Dollar Churn
The percentage of recurring revenue lost from cancellations and downgrades in a given period. Measures the financial impact of customer losses.
Also known as: revenue churn, MRR churn
Formula
(MRR Lost / MRR at Start) x 100
Why dollar churn matters
Dollar churn tells you how much revenue you are losing, which is ultimately what determines your growth trajectory. A company can have high logo churn but low dollar churn if the accounts leaving are small.
The goal is negative net dollar churn - where expansion revenue from existing customers exceeds the revenue lost from churn and contraction. This creates a self-reinforcing growth engine.
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How to calculate dollar churn
Divide the MRR lost from cancellations and downgrades by the MRR at the start of the period. For net dollar churn, subtract expansion MRR from the numerator.
Gross Dollar Churn Calculator
(MRR Lost / MRR at Start) x 100
Common Mistakes
- -Not separating gross dollar churn from net dollar churn
- -Excluding contraction (downgrades) from the calculation
- -Comparing dollar churn across companies without normalizing for average contract value
Pro Tips
- +Track both gross and net dollar churn - gross shows the problem, net shows how well expansion offsets it
- +Segment by revenue tier to understand if large or small accounts churn more
- +Set dollar churn targets relative to new business - if churn exceeds new sales, you are shrinking
Related Terms
Logo Churn
The percentage of customer accounts (logos) lost in a given period, regardless of the revenue each account represented.
Churn Rate
The percentage of customers or revenue lost over a given period. Customer churn measures account losses; revenue churn measures dollar losses.
Net Dollar Retention (NDR)
The percentage of recurring revenue retained from existing customers after accounting for expansion, contraction, and churn. Above 100% means existing customers generate more revenue over time.
Expansion Revenue
Expansion revenue is additional recurring revenue generated from existing customers through upsells, cross-sells, seat additions, or increased usage. It is the primary driver of net revenue retention above 100%.
Further Reading
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