Churn is a term used when a paying customer doesn't renew a subscription or doesn't return for additional business for some period of time. It's a term that used more commonly in Subscription-based companies, but it not limited to those company types.
Aureum supports 4 types of churn calculation: 3 based on invoicing and 1 based on the customer status in Aureum. You can freely switch between these types.
1. Aureum Status Churn:
With this type, Aureum saves the company status when it changes in Aureum. It then compares status last month company status against this month.
- Churn = Active Last Month AND Inactive This Month
- Customers = Total Active Customer Last Month
- Churn Rate This Month = Churn / Customers
2. Invoiced Monthly
Similar to the Status Churn approach, Aureum compares invoices instead of status change. If a customer had an invoice last month, and no invoice this month, then it is counted as churn.
- Churn = Invoiced Last Month AND No Invoice This Month
- Customers = Total Customers with Invoice Last Month
- Churn Rate This Month = Churn / Customers
3. Invoiced Quarterly
Aureum compares invoices instead of status change. If a customer had an invoice last quarter, and no invoice this quarter, then it is counted as churn.
- Churn = Invoiced Last Quarter AND No Invoice This Quarter
- Customers = Total Customers with Invoice Last Quarter
- Churn Rate This Quarter = Churn / Customers
4. Invoiced Yearly
Aureum compares invoices instead of status change. If a customer had an invoice last year, and no invoice this year, then it is counted as churn.
- Churn = Invoiced Last Year AND No Invoice This Year
- Customers = Total Customers with Invoice Last Year
- Churn Rate This Year = Churn / Customers