What is Gross MRR Churn Rate?
Why Gross MRR Churn Rate Matters for SaaS Businesses
Gross MRR churn rate shows exactly how much revenue you lose from existing customers each month. This gives RevOps teams an unfiltered view of retention performance without expansion revenue masking underlying problems. Monitoring this metric helps identify churn drivers before they escalate.
Key benefits for RevOps teams include:
Early warning system: Spot retention issues before they impact growth targets
Clear accountability: Separate customer success performance from sales expansion efforts
Accurate forecasting: Build more reliable revenue projections without expansion bias
Calculating Gross MRR Churn Rate
Gross MRR Churn Rate = [(Downgrade MRR+ Cancellation MRR) / (Total MRR at the beginning of the period)] * 100
Key components you'll need:
Downgrade MRR: Revenue lost from customers moving to lower-priced plans
Cancellation MRR: Revenue lost from customers who fully canceled
Starting MRR: Total monthly recurring revenue at the beginning of the measurement period
Interpreting Gross MRR Churn
The overall contraction in the MRR can be due to downgrades or cancellations. If this is high, a business should try to understand the reason for the cancellations taking place. This can be voluntary churn, where dissatisfied customers cancel due to a lack of perceived value. It can also be involuntary churn, where a subscription is canceled because a customer's credit card expires.
To handle involuntary churn, it's good hygiene to track credit card expiry dates and notify customers ahead of time. Good billing management systems offer this feature out of the box. Another way to battle involuntary churn is by setting up an effective dunning process — gentle, timely reminders for payment.
Not all churn is negative. For example, a drop in monthly recurring revenue from customers moving to an annual plan indicates higher commitment. This shift ultimately improves long-term value and retention.
Industry Benchmarks and What's Considered Good
Gross MRR churn benchmarks vary significantly by market segment and company maturity:
Enterprise SaaS | ||
SMB SaaS | 2-5% | 24-60% |
Early-stage startups | 5-10% | 60-120% |
According to a 2025 industry report, 53% of SaaS businesses cite customer retention as their top priority. Focus on trend direction rather than absolute numbers — consistent improvement matters more than hitting perfect benchmarks.
Gross MRR Churn vs. Net MRR Churn
It is crucial to distinguish between gross and net MRR churn. Gross MRR churn only measures lost revenue from cancellations and downgrades. It represents the total revenue lost from your customer base.
Net MRR churn, on the other hand, subtracts expansion MRR (from upgrades and add-ons) from your churned MRR. While a low net churn rate is positive, a high gross churn rate can hide serious retention problems, even if net churn looks healthy. RevOps leaders must monitor both to get a complete picture of revenue dynamics.
Related SaaS Metrics to Track Alongside Gross MRR Churn
RevOps teams should track gross MRR churn alongside these connected metrics:
Net MRR churn: Shows overall revenue impact after accounting for expansion
Customer churn rate: Reveals if you're losing many small customers or a few large ones
Expansion MRR: Measures revenue growth from existing customers
Average revenue per account (ARPA): Measures the average revenue generated from each customer account, helping to identify which segments drive the highest churn impact
A unified revenue platform automates this reporting, giving you the clarity to make strategic decisions. See how Chargebee helps you monetize with confidence — book your personalized demo today.
Frequently Asked Questions About Gross MRR Churn Rate
Defining a good gross churn rate
Enterprise SaaS should target under 1% monthly, while SMB SaaS typically sees 2-5%. Focus on maintaining a stable or decreasing trend over time.
The relationship between churn and retention
Yes, they're mathematical inverses. If your gross revenue retention is 95%, your gross MRR churn rate is 5%.
Gross MRR churn vs. customer churn rate
Customer churn counts lost customers; MRR churn measures lost revenue. Losing 1 $50K enterprise account impacts MRR churn more than losing 10 $100 SMB accounts.
Additional reads
What is Net MRR Churn Rate?: Understand how expansion revenue impacts your overall churn calculation.
Churn Analysis: Understanding Why Customers Leave: Step-by-step guide to analyzing churn patterns and boosting retention.
The Ultimate Guide to Revenue Operations: See how to drive efficiency into your RevOps with our extensive guide.
The Ultimate Guide to Revenue Operations: See how you can drive efficiency into your RevOps with our extensive guide. Download Guide
