The first thing you’ll notice is that we break down churn in two sub-categories:
- Cancellations. These are the customers who actively choose to cancel their accounts.
- Delinquent. These are customers who churned when you are unable to bill their credit cards.
On ProfitWell, we make a distinction between the time in which a user tells you she doesn’t want your product anymore (i.e. cancels her account) and the time in which said cancellation actually takes place (i.e. said user’s MRR is subtracted from your totals).
Here’s an example:
- Sarah signs up for a $10 plan on April 15th.
- On June 8th, Sarah decides to cancel her account.
- Upon that happening, ProfitWell will notify you that Sarah has decided to terminate her subscription (look for this information on your Dashboard’s Feed and on your Growth chart).
- On June 15th, Sarah will officially churn, and $10 will be subtracted from your MRR.
While we’ve got a bunch of reasons to treat users this way, these are the two biggest ones:
- Sarah has paid her subscription through June 15th, and she’s technically an active user until then.
- Further, and perhaps more importantly, the value of Sarah as a customer who’s decided to cancel her account is greater than that of someone who isn't a customer anymore. Which is exactly why we make it easy to get a list of these customers who cancelled but have not yet churned on the app.