Value Churn

After all, this type of income is not recurring. It can be useful to further refine your MRR reports by looking specifically at the MRR of new inflowing customers. Is it higher or lower than that of existing customers? You can also visualize how MRR is positively influenced by customers switching to more expensive subscriptions ( expansion MRR ) or negatively affected Value Churn by customer loss ( churn MRR ). We will discuss this last point in more detail shortly. Also read: Subscriptions as a revenue model: 5 tips 2. Customer Acquisition Rate (CAR) It’s good to know that your subscription business model can generate recurring revenue.

Churn cohorts

The question now is whether you are also capable of constantly recruiting new customers, so that the MRR can grow even further. An important metric to look at in this regard is the customer acquisition rate (CAR). The CAR indicates the percentage by which the customer Kuwait Phone Number base increases in a certain period as a result of newly acquired subscribers. In formula: CAR = (number of new customers in period n / total number of customers at the beginning of period n) x 100%. So suppose we start with 500 customers in a given month and we acquire 50 new subscribers that month, then the CAR is (50 / 500) x 100% = 10%.

Value Churn

Volume Churn

A positive CAR means we are able to bring in new subscribers. 3. Volume Churn The natural enemy of acquisition is churn or customer loss. Volume churn refers to the number of lost customers in a given period. There are many methodologies for measuring volume churn, the most basic of which is: Volume churn rate = (number of lost customers in period n / total number of customers at the beginning of period n) x 100%. The relationship between the volume churn rate and the CAR is essential and determines the ability to grow. For example, a monthly CAR of 15% looks impressive, but what happens when the churn rate is 17% over that same period? That’s right: shrinking customer base.

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