Formula
Net Revenue Churn = (Revenue Lost - Revenue Gained from Existing Customers) / Initial Revenue * 100
Know your metric
Importance of
Net Revenue Churn
Customer Retention Insight
Net revenue churn provides valuable insights into customer retention and satisfaction, indicating the financial impact of lost customers adjusted for new revenue from existing customers.
Business Health Indicator
Low or negative net revenue churn is a strong indicator of business health and customer loyalty.
Revenue Forecasting
This metric helps in more accurate revenue forecasting by accounting for both churn and growth within the existing customer base.
Drawbacks of
Net Revenue Churn
Complex to Calculate
Net revenue churn can be complex to calculate, especially for businesses with a variety of revenue streams and customer arrangements.
Can Mask Underlying Issues
It can mask underlying issues if new upsells or expansions compensate for lost revenue, potentially leading to strategic complacency.
Sensitive to Market Changes
External market changes can significantly impact net revenue churn, making it a volatile metric that requires contextual interpretation.
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