Customer Churn Notes

Conversion customer
New
month s # of retained customers in month A1 # of retained customers in lifetime month A2 # of churned customers in lifetime month A3 1) The blue values need to be entered. Everything else is
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 calculated automatically.
Jan-13 80 80 75 72 70 69 67 66 66 65 64 80 75 72 70 69 67 66 66 65 64 0 5 3 2 1 2 1 0 1 1
Feb-13 88 88 86 82 78 77 76 73 72 70 88 86 82 78 77 76 73 72 70 0 2 4 4 1 1 3 1 2 2) MRR increases of a cohort in spite of customer churn are the
Mar-13 105 105 103 98 94 92 90 86 82 105 103 98 94 92 90 86 82 0 2 5 4 2 2 4 4 result of "account expansions" – customers paying you more by
Apr-13 110 110 106 102 99 97 92 90 110 106 102 99 97 92 90 0 4 4 3 2 5 2 adding seats, upgrading to a higher plan, buying premium
May-13 115 115 112 105 98 97 96 115 112 105 98 97 96 0 3 7 7 1 1 features etc.
Jun-13 128 128 122 119 115 110 128 122 119 115 110 0 6 3 4 5
Jul-13 137 137 129 122 118 137 129 122 118 0 8 7 4 3) If you want to calculate your CLTV, "costs of good sold"
Aug-13 151 151 145 135 151 145 135 0 6 10 should be subtracted from revenues (payment, hosting, customer
Sep-13 161 161 154 161 154 0 7 service).
Oct-13 168 168 168 0
80 163 263 365 466 580 697 823 955 1,087 4) CACs should be "all in", including sales and marketing
expenses and salaries and all costs associated with customer
acquisition.
% of retained customers in lifetime month B1 % of churned customers in lifetime month (relative to base number) B2 % of churned customers in lifetime month (relative to previous month) B3
0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
5) If you want to know if you're acquiring customers profitably
Jan-13 80 ### 93.75% 90.00% 87.50% 86.25% 83.75% 82.50% 82.50% 81.25% 80.00% 0.00% 6.25% 3.75% 2.50% 1.25% 2.50% 1.25% 0.00% 1.25% 1.25% 0.00% 6.25% 4.00% 2.78% 1.43% 2.90% 1.49% 0.00% 1.52% 1.54%
using your sales & marketing initiatives, include only customers
Feb-13 88 ### 97.73% 93.18% 88.64% 87.50% 86.36% 82.95% 81.82% 79.55% 0.00% 2.27% 4.55% 4.55% 1.14% 1.14% 3.41% 1.14% 2.27% 0.00% 2.27% 4.65% 4.88% 1.28% 1.30% 3.95% 1.37% 2.78%
won via those initiatives in the analysis and exclude all others.
Mar-13 105 ### 98.10% 93.33% 89.52% 87.62% 85.71% 81.90% 78.10% 0.00% 1.90% 4.76% 3.81% 1.90% 1.90% 3.81% 3.81% 0.00% 1.90% 4.85% 4.08% 2.13% 2.17% 4.44% 4.65%
Apr-13 110 ### 96.36% 92.73% 90.00% 88.18% 83.64% 81.82% 0.00% 3.64% 3.64% 2.73% 1.82% 4.55% 1.82% 0.00% 3.64% 3.77% 2.94% 2.02% 5.15% 2.17% 6) For simplicity purposes, this template contains only 10 months
May-13 115 ### 97.39% 91.30% 85.22% 84.35% 83.48% 0.00% 2.61% 6.09% 6.09% 0.87% 0.87% 0.00% 2.61% 6.25% 6.67% 1.02% 1.03% of data. If you have older cohorts, please extend the sheet
Jun-13 128 ### 95.31% 92.97% 89.84% 85.94% 0.00% 4.69% 2.34% 3.13% 3.91% 0.00% 4.69% 2.46% 3.36% 4.35% accordingly.
Jul-13 137 ### 94.16% 89.05% 86.13% 0.00% 5.84% 5.11% 2.92% 0.00% 5.84% 5.43% 3.28%
Aug-13 151 ### 96.03% 89.40% 0.00% 3.97% 6.62% 0.00% 3.97% 6.90% Disclaimer: Please be aware that his model may be inaccurate,
Sep-13 161 ### 95.65% 0.00% 4.35% 0.00% 4.35% incorrect or misleading, use it at your own risk, yada yada yada.
Oct-13 168 ### 0.00% 0.00%
### 96.00% 91.36% 88.07% 86.58% 84.54% 82.25% 80.59% 80.36% 80.00% 0.00% 4.00% 4.70% 3.67% 1.92% 2.21% 2.61% 1.83% 1.79% 1.25% 0.00% 4.00% 4.90% 4.00% 2.17% 2.55% 3.08% 2.22% 2.17% 1.54% Feel free to distribute. If you distribute a modified version, please
make it clear that you've made changes.

MRR Churn
Conversion New If you have any questions or comments:
month MRR Cohort MRR in month C1 Retained MRR in lifetime month C2 MRR churn in lifetime month C3 [email protected]
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
Jan-13 $ 7,851 $7,851 $7,536 $7,234 $6,982 $6,876 $6,780 $6,678 $6,567 $6,454 $6,342 $7,851 $7,536 $7,234 $6,982 $6,876 $6,780 $6,678 $6,567 $6,454 $6,342 $0 $315 $302 $252 $106 $96 $102 $111 $113 $112
Feb-13 $ 7,988 $7,988 $7,688 $7,232 $6,998 $6,890 $6,789 $6,679 $6,589 $6,459 $7,988 $7,688 $7,232 $6,998 $6,890 $6,789 $6,679 $6,589 $6,459 $0 $300 $456 $234 $108 $101 $110 $90 $130
Mar-13 $ 9,234 $9,234 $8,897 $8,678 $8,569 $8,432 $8,352 $8,152 $7,988 $9,234 $8,897 $8,678 $8,569 $8,432 $8,352 $8,152 $7,988 $0 $337 $219 $109 $137 $80 $200 $164 Created by Christoph Janz
Apr-13 $ 10,123 $10,123 $9,657 $9,222 $8,901 $9,201 $9,468 $9,688 $10,123 $9,657 $9,222 $8,901 $9,201 $9,468 $9,688 $0 $466 $435 $321 -$300 -$267 -$220 at Point Nine Capital
May-13 $ 11,788 $11,788 $11,546 $11,321 $11,678 $11,755 $11,868 $11,788 $11,546 $11,321 $11,678 $11,755 $11,868 $0 $242 $225 -$357 -$77 -$113
Jun-13 $ 12,876 $12,876 $12,546 $12,433 $12,399 $12,976 $12,876 $12,546 $12,433 $12,399 $12,976 $0 $330 $113 $34 -$577
Jul-13 $ 13,212 $13,212 $12,756 $13,345 $13,456 $13,212 $12,756 $13,345 $13,456 $0 $456 -$589 -$111
Aug-13 $ 14,789 $14,789 $14,201 $14,897 $14,789 $14,201 $14,897 $0 $588 -$696
Sep-13 $ 15,786 $15,786 $14,988 $15,786 $14,988 $0 $798
Oct-13 $ 16,119 $16,119 $16,119 $0
$7,851 $15,524 $24,156 $33,234 $43,997 $55,883 $67,879 $82,455 $98,149 ###

% of retained MRR in lifetime month D1 % MRR churn in lifetime month D2 % MRR churn in lifetime month (relative to previous month) D3
0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9
Jan-13 $7,851 ### 95.99% 92.14% 88.93% 87.58% 86.36% 85.06% 83.65% 82.21% 80.78% 0.00% 4.01% 3.85% 3.21% 1.35% 1.22% 1.30% 1.41% 1.44% 1.43% 0.00% 4.01% 4.01% 3.48% 1.52% 1.40% 1.50% 1.66% 1.72% 1.74%
Feb-13 $7,988 ### 96.24% 90.54% 87.61% 86.25% 84.99% 83.61% 82.49% 80.86% 0.00% 3.76% 5.71% 2.93% 1.35% 1.26% 1.38% 1.13% 1.63% 0.00% 3.76% 5.93% 3.24% 1.54% 1.47% 1.62% 1.35% 1.97%
Mar-13 $9,234 ### 96.35% 93.98% 92.80% 91.31% 90.45% 88.28% 86.51% 0.00% 3.65% 2.37% 1.18% 1.48% 0.87% 2.17% 1.78% 0.00% 3.65% 2.46% 1.26% 1.60% 0.95% 2.39% 2.01%
Apr-13 $10,123 ### 95.40% 91.10% 87.93% 90.89% 93.53% 95.70% 0.00% 4.60% 4.30% 3.17% -2.96% -2.64% -2.17% 0.00% 4.60% 4.50% 3.48% -3.37% -2.90% -2.32%
May-13 $11,788 ### 97.95% 96.04% 99.07% 99.72% ### 0.00% 2.05% 1.91% -3.03% -0.65% -0.96% 0.00% 2.05% 1.95% -3.15% -0.66% -0.96%
Jun-13 $12,876 ### 97.44% 96.56% 96.30% ### 0.00% 2.56% 0.88% 0.26% -4.48% 0.00% 2.56% 0.90% 0.27% -4.65%
Jul-13 $13,212 ### 96.55% ### ### 0.00% 3.45% -4.46% -0.84% 0.00% 3.45% -4.62% -0.83%
Aug-13 $14,789 ### 96.02% ### 0.00% 3.98% -4.71% 0.00% 3.98% -4.90%
Sep-13 $15,786 ### 94.94% 0.00% 5.06% 0.00% 5.06%
Oct-13 $16,119 ### 0.00% 0.00%
### 96.30% 96.02% 94.40% 93.77% 92.07% 88.64% 84.33% 81.53% 80.78% 0.00% 3.70% 0.53% 0.66% -1.01% -0.22% 0.55% 1.46% 1.53% 1.43% 0.00% 3.70% 0.55% 0.69% -1.09% -0.24% 0.61% 1.70% 1.85% 1.74%

Customer acquisition profitability

Conversion New
month MRR CACs Cumulated revenue in lifetime month vs. CACs E1 E2
0 1 2 3 4 5 6 7 8 9 Cohort is profitable since lifetime month
Jan-13 $7,851 $50,000 $7,851 $15,387 $22,621 $29,603 $36,479 $43,259 $49,937 $56,504 $62,958 $69,300 7
Feb-13 $7,988 $50,000 $7,988 $15,676 $22,908 $29,906 $36,796 $43,585 $50,264 $56,853 $63,312 6
Mar-13 $9,234 $60,000 $9,234 $18,131 $26,809 $35,378 $43,810 $52,162 $60,314 $68,302 6
Apr-13 $10,123 $60,000 $10,123 $19,780 $29,002 $37,903 $47,104 $56,572 $66,260 6
May-13 $11,788 $70,000 $11,788 $23,334 $34,655 $46,333 $58,088 $69,956 Not yet profitable
Jun-13 $12,876 $70,000 $12,876 $25,422 $37,855 $50,254 $63,230 Not yet profitable
Jul-13 $13,212 $80,000 $13,212 $25,968 $39,313 $52,769 Not yet profitable
Aug-13 $14,789 $90,000 $14,789 $28,990 $43,887 Not yet profitable
Sep-13 $15,786 $90,000 $15,786 $30,774 Not yet profitable
Oct-13 $16,119 $90,000 $16,119 Not yet profitable
Conversio
n New
month customers # of retained customers
Jan-13 Feb-13 Mar-13 Apr-13
Jan-13 80 80 75 72 70
Feb-13 88 88 86 82
Mar-13 105 105 103
Apr-13 110 110
May-13 115
Jun-13 128
Jul-13 137
Aug-13 151
Sep-13 161
Oct-13 168
80 163 263 365

Conversio
n New
month customers # of retained customers
month 0 month 1 month 2 month 3
Jan-13 80 80 75 72 70
Feb-13 88 88 86 82 78
Mar-13 105 105 103 98 94
Apr-13 110 110 106 102 99
May-13 115 115 112 105 98
Jun-13 128 128 122 119 115
Jul-13 137 137 129 122 118
Aug-13 151 151 145 135
Sep-13 161 161 154
Oct-13 168 168
80 1,032 835 672
# of retained customers in month A1
May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13
69 67 66 66 65 64
78 77 76 73 72 70
98 94 92 90 86 82
106 102 99 97 92 90
115 112 105 98 97 96
128 122 119 115 110
137 129 122 118
151 145 135
161 154
168
466 580 697 823 955 1,087

# of retained customers in month A1

month 4 month 5 month 6 month 7 month 8 month 9
69 67 66 66 65 64 month 0
77 76 73 72 70 1.00
92 90 86 82 1.00
97 92 90 1.00
97 96 1.00
110 1.00
1.00
1.00
1.00
1.00
542 421 315 220 135 64 1.00
1
 # of retained customers in month
month 1 month 2 month 3 month 4 month 5 month 6 month 7 month 8
0.94 0.96 0.97 0.99 0.97 0.99 1.00 0.98
0.98 0.95 0.95 0.99 0.99 0.96 0.99 0.97
0.98 0.95 0.96 0.98 0.98 0.96 0.95
0.96 0.96 0.97 0.98 0.95 0.98
0.97 0.94 0.93 0.99 0.99
0.95 0.98 0.97 0.96
0.94 0.95 0.97
0.96 0.93
0.96

9 8 7 6 5 4 3 2
 A1
month 9
0.98