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Data Analysis Introduction to Churn and Lifetime Value (LTV) Analysis Churn Review: Churn

Laura Mora Freeman
Laura Mora Freeman
8,192 Points
Posted by Laura Mora Freeman
Laura Mora Freeman
8,192 Points

Churn

In the ChurnAssessment spreadsheet (used in multiple questions in this quiz), what is the Net MRR Churn rate for month 6? Exclude new subscribers from your calculations. Submit your answer in percent format, rounded to the nearest 100th decimal value (example: 10.22):

Can you help me with this calculation , i am not getting right, thank you

Caleb Kemp
Caleb Kemp
12,754 Points
Caleb Kemp
Caleb Kemp
12,754 Points

So, the calculation is pretty straightforward.

Net MRR = (cancelled - expansion) / start of month

So, for month 8, here's what that looks like cancelled = 3012, expansion = 801, start = 107144

(3012 - 801) / 107144 2211 / 107144 = 0.02063 to get the percent, times that by 100 so the net MRR for month 8 is 2.06%

Hopefully that makes sense, let me know if it gives you any further difficulty.

3 Answers

Laura Mora Freeman
Laura Mora Freeman
8,192 Points
Laura Mora Freeman
Laura Mora Freeman
8,192 Points

Thank you Caleb, i was doing it with the $ not subscribers, thank you for clarifying it. Also.

what is the dollar value of the Net MRR Churn in Month 1? Exclude new subscribers from your calculations: $

I am doing this with the same formula but now with $

= ($141,775-$23,400)/$2,561,250 = 0.05

and i get an error, do you know why. Thank you.

Caleb Kemp
Caleb Kemp
12,754 Points
Caleb Kemp
Caleb Kemp
12,754 Points

It's kind of confusing how all the terms sound so similar but are all calculated differently. Here is how you calculate the $ amount of net churn. (What you have above is churn rate percentage)

$ Net MRR = (canceled $) - (expansion $) So, for month 2, here's what that looks like cancelled $ = 65675, expansion $ = 21925

$ 65675 - $ 21925 = $ 43750

I think you should be able to get the correct answer from that, good luck. Let me know if it gives you any further trouble

Caleb Kemp
Caleb Kemp
12,754 Points
Caleb Kemp
Caleb Kemp
12,754 Points

Glad I was able to help!

Laura Mora Freeman
Laura Mora Freeman
8,192 Points
Laura Mora Freeman
Laura Mora Freeman
8,192 Points

Since you are active can i ask another question. What is our net LTV if we have: a monthly ARPU of $10, a gross monthly churn rate of 12%, and COGS of 10%? Round your number to the nearest whole dollar (do not include any cent values):

I tried with the formula given LTV=1/Churn*Arpu but i am not getting results, also i tried to convert the churn rate to the average customer lifetime but is not working, if you happen to know, would love your help. Thank yoou in advance

Caleb Kemp
Caleb Kemp
12,754 Points
Caleb Kemp
Caleb Kemp
12,754 Points

Sorry, I didn't see this earlier, I put the solution on the separate post you made for this question. Good job plugging away at it, glad to see you making progress.