How to Use the Retention ROI Forecast Tool

This tool helps you see three things most business owners are guessing at: your client churn rate, your monthly revenue churn rate, and how much revenue you would keep each year if you reduced that churn. It takes about two minutes, and you only need a few numbers you already have.

Step 1: Enter your monthly recurring revenue

Start with your total MRR. For this example, let's say you bring in $100,000 a month.

Step 2: Calculate your client churn rate

If you don't already know your churn percentage, the tool will figure it out for you. Enter how many clients you had at the beginning of the month and how many you lost over the course of the month. If you started with 100 clients and lost 5, that's a 5 percent client churn rate.

Step 3: Calculate your revenue churn rate

Enter the revenue you started the month with and how much you lost when those clients left. If you began at $100,000 and losing those 5 clients cost you $5,000, the tool gives you your revenue churn percentage.

Step 4: Calculate your gross margin

Enter your total MRR for the month again, then your direct costs. This is everything you pay monthly to run the business: payroll, overhead, platform and subscription fees, all of it. If you spend about $30,000 a month on expenses, the tool calculates your gross margin from there. You can also switch the currency if you're not working in US dollars.

Step 5: Scroll down to see your forecast

Once your numbers are in, the tool shows you what happens if you reduce client churn by 10, 20, 30, 40, or 50 percent. For each scenario you'll see your new client churn rate, your new revenue churn rate, how much revenue you would retain annually, and what that means for your annual profit.

What to do with the results

This is the part most people skip. The forecast shows you exactly what it costs to leave your client experience the way it is, and what you stand to keep if you fix it. Those numbers are the starting point for every retention decision you make from here.

If you want to walk through your results together, or talk through a few quick ways to start keeping more of your clients, I'm happy to do that. Click Book a Call at the top of the page and let's look at your numbers.