Preparing for the Board Room: Subscription Metrics (Subscribed13)
Subscription Metrics & Reporting Tips
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Transcript of Subscription Metrics & Reporting Tips
Subscription Metrics & Reporting Tips
Measuring Value, Assigning Roles & Understanding Which Insights Matter for Your Business
What’s Inside?
Introduction
Part 1: Measuring Value With Metrics
Part 2: Subscriber Identities & Roles
Conclusion
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Subscription metrics answer questions like:
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What attracts and converts new users into subscribers?Are your subscribers engaged for the long-term?What’s your recurring revenue – and how can you increase it?How can you penetrate new markets and reach new customers?
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But the role of the Finance team is changing.
In today’s subscription economy, the Finance team is no longer just the cost accountant. They’re now the business value architect –
and they have the power to drive growth and profitability.
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… that not only lets your intrepid team of number crunchers measure growth and profitability but help drive it across all functions within your company.
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This deck explains how to use specific subscription metrics and roles to understand how existing business
potentially impacts future revenue as well as subscription processes across your organization.
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> Business Velocity Metrics
> Subscriber Usage Metrics
> Subscriber Support Metrics
Part 1: Measuring Value With Metrics
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Measuring Value with Metrics
You can define your own metrics based on what matters to your business.
But luckily, there are some standard value metrics that every subscription business should be monitoring, so you don’t need to start from scratch.
We’ve classified these value metrics into three categories:
> Business Velocity
> Subscriber Usage
> Subscriber Support
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Business Velocity Subscriber Usage Subscriber Support
Monthly Recurring Revenue (MRR)
Average Revenue Per Account
(ARPA)
Customer Acquisition Cost (CAC)
Customer Lifetime Value (CLV)
Churn/retention rate
Cost of Goods Sold (COGS)
Sales & Marketing expenses
Research & Development expenses
Visitors/signups/paid customers
Monthly/daily active users
(MAU/DAU)
Monthly/daily unique visitors
Session duration
Number of sessions per user
Number of key user actions per
session
Most/least used features
Ticket volume
Customer Contact Rate (CCR)
Customer satisfaction rating/Net
Promoter Score (NPS)
Average resolution time
Cancelation rate
Chargeback rate
Fraud rate
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Business Velocity Metrics
What they tell you:
Is my business profitable and operating efficiently?
How to use them:
To increase the efficiency, quality and consistency of your business operations; To invest in the right technology, projects and personnel;
To expand into new global markets
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Subscriber Usage Metrics
What they tell you:
How does my subscriber navigate and engage with my offering?
How to use them:
To uncover unique opportunities for optimization; To discover new and unexpected use cases and user segments;
To define subscriber identities
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Subscriber Support Metrics
What they tell you:
Is my customer’s experience with my product/service a positive one?
How to use them:
To improve your checkout flow;To optimize your offering’s UI/UX;
To decide which features to add or remove;To make your purchase process more secure
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Value metrics don’t live in a vacuum – and they shouldn’t be confined to the Finance team.
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Instead, metrics should be owned jointly across all departments within your organization. Your CEO, CIO, CTO, CMO, VP of Sales and all other key stakeholders must be held accountable for transparently providing and contextualizing analytics on all business activities they own.
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> Building Subscriber Identity Records
> Defining Subscriber Roles
> Assigning Subscriber Roles
Part 2: Subscriber Identities & Roles
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Building Subscriber Identity Records
In the old transaction-based economy, it was enough to keep a static database of customer contact information — but that era has come and gone. Now that your focus
has shifted from the order itself to the person doing the ordering, you’ll need to maintain comprehensive subscriber identity records.
This is accomplished by consolidating behavioral, financial and demographic data from disparate business systems, including:
Customer relationship management tool (CRM) Web analytics
Enterprise resource planning tool (ERP) Marketing automation tool
Email platform Subscription billing platform
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Building Subscriber Identity Records
Your subscriber identity record should include the following information:
> Contact information
> Product usage metrics
> Purchase history
> Payment history
> Refund history
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Think of a subscriber identity record as your customer’s fingerprint.
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It gives you an overview of the impact that their behavior, demographics and financial contributions have on your subscription business.
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Once you know who your subscribers are,
(thanks to your real-time subscriber identity records!)
you can group them into roles. By running reports on each of these roles, you’ll uncover insights that are specific to the different
types of subscribers you’re serving.
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Defining Subscriber Roles
One way to define subscriber roles is based on the features and functionality that different groups of users are able to access within your offering.
To boost recurring revenue, you need to upsell “standard users” to a premium version of your offering with more features and functionality – and then
charge these “power users” a premium price.
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In subscription reporting, different subscriber roles might also be referred to as “cohorts.”
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In short, a cohort is a group of users who share a common characteristic or experience within a certain period. It could refer to a group of subscribers who all have the same access level – like, for example, your “power users” – or it could simply refer to a segment of users who all signed up during the same month.
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Cohort analysis is useful in subscription billing because it lets you identify relationships between
the characteristics of a specific population and that population's behavior.
Source: Cohort Analysis 101
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Assigning Subscriber Roles
Assigning the right subscriber roles can be tricky. After all, how can you correctly determine which roles will reveal the most valuable insights?
The answer: leveraging powerful predictive analytics to apply a role, or multiple roles, to each subscriber identity.
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Assigning Subscriber Roles
Machine learning software accurately identifies trends in customer behavior without the risk of human error. It’s intelligent enough to refine its predictions
as you feed it more and more data.
The result? An unbiased overview — and forecast — of how different subscriber roles (or cohorts) will impact your bottom line.
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Assigning Subscriber Roles
Why invest in predictive analytics for your business?
> Quickly segment complex analytics by subscriber role
> Understand how customer behavior powers product innovation
> Easily track engagement scores and lifecycle moments
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So, all that being said…>
… how do you ensure that the Finance team has the resources they need to effectively measure and track your business performance while driving future growth and profitability?
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Regardless of what you choose, you’ll need the capabilities to:
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Combine your financial and behavioral data
Track your subscribers’ buying journey from start to finish
Measure how your customers are engaging with your offering
Monitor the health of individual subscribers
Group subscribers by common traits and behaviors
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If you’re managing your subscriptionprogram in-house:
You’ll need to closely inspect all of your business tools (whether developed internally or outsourced) to ensure that you have solutions in place for all of
these capabilities.
Then, you’ll need to link of these systems together. That’s how you get those subscriber identity records – plus a holistic view of the health of your business.
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If you’re using a payment processor or subscription billing platform:
You might find that your provider is not offering real-time insight into your revenues and cash flow. If you can’t seamlessly consolidate your customer and
financial data, you’ll never have an accurate view of your business’s performance.
Evaluate the time and resources required to manually feed data into different business tools and systems – and also consider the room for error.
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Here’s another option:
Choose a flexible, comprehensive, end-to-end subscription billing solution that specializes helping
businesses like yours go global – fast.
(We’re partial to this one.)
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cleverbridge moves fast, integrates flawlessly and manages expensive, risky and time-consuming tasks for your business.
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Like collecting payments, managing taxation requirements, complying with global trade regulations and setting up legal entities.
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Rapid integration and time-to-market
Highly available infrastructure
Rigorous security monitoring
Flexible solution and robust set of APIs
Exceptional ongoing support from a team of experts
Full suite of success services to optimize your subscription program (email marketing, affiliate marketing, custom design/development and more)
Active global affiliate network
Sophisticated fraud screening technology
We check all of your boxes, including:
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to offer advanced subscription reporting and analytics.
And now we partner with
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Created specifically for the needs for global subscription businesses, ChartMogul seamlessly
integrates with our subscription platform –giving our clients access to real-time visual
reports and cohort analysis.
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This enables the Finance team to quickly track and analyze key metrics, measure customer satisfaction and identify opportunities for optimization.
Not just reporting on your business, but driving it.
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cleverbridge provides global subscription billing solutions that help companies build long-term customer relationships and grow recurring revenue streams. With our flexible, cloud-based billing and monetization platform, cleverbridge simplifies subscription business models and delivers an optimized online customer experience. Our clients leverage our expertise, technology and services to more effectively monetize their products and services, rapidly expand their global subscriber base and maximize customer lifetime value. Headquartered in Cologne, Germany, we have offices in Chicago, San Francisco and Tokyo.
To learn more about cleverbridge, please contact [email protected] or visit www.cleverbridge.com.