Confused about customer churn vs. revenue churn?
Churn means lost money or lost customers. These metrics help you understand two different things:
Customer churn = customers lost. Revenue churn = money lost.
But which of these churn metrics should you use? This article will cover everything you need to know about customer churn vs. revenue churn.
Track churn metrics with greater precision with Baremetrics, the powerful metrics dashboard for data-driven subscription and SaaS businesses everywhere. Get started for free.
Customer churn measures the number of delinquent customers over a specific period. In most contexts, delinquent customers are customers who:
Example: Your company has 100 customers who pay for subscriptions, but 10 customers cancel their subscriptions in the last 30 days. Your customer churn rate is 10 percent.
Read more: What is Negative Churn? (And How to Achieve It)
Revenue churn measures the amount of lost gross revenue over a specific period. In most contexts, revenue means Monthly Recurring Revenue (MRR) — the revenue your business expects to receive over 30 days.
Example: Your company has 90 customers who pay $1 a month for a subscription and 10 customers who pay $100 a month for a subscription. (Your MRR is $1,090.)
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Calculating customer churn vs. revenue churn lets subscription and SaaS companies like yours compare churn from month-to-month.
You can also compare customer churn every year.
Read more: What is Net Revenue Churn? (And How Does It Impact Your Business?)
Understanding both customer churn and revenue churn is critical because both metrics provide value.
Simply put, using both metrics tells you how many customers have left your business and how much money these customers took with them.
Want to Reduce Your Churn?
Baremetrics measures churn, LTV and other critical business metrics to help you retain more customers.
Want to try it for yourself?
You can prevent churn by identifying key insights you need to make profitable decisions that propel the business forward. Baremetrics generates daily, weekly, or monthly email reports with the following metric benchmarks:
Tracking subscription and SaaS metrics helps you:
In particular, Recover by Baremetrics keeps track of when customers’ credit cards are due to expire so you can contact customers and encourage them to update their card details. This way, customers never miss a payment.
Recover from Baremetrics is the simple way to prevent customers on monthly and annual subscription plans from churning, making it an invaluable tool for your business. Try it free.
Tracking customer churn and revenue churn provides your business with unparalleled insights into how your customer base behaves. Using both metrics tells you:
Daily, weekly, and monthly reports and Recover from Baremetrics are two features of many that help prevent customers from churning in the first place.
Identify what’s happening today and make changes that promote growth with Baremetrics, the leading metrics dashboard for your subscription or SaaS business. Start your free trial today!