ex ex hendrerit lectus. Vivamus tristique, odio eget tincidunt blandit, arcu lectus hendrerit nisl, vel elementum quam enim id nulla. Maecenas eu arcu quis enim volutpat tincidunt. Quisque quis dapibus quam, non aliquet massa. Fusce aliquam turpis enim, ac porttitor nunc eleifend vitae. Morbi nec diam est. Vivamus ac lectus hendrerit, bibendum ex non, placerat purus.

PWReport-OlofGraphsImages.009

This is a caption about the chart above - Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis id feugiat odio, et mattis erat. Maecenas vulputate, odio ultricies bibendum bibendum, lectus est sodales enim.

Do you want better pricing?

MRR/ARR is the sum of all subscription revenues that came into your business within a given period. Here are the items that you should include in your MRR/ARR calculations. For a larger list of all the items companies are incorrectly excluding or including in MRR, check out this blog post: You're probably calculating MRR incorrectly, here's why.

 

Tags: benchmarks

Want subscription insights and bechmarks sent to your inbox?