Churn Overview Report

Overview 

Businesses need to be able to measure churn for a given period of time to understand the revenue lost due to churn. Furthermore, to get closer to actionable insights, merchants need to understand the reasons for the churn. 

Churn is the main enemy of any subscription business, and for you to be able to understand, prevent and fight churn, 2Checkout enables access to reports which give you an overview of your churn, details on sources of churn and actionable insights to allow you to prevent and fight churn. It would be difficult for one report to address all that information, so a suite of reports will be used instead, merchants having the possibility to access them individually, or drill down from a high-level report to a lower-level report for more granularity. 

The Churn overview report available in Merchant Control Panel gives a high-level overview of your churn.

A subscription is considered as churned when: 

• The subscription is expired or the subscription was disabled either through a user action or a system flow

• If there are several activation/deactivation events (cancellation/reactivation of the subscription) in a given interval and the final event is a disabled/expired subscription, then the subscription will be counted only once as churned.

Benefits 

• Get actionable and timely data regarding overall churn 

• Learn which product or initial sales source are mainly responsible for churn

• Learn which churn source is generating the highest churn numbers

• Know how many customers and how many subscriptions churned

• Know the dimension of monthly recurring revenue lost due to churn

Availability 

The feature is applicable to all subscription merchants with the following packages: 2Subscribe, 2Monetize, and 4Enterprise if merchants have subscription capabilities. 

Restrictions

The following subscriptions are excluded from churn reporting: 

• Non-recurring/ lifetime subscriptions 

• Subscriptions in trial state at the start of the reporting period 

• Subscriptions that were both activated and churned in the same interval 

• Subscriptions that were disabled and then reactivated during the reporting interval 

• Subscriptions that were upgraded using the "create a new subscription" flow 

• Partner subscriptions 

• Pay per usage subscriptions

Workflow

1. Log in to your Merchant Control Panel.

2. Navigate to Reports center → Main reports → Subscription reports → Churn overview report.

 3. Click on the Set up report button. 

 4.  Select a reporting interval out of the pre-defined values or pick custom dates and click on Build report. This will allow you to calculate a list of churn metrics relevant to all subscriptions that got disabled or expired during the selected interval. The oldest available data in the system is for subscriptions with expiration date after March 1st, 2022.

 5.  You will see three cards displaying the information below: 

• Customer churn - a customer becomes churned when there are no longer any active subscriptions associated to the account for a specific vendor and rate (percentage of customers churn during the reporting interval relative to the number of active customers in the 1st day of the reporting interval)

• MRR churn (Monthly Recurring Revenue) - the revenue amount that the merchant is no longer going to receive the next month due to the churn events that happened during the reporting interval). The user’s default currency is applied in this case. The MRR churn metric is calculated using the exchange rate of the last order date of the subscription.  

• Subscription churn - the number of subscriptions that were churned during the reporting interval and rate (the percentage of subscriptions churn during the reporting interval relative to the number of active subscriptions in the 1st day of the reporting interval).

 6. Click on one of the cards available in the Churn overview report page to get a set of three-related insights:

• Product with the highest churn value for the reporting interval

• Initial order source with the highest churn value for the reporting interval. This insight will be relevant to the merchants that have been using the “SRC” parameter when building their links. More on the SRC parameter can be found in Buy-link parameters | Documentation.

• Churn source with the highest churn value for the reporting interval

  • The available churn sources are the following: 
    • System (e.g., a subscription was disabled because of a declined payment)
    • Shopper and Merchant Support  (e.g., a shopper/ merchant requests 2Checkout to disable a subscription)
    • Control Panel (e.g., a merchant disables a subscription on behalf of their shopper)
    • API (e.g., a merchant wants to disable subscriptions in bulk using the API)
    • MyAccount (e.g., customer cancels their own subscription*)
    • MyAccount Churn Prevention Campaign (e.g., a customer disables their subscription but buys a new one with a discount offered in a churn prevention campaign)
    • MyAccount Cancel on Demand (e.g., a scheduled cancellation has actually taken place)
    • Unspecified (no churn source information logged in the 2Checkout system)

FAQ

Question: If a renewal promotion is applied, the merchant will lose some MRR. Is this accounted for? 

Answer: Renewal promotions are not accounted for in this report as renewals are not churned events. 

Q: If the quantity on the subscription was reduced and the price is now lower, do we take this contraction into account? 

A: No, we don’t, this is not considered a churn event. 

Q: Will I know how much churn is coming from trials, automatic renewals, or manual renewals? 

A: No, in this phase, the report doesn't offer such information. 

Q: Do we consider unconverted trials as churn? 

A: No we don't. The only subscriptions considered for the churn metrics calculations are the ones that were active at the beginning of the reporting period.  

Q: Which filters can I apply? 

A: Currently, the only filter the users can apply in Control Panel is currency. We will have a series of filters added in the future. 

Q: If the billing cycle length of a churned subscription is 12 months, how much will the churned MRR be?

A. For a billing cycle length of 12 months, the Churned MRR is calculated by dividing the last renewal price by 12.

Q: What if my subscription has a billing cycle length of 1 month? What if its’ billing cycle length is 1 week?

A: If the billing cycle length is 1 month, the Churned MRR is equal to the last paid amount for the subscription, while if the billing cycle length is 1 week, then the Churned MRR is equal to the last paid amount times 4.