Guide
How to Calculate Revenue at Risk From Customer Data
Knowing a customer is slipping is useful; knowing what it could cost you is what drives decisions. Here is how to estimate revenue at risk responsibly from your own transaction data.
What Is Revenue at Risk?
Revenue at risk is an estimate of the future revenue you could miss from customers who show signs of slowing down but have not stopped buying yet. It is a forward-looking exposure figure, not money that has been lost and not a figure for your accounts.
Customer Risk vs. Actual Lost Revenue
- Revenue at risk: customers who are overdue but could still return on their own.
- Lost or recoverable revenue: customers who have already lapsed past your inactivity threshold.
- Recognized revenue: sales actually recorded in your books. Neither estimate changes it.
Inputs From Historical Transactions
- Each customer's average order value
- How often they used to order
- Days since their last order, measured to a fixed reference date
A Simple Illustrative Method
This is a generic teaching method, not Revenow's internal calculation. For each at-risk customer, estimate the orders they would normally have placed over a planning period and multiply by their average order value. Optionally apply a discount for the chance they come back anyway.
Worked example
| Customer | Avg. order | Orders / quarter | Quarterly value |
|---|---|---|---|
| Shop 1 | $200 | 3 | $600 |
| Shop 2 | $80 | 2 | $160 |
| Shop 3 | $450 | 1 | $450 |
Total quarterly value of these three at-risk customers: $600 + $160 + $450 = $1,210. If you assume half of that would not come back without action, the estimated quarterly revenue at risk is about $605.
Illustrative example with hypothetical figures. Estimates are not guaranteed outcomes.
How Revenow Approaches It
Revenow reports revenue at risk only for customers it classifies as at risk (60–89 days since the last purchase, relative to the analysis reference date). It keeps that figure separate from estimated recoverable revenue, which covers inactive customers only. Both are estimates. See revenue at risk analysis for details.
Interpreting the Estimate
Use the figure to rank effort, not to forecast results. A large amount concentrated in a few accounts suggests personal outreach; a small amount spread across many customers suggests a light reminder.
Common Calculation Mistakes
- Adding revenue at risk and lost revenue into one number
- Using lifetime revenue instead of a defined period
- Mixing currencies in one total
- Reporting the estimate as if it were guaranteed loss
Frequently Asked Questions
Is revenue at risk the same as churned revenue?
No. Revenue at risk relates to customers who haven't lapsed yet. Churned or lost revenue relates to customers who already have.
What period should I use?
Pick one that matches how often your customers buy, such as a quarter, and keep it consistent between analyses.
Can revenue at risk be negative?
No. It is an estimate of potential missed revenue, so the lowest value is zero.
Related: how to identify at-risk customers.