Work out contraction revenue instantly with clear inputs, formula shown and shareable results.
Contraction is revenue lost from customers who stay but spend less. It is an early warning of churn, because accounts usually shrink before they cancel entirely.
Contraction rate
Contraction MRR = downgrades + seat reductions + discounts; rate = contraction / starting MRR
Figures are estimates based on the inputs given. Marketing performance, platform fees and conversion behaviour vary by audience, channel and season. Use this as a planning guide, not a forecast.
Because the customer is still engaged and recoverable. Contraction is a solvable problem; churn is usually not.
Yes in revenue terms. A permanent concession reduces recurring revenue exactly as a downgrade does.