Retention and churn

What the ratios mean, and when Morevy holds them back.

The revenue movement tells you what happened in a month. Retention tells you how well you kept the revenue you started with.

The ratios

Gross revenue retention asks: of last month's revenue, how much did you keep? Lost customers and customers who paid less count against it. Customers who paid more do not help it, so it cannot exceed 100%.

Net revenue retention asks the same question, but customers who paid more do count. Above 100% means the customers who stayed grew enough to more than cover those who left.

Customer retention counts customers rather than dollars: the share of last month's customers who are still paying.

New and returned customers are in none of these. All three are about the book you started the month with, which is what makes them comparable from month to month.

Worked example

A month starts at $40,018. Lost is ($4,508), Contraction is ($529), and Growth is +$1,644.

Gross revenue retention	($40,018 - $4,508 - $529) / $40,018	87.4%
Net revenue retention	($40,018 - $4,508 - $529 + $1,644) / $40,018	91.5%

When the ratios are held back

On cash collected, gross and net revenue retention are held back, with the reason shown. Retention is defined over revenue matched to the months it covers. Measured on payment timing, a customer who prepaid six months looks like a total loss in each of the five months after the payment.

For the reasoning behind this rule, with a worked example, see When Payment Data Can’t Support an Honest Retention Ratio.

To see them, switch the reporting basis to normalized recurring revenue under What Morevy knows, then Reporting basis, or give the file its plan lengths. They are also available when your file states recurring revenue directly.

Customer retention is not affected by the basis.

On a small base, every ratio is held back when fewer than 10 customers are involved, because a single customer would swing it.

Retention by cohort

Every cohort as a row and every month as a percent, coloured from the table's highest rate (green) to its lowest (red). Switch between Lines and Table in the block's head. Cohorts under 10 customers print in grey and are not pooled.