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

 

Add Customer Churn upon Contract Renewal

Customer churn (also known as "Logo Churn") measures the rate at which your existing customers do not renew their contracts/subscription to your service. 
As customers can only churn after a contract expires and you can set different contract duration for your revenue streams, Lean-Case captures the Customer Churn upon Contract Renewal.
 

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
Quarterly = 3 mths
Yearly = 12 mths

0%
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))

 

 

Add Upgrades and Downgrades

to be done



Related Categories 

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