Revenue

What is Reactivation MRR?

Reactivation MRR is the monthly revenue earned from previously churned or canceled subscriptions that are reactivated during the month.

Note: This does not include subscription plans that were upgraded from a free trial to a paid plan (or from a basic plan to a premium plan). That's called upgrade MRR




How is reactivation MRR calculated?


Reactivation MRR is a key metric for subscription businesses and should be reviewed on a monthly basis, if possible. This will give you valuable insights into how your customers see your product, which can inform future marketing and sales campaigns. 


Thankfully, this only requires a simple revenue calculation:


Reactivation MRR = Sum of MRR from customers that previously churned


For instance, if a canceled subscription is reactivated in a pricing plan of MRR $150 then the reactivation MRR would be $150.




What does reactivation MRR mean for your business?


Reactivation MRR can indicate that your customers felt their needs were better met by a competitor, but for various reasons, decide to come back. Or, it can mean they no longer had the need for your product or service but saw it resurface again.


Every reactivation is a case study opportunity. You should try to proactively control this by asking customers why they cancel when they do. It will show you an angle of your product or service's value you probably missed.


If you observe your reactivation MRR rising, you may want to look into marketing or customer success campaigns targeted at bringing dead customers back to life.


While this may be a good thing, it's worth looking into the cost of reactivation as well. Throwing in hefty discounts to get back individuals who aren't a product-market-fit could be a drain on your resources in the short run. It could also raise your customerchurn rate in the long run.


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