Specifically, as you will notice, these metrics focus on the customer and no longer on the company: this is the most important change of perspective to consider, both in numbers and in mentality, when deciding to offer a B2B subscription model.
Monthly Recurring Revenue
Things?
The total Monthly Recurring Revenue indicates the revenue that the company france phone number library will receive every thirty days based on the active subscription plans.
How is it calculated?
Normalize the active plans on a monthly basis (for example, if your service is offered with an annual plan you will have to divide it by 12) and add the data relating to each individual customer.
Annual Recurring Revenue
Things?
Annual Recurring Revenue indicates the revenue that the company will receive each year based on active subscription plans. This metric is particularly useful for observing trends of the year and establishing growth goals for the following year.
How is it calculated?
Add together the Monthly Recurring Revenues for the period you are considering.
Churn Rate
Things?
Monitoring the Churn Rate is essential to understand the state the company is in and the internal or external factors that may affect its performance.
A low but constant Churn Rate is to be considered physiological, while the presence of "peaks" in subscription unsubscriptions is an alarm bell on the state of the service offered.
How is it calculated?
Divide the total number of customers lost in a period by the total number of customers at the beginning of the period.
Revenue Churn
Things?
Revenue Churn expresses the percentage of lost revenue from subscribers in a given period, for example in a month. In other words, it describes the financial impact of unsubscriptions.
How is it calculated?
Divide the Monthly Recurring Revenue lost to unsubscriptions by the previous month's Monthly Recurring Rate.
Client Lifetime Value
Things?
Client Lifetime Value (CLV) is the most important metric for a subscription-based business and indicates the total revenue potential of a customer. It should always be higher than the customer acquisition cost.
How is it calculated?
Divide the total Monthly Recurring Revenue by the Churn Rate.
Renewal Rate
