Free Subscription Revenue Leakage
Quantify churned revenue, failed-payment loss, and refund drag against SaaS benchmarks. Spot the biggest recovery lever before you spend on retention tooling.
Inputs
Update the levers that drive subscription leakage.
Benchmark-based estimates
Leakage estimates are benchmark-based to help prioritize the highest-impact recovery levers, then tune with your cohort data.
- Benchmarks are approximate; refine them with your billing data and cohort behavior.
What the model counts as a loss
The calculation runs in four parts. Your MRR is annualized, your churn rate is applied once to that figure, failed payments are reduced by the recovery rate you set, refunds are taken as a share of the same base, and a fifth line adds the distance between your free-to-paid conversion and a 2% figure held in the code. Two of those deserve a flag. The comparison set behind the highlighted ranges, 5% churn, 1.8% failed payments, 45% recovery and 1.2% refunds, is written into the component with no source attached, so treat it as a placeholder for your own baseline. The conversion line counts revenue you have not lost.
Say $80,000 of MRR, churn at 4%, failed payments at 2% recovering 35%, refunds at 1%, and free-to-paid at 1.4%. Annualized that is $960,000, and the parts come out as $38,400 of churn, $12,480 net of recovery on $19,200 of failed payments, $9,600 of refunds and $5,760 against the conversion figure, for $66,240 in total. The churn line is the one to read carefully. It is applied to the annual base once, so if your 4% is a monthly rate, the compounding version is closer to 39% across a year and the model is understating by an order of magnitude.
A reasonable objection is that finance already reports a leakage number and this adds nothing. The question worth putting to that number is which denominator it uses. Billed, collected and recognized revenue are three different figures in the same month: an invoice raised on the first, cash arriving on the twentieth, and revenue spread across the term of the contract. A percentage quoted without naming which one it divides by cannot be compared with anything, including the same number from last quarter. Fix the denominator first, then the direction of travel starts meaning something.
Read the benchmark figures with care
The arithmetic here is straightforward, and the five comparison figures labelled as benchmarks on this page are ours. They carry no external survey, so treat them as placeholders.
What it assumes
- ARR is your monthly recurring revenue times twelve.
- Churn, failed payment, refund and conversion rates are the percentages you enter, applied flat to ARR.
- Failed payment leakage is the failed amount reduced by the recovery rate you enter.
- The free-to-paid line values the gap between your conversion rate and the stored 2% comparison figure.
What it leaves out
- Any published industry benchmark. The five comparison numbers were chosen for this page.
- Cohort behaviour, contraction, expansion and seasonality, all of which move real leakage.
- Involuntary versus voluntary churn, which have different fixes and different recovery rates.
- Whether recovering a given amount is possible at all, which is the question that decides the business case.
Where the numbers come from
- The five benchmark figures
- Our own assumption5% churn, 1.8% failed payments, 45% dunning recovery, 1.2% refunds and 2% free-to-paid. Round comparison values chosen for this page. Replace each with your own cohort data before quoting any of them.
- The free-to-paid opportunity line
- Our own assumptionThe one place a stored figure enters the arithmetic rather than sitting beside it. The gap is measured against that 2% value, so the dollar result moves with a number we picked.
- Your rates and revenue
- Our own assumptionEverything else on the page is your input, applied as plain percentages of ARR.
Assumptions and sources checked 5 September 2026. Published figures move on their own schedule, so confirm anything you rely on against the authority that issues it.
How it works
- 01
Enter MRR + churn
Current MRR and monthly logo/dollar churn rates.
- 02
Add failed-payment + refund rates
Involuntary churn and refund volume as a share of bookings.
- 03
Compare to benchmarks
Typical SaaS ranges highlighted against your inputs.
- 04
Pick the top lever
Dunning, retention, or conversion. Where the recovery is biggest.
Related guides
Revenue Leakage from Payment Failures: How Much Are Failed Transactions Really Costing Your Platform?
The measurement discipline behind the headline figure, separating gross exposure, recoverable share and confirmed loss.
Read the guideInvoluntary vs Voluntary Churn on Platforms and How to Attack Each
Splits the churn figure into two problems with different owners, which is the first decision after seeing the total.
Read the guideReducing Involuntary Churn with a Payment Failure Recovery Playbook
Turns the quantified loss into a recovery programme with segment-level retry and dunning policy.
Read the guideFrequently Asked Questions
What counts as revenue leakage?+
Are benchmarks included?+
How should I use the recovery opportunity?+
Does this replace Stripe Billing analytics?+
Is this financial advice?+
Leakage found. Close the faucet
Gruv's subscriptions workflow ships dunning, retry logic, card updater, and failed-payment routing so the revenue this tool flagged actually lands next month.
Many teams start with a narrow launch in weeks.