Docs
You are viewing:
Product Catalog 2.0
Measures the additional Monthly Recurring Revenue (MRR) earned from upgraded, reactivated, and free-to-paid subscriptions.
Explanation of metric
This metric shows the additional MRR generated from existing customers when they upgrade their plans, purchase addons, or transition from free to paid subscriptions. It is a point-in-time indicator of the current Expansion MRR, also displaying variance compared to previous periods and percentage changes across different periods.
How it's measured
Total Expansion MRR = (Increase in Total MRR due to Upgrades) + (Free to Paid MRR) + (Reactivations) + (PAUSE to Paid MRR)
Note:
Does not include IN TRIAL to ACTIVE conversions.
Reading
An increase indicates growing revenue from the existing customer base, signaling successful customer upgrades and conversions.
Interpretation
An increase in Expansion MRR signifies that revenue is growing without the need to acquire new customers. This is a positive indicator of business growth, demonstrating that existing customers are contributing more to revenue through upgrades, addons, or plan transitions. It is advisable to maintain an Expansion MRR higher than the Gross MRR Churn metric to ensure sustainable growth.
Example
In a given period:
Indicates how an existing set of subscriptions that were active 12 months ago has evolved in terms of Monthly Recurring Revenue (MRR) over the current period.
Explanation of metric
A chart visualizes the current MRR of subscriptions that were active 12 months ago and tracks how much their value has expanded or contracted over time. A point-in-time Key Performance Indicator (KPI) reflects Net MRR Expansion for the current period and provides a comparison with the previous period, including percentage changes in MRR.
Note:
This report is available with RS Premium only. Contact your Customer Success Manager or contact support to enable this feature.
How it's measured
Net Dollar Expansion = (Total MRR during the current period) - (Total MRR in the previous period)
Reading
An upward trend indicates growth in MRR from existing customers over time.
Interpretation
This metric helps to track the evolution and growth of the existing customer base over the past 12 months. It is a crucial indicator of customer retention and expansion, providing insight into whether your product is adding more value to customers over time and leading to increased revenue from the same customer set.
Example
In a given period:
Additional Annual Recurring Revenue (ARR) earned from existing subscriptions that have been upgraded, reactivated, or transitioned from free to paid plans.
Explanation of metric
A chart displays the Expansion ARR generated from upgraded subscriptions, free-to-paid conversions, reactivations, and transitions from paused to paid subscriptions. This visualization highlights the total revenue growth from existing customers.
How it's measured
Total Expansion ARR = Expansion MRR x 12
Note:
Expansion MRR = [(Upgrade MRR) + (Free to Paid MRR) + (Reactivation MRR) + (PAUSE To Paid MRR)]
Reading
An upward trend indicates revenue growth from existing customers.
Interpretation
An increase in Total Expansion ARR indicates positive revenue growth from your existing customer base, which is a strong signal that the business is expanding without relying solely on acquiring new customers. To ensure sustainable growth, it is recommended that you maintain a higher Expansion ARR than Gross ARR Churn.
Example
In a given period:
Additional Annual Recurring Revenue (ARR) earned from upgraded, reactivated, and free-to-paid subscriptions, segmented by specific plans.
Explanation of metric
A chart displays the Expansion ARR from existing subscriptions categorized by plan. This visualization helps in understanding which plans are contributing the most to the expansion of ARR.
How it's measured
Total Expansion ARR by Plan = (Expansion MRR by Plan x 12)
Note:
Expansion MRR by Plan = [(Upgrade MRR) + (Free to Paid MRR) + (Reactivation MRR) + (PAUSE To Paid MRR)] per plan
Reading
An upward trend indicates growth in ARR across various plans from existing customers.
Interpretation
An increase in Expansion ARR by Plan signals that customers on specific plans are either upgrading or reactivating their subscriptions, contributing to the growth in ARR. It's important to monitor this metric across different plans to identify which plans are driving the most revenue. Keeping Expansion ARR higher than Gross ARR Churn is crucial for maintaining sustainable business growth.
Example
In Q3, for Plan A:
Expansion MRR (Plan A): $10,000 from upgrades, free-to-paid conversions, and reactivations.
Expansion ARR (Plan A): $10,000 × 12 = $120,000.
For Plan B:
Expansion MRR (Plan B): $18,000.
Expansion ARR (Plan B): $18,000 × 12 = $216,000.
Total Expansion ARR across both plans equals $336,000, indicating strong growth from existing customers upgrading or reactivating their subscriptions. Plan B contributes more to expansion, signaling it may offer more attractive features or incentives for upgrading.
This example shows an annualized revenue increase of $384,000 from specific plans, indicating significant growth from customers using these plans.
Measures the additional Monthly Recurring Revenue (MRR) earned from subscriptions that have been upgraded to higher plans.
Explanation of metric
This metric tracks the MRR generated when subscriptions transition from existing plans to higher-tier plans. A bar chart visualizes the additional revenue attributed to these upgrades, including any revenue from addons added to the subscriptions. A point-in-time KPI reflects the current period's MRR from upgrades and compares it with the previous period, showing the percentage change over time.
How it's measured
Total Upgrade MRR = Total MRR increase due to upgrades of active subscriptions during the period.
Note:
This is calculated in comparison to the previous period.
Reading
A rising upgrade MRR indicates effective scaling of the product and customer growth.
Interpretation
Total Upgrade MRR reflects the revenue growth driven by customers moving to higher pricing plans. An increase in this metric suggests that customers see value in the upgraded plans, indicating successful product scalability. Conversely, if this number is stagnant or declining, it may indicate that customers are receiving too much value from lower-tier plans, which could disincentivize upgrades.
Example
In a given period,
Measures the additional Monthly Recurring Revenue (MRR) earned from upgraded subscriptions, segmented by Customer Type.
Explanation of metric
This metric illustrates the MRR generated when subscriptions transition from existing plans to higher-tier plans for each Customer Type. A stacked bar chart visualizes the increase in MRR, including any additional revenue from addons.
Note:
This metric is available with RS Premium only. To utilize it effectively, a custom field must be configured at the Customer resource level in Chargebee and mapped to the Customer Type in RevenueStory. It's recommended to choose meaningful values relevant to your business for this custom field. For assistance, contact your Customer Success Manager or contact support.
How it's measured
Total Upgrade MRR by Customer Type = Total MRR difference gained from active subscriptions upgraded during the period per Customer Type.
Note:
This is calculated in comparison to the previous period.
Reading
An increasing upgrade MRR for a specific Customer Type indicates effective scaling and customer satisfaction with the product offerings.
Interpretation
An increase in Upgrade MRR for a particular Customer Type signifies that your product is resonating well with those customers. It suggests that having the right features across all plans and continuously adding valuable new features encourages customers to upgrade. Monitoring this metric helps businesses identify successful segments and tailor their offerings accordingly.
Example
In a given period, for Customer Type 1, 75 subscriptions upgraded from Plan A ($35/month) to Plan B ($50/month). Upgrade MRR by Customer Type = 75 x ($50 - $35) = $1,125
Measures the total Monthly Recurring Revenue (MRR) lost from downgraded subscriptions.
Explanation of metric
This metric depicts the reduction in MRR due to subscriptions being downgraded, which may result from the removal of addons or decreases in subscription quantities due to recurring discounts. A trend line visualizes the changes in Downgrade MRR over time. Additionally, a point-in-time KPI indicates the current period's Downgrade MRR, along with variance comparisons to previous periods and percentage changes across different time frames.
How it's measured
Total Downgrade MRR = Total decrease in MRR of active subscriptions due to subscription changes.
Reading
A decreasing Downgrade MRR indicates improved customer retention and satisfaction.
Interpretation
Total Downgrade MRR is a critical financial metric that influences MRR velocity. A high Downgrade MRR suggests that customers may not find sufficient value in their current plans relative to the price they pay, indicating potential issues with product offerings or pricing strategies. Monitoring this metric can help identify areas for improvement to enhance customer satisfaction and retention.
Example
In a given period, a subscription (Customer) has moved from Plan A (MRR $500) to Plan C (MRR $100). Downgrade MRR = $500 - $100 = $400
Measures the total Monthly Recurring Revenue (MRR) lost from downgraded subscriptions, segmented by Customer Type.
Explanation of metric
This metric provides a chart representation of the reduction in MRR due to downgrades, which may result from removing addons or decreasing subscription quantities, categorized by Customer Type. It also considers recurring discounts.
Note:
The metric is available only with RS Premium. To use it more efficiently, you must configure a custom field at the Customer resource level in Chargebee and map it to the Customer Type field in RevenueStory. You can configure and select custom values, but it is recommended to configure values relevant to your business. For setup, contact your Customer Success Manager or contact support.
How it's measured
Total Downgrade MRR by Customer Type = Total decrease in MRR of active subscriptions due to subscription changes per Customer Type.
Note:
Cancellations and subscriptions moved to "IN TRIAL" are not included in this report.
Reading
A decreasing Downgrade MRR indicates improved customer satisfaction and retention across specific Customer Types.
Interpretation
If the Downgrade MRR is high for a particular Customer Type, it suggests that these customers do not perceive enough value in their current plans relative to the price they pay, leading to downgrades. In such cases, consider adding relevant, high-value features to higher-tier plans. Engage with the Customer Success team to gather feedback from these customers and relay insights to the product team for improvements.
Example
In a given period,
Measures the total Monthly Recurring Revenue (MRR) lost from downgraded subscriptions, segmented by Business Type.
Explanation of metric
This metric provides a bar chart representation of the total revenue lost due to downgraded subscriptions for each Business Type. It also accounts for recurring discounts that may influence the downgrade.
Note:
This metric is available only with RS Premium, to use this metric more effectively, you need to configure a custom field at the Customer resource level in Chargebee and map it to the Business Type field in RevenueStory. You can set and select custom values, but it is recommended to configure meaningful values that align with your business. For assistance, connect with your Customer Success Manager or contact support.
How it's measured
Total Downgrade MRR by Business Type = Total decrease in MRR of active subscriptions due to subscription changes per Business Type.
Note:
Cancellations and subscriptions moved to "IN TRIAL" are excluded.
Reading
A reduction in Downgrade MRR indicates improved customer satisfaction and retention across specific Business Types.
Interpretation
If the Downgrade MRR is high for a particular Business Type, it suggests that customers from this segment are not finding sufficient value in their current plans, leading to downgrades. Price changes may also trigger downgrades. In such cases, consider enhancing the value provided in higher-tier plans. Engage the Customer Success team to gather feedback from affected customers, and relay these insights to the product team for potential improvements.
Example
In a given period, an E-Commerce customer downgrades from Plan A (MRR $500) to Plan C (MRR $100). Downgrade MRR by Business Type (E-Commerce) = $500 - $100 = $400.
Total Monthly Recurring Revenue (MRR) lost due to canceled subscriptions.
Explanation of metric
This metric is visualized as a trend line that shows the reduction in MRR due to subscription cancellations. A point-in-time Key Performance Indicator (KPI) also reflects the MRR churn for the current period, comparing it with the previous period and showing percentage change in MRR churn over time.
How it's measured
Total MRR Churn = Cancellation MRR
Reading
A downward trend indicates lower MRR loss from cancellations.
Interpretation
Total MRR Churn is a critical metric for monitoring business health. It highlights the revenue lost to cancellations and helps differentiate between voluntary and involuntary churn.
Example
In a given period:
Gross Monthly Recurring Revenue (MRR) lost due to paused, canceled, or downgraded subscriptions.
Explanation of metric
This metric is visualized through multiple chart types (Spline, Line, Bar, Stacked Bar, 100% Stacked Bar, KPI, Area Spline, Area chart) to depict the reduction in MRR resulting from changes in subscription status, such as cancellations, downgrades, pauses, or transitions from active to trial plans. A point-in-time Key Performance Indicator (KPI) also reflects the Gross MRR Churn for the current period, highlighting the variance with the previous period and showing percentage changes in MRR churn over time.
How it's measured
Gross MRR Churn = Downgrade MRR + Cancellation MRR + Paused MRR + Active to Trial MRR
Reading
A downward trend indicates a reduction in overall revenue loss due to churn.
Interpretation
Gross MRR Churn is crucial for understanding overall revenue loss and areas where customer retention or satisfaction can be improved. This metric captures the comprehensive impact of customer churn on MRR, emphasizing the need for effective strategies to minimize churn, whether through upgrades, retention efforts, or addressing customer pain points.
Example
In a given period:
Downgrade MRR: 50 customers downgraded from a $40/month plan to a $20/month plan. Downgrade MRR = 50 × ($40 − $20) = $1,000.
Paused MRR: 30 customers paused their $30/month subscription. Paused MRR = 30 × $30 = $900.
Active to Trial MRR: 20 customers switched from a $50/month active subscription to a trial with no monthly fee. Active to Trial MRR = 20 × $50 = $1,000.
Cancellation MRR: 100 customers on Plan A ($20/month) CANCELED their subscriptions. Cancellation MRR = 100 × $20 = $2,000.
The Gross MRR Churn for this period is: $1,000 (Downgrade) + $900 (Paused) + $1,000 (Active to Trial) + $2,000 (Cancellation) = $4,900. This total reflects the comprehensive monthly revenue loss across all types of churn.
Tracks the expected loss in Monthly Recurring Revenue (MRR) from subscriptions that are scheduled to be canceled in the future.
Explanation of metric
A table displays the total MRR associated with future cancellations, allowing teams to anticipate potential revenue loss and take proactive measures.
How it's measured
Total Scheduled Cancellation MRR = Total MRR of subscription cancellations that are scheduled in the future.
Reading
A downward trend indicates fewer scheduled cancellations, meaning lower future revenue loss.
Interpretation
A rise in Scheduled Cancellation MRR signals potential future churn, prompting the need for immediate intervention. This could involve offering additional value, providing incentives, or addressing customer concerns to retain at-risk customers. Reducing scheduled cancellations helps prevent future revenue leakage.
Example
For the next month:
Measures the total Monthly Recurring Revenue (MRR) lost due to canceled subscriptions.
Explanation of metric
This metric tracks the total MRR lost when customers cancel their subscriptions. It does not account for the revenue lost from downgrades, only cancellations. It helps in identifying customer churn that impacts the company's revenue and prompts timely actions to reduce further losses.
How it's measured
Total Cancellation MRR = Sum of MRR lost from canceled subscriptions during the period.
Reading
A downward trend indicates a reduction in churn, which is positive for business sustainability.
Interpretation
An increase in Cancellation MRR not only reduces the current revenue stream but also means additional costs to acquire new customers to replace those lost. A rising Cancellation MRR is a warning sign to investigate why customers are canceling, at what point in the customer lifecycle this occurs, and if high-value customers are among those leaving. Understanding these factors can inform strategies to improve retention.
Example
If 5 subscriptions, each generating $100 MRR, were canceled in a month, the Cancellation MRR would be: 5 x $100 = $500
Measures the total Monthly Recurring Revenue (MRR) lost from canceled subscriptions, segmented by country.
Explanation of metric
This metric tracks the MRR lost when customers cancel their subscriptions, broken down by country. It helps businesses identify regions with higher customer churn, offering insights into where cancellations are most prevalent. This metric does not include revenue lost due to customer downgrades, only full cancellations.
How it's measured
Total Cancellation MRR by Country = Sum of MRR lost from canceled subscriptions during the period, segmented by country.
Reading
A downward trend Indicates lower customer churn in specific countries.
Interpretation
This metric helps identify countries where customer churn is highest, enabling the business to take targeted actions. An increase in Cancellation MRR in specific countries could signal issues with product-market fit, regional competition, or customer dissatisfaction. Investigating why customers in these countries are canceling can help inform customer retention strategies and improve localized support.
Measures the total Monthly Recurring Revenue (MRR) lost from canceled subscriptions, segmented by the type of churn (voluntary or involuntary).
Explanation of metric
This metric provides insight into the revenue lost from cancellations based on the reason for churn. A chart displays the MRR lost for each canceled subscription, subcategorized by churn type (voluntary or involuntary). It excludes revenue lost from downgrades and subscriptions canceled within the same activation period.
How it's measured
Total Cancellation MRR by Churn Type = Total MRR of Churned Subscriptions segmented by Churn Type. (voluntary or involuntary).
Note:
Cancellations within the same month of Activation are not included.
Reading
A downward trend indicates fewer cancellations.
Interpretation
This metric helps evaluate product offerings, plan pricing, and onboarding experiences by understanding the causes of customer churn. Voluntary churn suggests customer dissatisfaction with perceived value or service quality, while involuntary churn often points to payment or technical issues. Monitoring and analyzing these churn types can refine retention strategies and address the reasons behind cancellations.
Example
In a given period, 15 customers on a $10/month plan voluntarily churned, and 10 customers on a similar plan churned involuntarily.
Measures the total Monthly Recurring Revenue (MRR) lost from canceled subscriptions, segmented by subscription plan.
Explanation of metric
This metric displays the MRR lost due to subscription cancellations, with each bar in a bar chart representing the revenue lost for a specific subscription plan. However, this metric does not include the Revenue lost when a Customer downgrades.
How it's measured
Total Cancellation MRR by Plan = Total MRR of Churned Subscriptions segmented by Plan.
Note:
Cancellations within the same period of activation are not included.
Reading
A decrease in this metric is favorable and indicates lower churn and better customer retention.
Interpretation
The Total Cancellation MRR by Plan helps businesses understand how well different subscription plans are performing and whether the product offerings, pricing structure, or onboarding experiences are leading to customer dissatisfaction. It's particularly useful for identifying voluntary churn, where customers cancel due to perceived lack of value in a specific plan. Insights from this metric can guide product improvements and plan adjustments.
Example
In a given period, 15 customers from Plan A ($10/month) and 25 customers from Plan B ($15/month) cancel their subscriptions.
Measures the percentage of Monthly Recurring Revenue (MRR) lost from canceled subscriptions during a given period.
Explanation of metric
This metric tracks the rate at which revenue is lost due to canceled subscriptions. It provides a point-in-time indicator of churn, helping businesses understand the impact of cancellations on their recurring revenue. Cancellations within the same period of activation are excluded from this calculation. A lower cancellation rate suggests better customer retention, while a higher rate may indicate issues with product value, pricing, or customer satisfaction.
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 excluded.
Reading
A decreasing cancellation rate indicates improved customer retention and a reduction in lost revenue.
Interpretation
The Cancellation MRR Rate is a key metric for understanding customer churn and its impact on recurring revenue. It helps identify which plans are contributing to the highest churn rates, offering insights into potential areas for improvement, such as pricing optimization or product enhancements. A low cancellation rate suggests that the product is meeting customer needs, while a high rate may signal a need for intervention to retain customers.
Example
In a given period, 200 customers are on Plan A ($10/month).
Measures the percentage of Monthly Recurring Revenue (MRR) lost from canceled subscriptions, segmented by churn type (Voluntary or Involuntary).
Explanation of metric
This metric tracks the rate at which revenue is lost from both voluntary and involuntary cancellations, helping businesses differentiate between customers who choose to cancel (voluntary) and those who are canceled due to reasons like payment failures (involuntary). A chart visualizes the percentage of MRR lost from each churn type. This provides insights into the reasons for cancellations and the potential need for targeted interventions.
How it's measured
Cancellation MRR Rate by Churn Type = [(Cancellation MRR for a particular churn type during the period / Total MRR at the beginning of the period)] x 100
Note:
Cancellations within the same month of activation are excluded.
Reading
A lower cancellation rate for both voluntary and involuntary churn is desirable, indicating better customer retention and fewer lost subscriptions.
Interpretation
This metric helps identify which churn type (voluntary or involuntary) contributes more to revenue loss and is useful for prioritizing actions. For example, voluntary churn might require improvements in customer satisfaction or pricing adjustments, while involuntary churn might indicate a need for better payment recovery strategies. Monitoring this metric helps in optimizing both the product offering and operational processes to reduce churn.
Example
Total active subscriptions at the beginning of the period: 100
The ratio of Monthly Recurring Revenue (MRR) expansion to contraction within a given period.
Explanation of metric
The Quick Ratio is a point-in-time Key Performance Indicator (KPI) that measures the balance between MRR inflow (new subscriptions and expansions) and MRR outflow (downgrades and cancellations). It highlights how efficiently your business is growing by comparing the amount of revenue gained to the amount lost within a specific period.
How it's measured
Quick Ratio = [(New MRR + Expansion MRR) / (Downgrade MRR + Cancellation MRR)]
Note:
Cancellations made in the same month as activation are excluded from this metric.
Reading
An upward trend indicates that the business is growing faster than it's contracting.
Interpretation
The Quick Ratio provides insight into whether the business is expanding or shrinking. A higher ratio indicates that your company is adding more revenue than it's losing. While it is a useful growth indicator, it should be analyzed alongside other financial metrics like Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV) to gain a fuller understanding of overall growth efficiency.
Example
In a given period:
Was this article helpful?