Important KPI Metrics for Subscription Analytics
Zoho Analytics enables you as a business owner to proactively manage and drive your subscription business with deep analytical insights. With Zoho Analytics, you can slice and dice your subscription data, derive & analyze key SaaS subscription metrics such as churn rate, retention rate, recurring revenue, average revenue and much more.
Currently, Zoho Analytics provides direct integration with Stripe Subscriptions and Zoho Subscriptions. We have plans for integrating it with other subscription-based applications such as Recurly, Chargify etc in the future.
In this help section, we are going to learn about the various metrics used in a subscription application and how you can calculate them.
1. Churn Rate
Churn rate refers to attrition i.e., the percentage of customers who unsubscribe from a product or service within a period. You can calculate the churn for any period such as monthly, quarterly, or yearly basis
Churn Rate = (number of customers who have unsubscribed / total number of customers at the start of the period)* 100
2. Retention Rate
Retention rate refers to the percentage of subscribers who continue to use the product or service during a given time period. You can calculate the retention rate for any period such as monthly, quarterly, or yearly basis
Retention Rate = ((number of customers at the start of the period + number of new customers added – number of customers who unsubscribed during period) / number of customers at start of period) * 100
3. Monthly Recurring Revenue (MRR)
Monthly recurring revenue (MRR) is the income that a business can rely on every month. It enables in measuring the predictable recurring revenue components of your subscription business. You can simply sum the fees paid by individual customers who have subscribed for a monthly plan.
MRR = SUM(Monthly subscription fee of customers)
4. Average Revenue Per Unit (ARPU)
Average revenue per user/unit gives you an account of the average revenue gained from a user/unit. This can be calculated on a monthly, quarterly or yearly basis.
ARPU = Total Revenue earned during the period / Total number of Subscribers in that period
5. Life Time Value (LTV)
Life Time Value (LTV) is the total revenue gained from the customer while he is subscribed to the business. This can be calculated on a monthly, quarterly or yearly basis.
LTV = Average contribution of the customer during the period * (1/Churn rate during the period)