# Contraction MRR

> Contraction MRR is the amount of monthly recurring revenue lost when existing customers downgrade to lower-priced plans or reduce their usage.

- **URL**: https://dodopayments.com/glossary/contraction-mrr

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## What is Contraction MRR?

Contraction MRR is the amount of monthly recurring revenue lost when existing customers downgrade to lower-priced plans or reduce their usage. It represents a decrease in revenue from customers who remain with the company, rather than those who churn entirely.

### Why It Matters

- It highlights potential issues with pricing tiers or features that may no longer meet customer needs.

- High contraction rates can offset the gains from new customer acquisition and expansion revenue.

- Tracking this metric helps success teams identify accounts that may be at risk of eventually churning.

## Learn More

- [Metrics to reduce SaaS churn](https://dodopayments.com/blogs/reduce-churn-metrics-saas)
- [Reducing involuntary churn from failed payments](https://dodopayments.com/blogs/involuntary-churn-failed-payments)
- [How subscription fatigue impacts retention](https://dodopayments.com/blogs/subscription-fatigue)