Quick Answer (TL;DR)
Churned MRR measures revenue lost from cancellations. The formula is Sum of revenue from churned customers. Industry benchmarks: <2% of total MRR monthly. Track this metric when quantifying revenue impact of churn.
What Is Churned MRR?
Revenue lost from cancellations. This is one of the core metrics in the revenue metrics category and is essential for any product team serious about data-driven decision making.
Churned MRR connects product performance to business sustainability. Revenue metrics translate user behavior into financial outcomes, making them essential for board reporting, investor communication, and strategic planning.
Understanding churned mrr in context --- alongside related metrics --- gives you a more complete picture than tracking it in isolation. Use it as part of a balanced metrics dashboard.
The Formula
Sum of revenue from churned customers
How to Calculate It
Aggregate the relevant events over your chosen time period (daily, weekly, or monthly). For example, if you count 12,500 events in a week, your churned mrr is 12,500 per week. Track this consistently to identify trends.
Benchmarks
<2% of total MRR monthly
Benchmarks vary significantly by industry, company stage, business model, and customer segment. Use these ranges as starting points and calibrate to your own historical data over 2-3 quarters. Your trend matters more than any absolute number --- consistent improvement is the goal.
When to Track Churned MRR
When quantifying revenue impact of churn. Specifically, prioritize this metric when:
You are building or reviewing your metrics dashboard and need revenue indicators
Leadership or investors ask about revenue performance
You suspect a change in product, pricing, or go-to-market strategy has affected this area
You are running experiments that could impact churned mrr
You need a quantitative baseline before making a strategic decision
How to Improve
Optimize pricing regularly. Most companies set pricing once and forget it. Review pricing quarterly, test willingness to pay, and ensure your pricing reflects the value you deliver.
Focus on expansion revenue. Growing revenue from existing customers is 5-7x cheaper than acquiring new ones. Build upgrade paths, usage-based pricing tiers, and cross-sell opportunities.
Reduce involuntary churn. Failed payments account for 20-40% of SaaS churn. Implement dunning flows, card update reminders, and retry logic to recover revenue automatically.
Common Pitfalls
Not normalizing for time period. Revenue metrics must be calculated over consistent time periods. Comparing a 28-day month to a 31-day month without normalization creates misleading trends.
Ignoring revenue quality. Not all revenue is equal. Revenue from customers likely to churn, deeply discounted deals, or one-time contracts should be weighted differently than high-quality recurring revenue.
Measuring without acting. Tracking this metric is only valuable if you have a process for reviewing it regularly and a playbook for responding when it moves outside acceptable ranges.
Related Metrics
Expansion MRR --- additional revenue from existing customers (upsells, cross-sells)
Quick Ratio (SaaS) --- ratio of revenue growth to revenue loss
New MRR --- revenue from newly acquired customers
Gross Margin --- revenue remaining after cost of goods sold
Product Metrics Cheat Sheet --- complete reference of 100+ metrics