Reactivation MRR
Definition
Reactivation MRR is a breakdown of Monthly recurring revenue (MRR) specifically for customers that previously had charges from a subscription that stopped, and that have now started again or re-subscribed. This metric is important because it allows businesses to track the success of their customer reactivation efforts and to identify areas where improvements can be made.
How is Reactivation MRR calculated?
Take all of your new charges this month, ie. a customer that did not have a charge last month and do an additional check to see if they ever had a charge previously. If they do, they’re classified as a re-activation, not New MRR.
The formula for calculating Reactivation MRR is:Reactivation MRR = Sum of MRR from charges in the period, where the customer had no charges in the last period.
Upzelo does not factor paused subscriptions in the Reactivation MRR calculation.
Example:
Customer X had a subscription for $100 per month, and decided to cancel their subscription, with an end date of June 20th. They then reactivated their subscription on August 10th.
Customer Y had a subscription for $200 per month, and paused their subscription for May, June and July. But decided to restart the subscription on August 3rd.
On September 20th, a Reactivation MRR calculation would conclude:
For customer X, the $100 reactivation MRR would be included in MRR between their first invoice on August 10th, and the end of the “Reactivation Period”, of September 10th. So, there would be no Reactivation MRR on September 20th report. The $100 would now be “Existing MRR”.
For customer Y, the $200 would not be included as Reactivation MRR at all, because it was a paused subscription. The $200 would remain within Existing MRR.
Why is Reactivation MRR important to measure?
Customers who have chosen to come back and reactivate may often have tried out a competitor or competitive product. Or they no longer had a need for your product, but the need came back. Measuring your reactivation MRR, or at least extracting it from your core.
New MRR measures ensures this event is not incorrectly measured in your new customer calculations.
What are some ways to improve Reactivation MRR?
Increasing the number of reactivated customers by running winback campaigns, will increase the amount of monthly recurring revenue generated from reactivated customers. Winback campaigns come in all different shapes and sizes, such as:
Publicising your product releases, to entice users back wirth features they thought were lacking.
Incentivising previous customers to come back, because it’s likely cheaper than trying to win new customers.
Staying in touch with customers that leave.
