What is Cancellation MRR Rate metric in RevenueStory?

Modified on: Thu, 2 Sep, 2021 at 12:18 PM

Percentage of Monthly Recurring Revenue lost from CANCELLED Subscriptions.
Explanation of metric

Point in time indicator of the rate at which Revenue is lost from CANCELLED Subscriptions.

How it's measured
Cancellation MRR Rate = [(Total MRR of Churned Subscriptions during a period) / (MRR at the beginning of that period)] X 100.


Note: Cancellations within the same month of Activation are not included.


Reading

Down: Good

Interpretation
  • Cancellation MRR helps to identify the plan that contributes to the highest Churn. It is a good indicator to determine the need for optimizing current pricing.
  • Example: In a given period, 200 Customers are on Plan A ($10/month). 15 Customers unsubscribe the service during the next billing cycle.
    Total MRR of Churned Subscriptions during a period = (15 X 10) = $150,
    MRR at the beginning of that period = 200 X 10 = $2,000,
    Cancellation MRR Rate = [(150 / 2000) X 100] = 7.5%.

Click here to read about other metrics.

M
Monica is the author of this solution article.

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