Customer Movements happen in the real world in form of
- Customer Churn - tells you how good you are at retaining customers. Customers do not renew their contracts and leave
- Upgrades & Downgrades - Customers can move between plans by upgrade e.g. they move from a free basic plan to a paid plan, or by downgrading, e.g. they upgrade from a a paid plan to less expensive or free plan.
It is Upselling which matters. If you're able to upsell your customers onto higher-value packages, and sell additional recurring seats/users/storage, you can combat the effects of customer churn.
Learn how to
For each revenue stream, the table below lists
- which input field defines the Contract Duration
- what the default value for the Contract Duration in Month is
- what the default value for the Customer Churn Rate upon Renewal is
(units, customers, sales teams and sales partners) and provides examples on how they can impact cost.
|Revenue Model||Contract Duration determined by ...||Default Value for "Contract Duration in Months"||Default Value for "Customer Churn Rate upon Renewal"|
|Service Model||Field "Average Contract Duration"||1||100%|
|Subscription||Field "Billing Period"||
Monthly = 1 mths
|License||Field "Average Contract Duration"||36 months||0%|
|Transaction||Field "Average Contract Duration"||36 months||0%|
The Churn Rate over Contract Period can be be converted to a Monthly Churn Rate:
- Monthly Churn Rate % = 1 - (( 1 - ChurnRateUponRenewal% ) ^ (1/ContractDuration))
to be done
Follow the links below to dive into more detail on how to add Revenue related cost linked to getting, keeping and growing customers, in particular