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Unit Economics

What is unit economics? Unit economics refers to the financial numbers around a single “unit,” which typically refers to a single customer. Many of the metrics in the Churnopedia are the basics of unit economics, especially: Customer Lifetime Value (CLTV) Customer...

Recurring Revenue

Recurring revenue is the revenue your company is likely to continue to receive from customers in the future. As a subscription business, your renewable software and services revenue should count as recurring. You can calculate recurring revenue annually (Annual...

Revenue

Revenue refers to the total amount of income (before expense deductions) produced by your company’s sale of goods and services. For SaaS companies, revenue is often recognized when the software or service has been delivered to the customer. EXAMPLE: You have a...

Renewal Rate

What is a customer renewal rate? Customer renewal rate is the percentage rate of customer retention. It measures the rate at which a company’s customers renew their contract. How do you calculate a customer renewal rate? Customer Renewal Rate % = 100% – Churn...

Recovering Customer Acquisition Cost (CAC)

How to recover customer acquisition costs? An important measure in subscription businesses is how long it takes to recover the initial Customer Acquisition Cost (CAC), which for some, is the single most expensive expenditure in a customer’s lifetime. Recovery time is...