Skip to main content

​
What is Average Contraction Amount?

It’s the average amount of MRR you lose each time a customer reduces their subscription. If 3 customers contracted this month and the total Contraction MRR is $150, the average contraction amount is $50.

​
How to Calculate It

Average Contraction Amount = Total Contraction MRR / Number of contraction events
Example:
  • Customer A contracted by $30
  • Customer B contracted by $50
  • Customer C contracted by $70
Average = ($30 + $50 + $70) / 3 = $50

​
Why It’s Useful

It tells you how much revenue customers are cutting when they reduce their plan. A growing average means customers are making bigger cuts — a stronger warning sign than small reductions. Bigdelta calculates this automatically from your Contraction MRR events.