Here is a quick lowdown on the most important KPIs for businesses relying on a subscription business model.
ARR / MRR: Annual / Monthly Recurring Revenue is the value of your subscriptions’ recurring revenue during a year or a month.
ARPU: Average revenue per user is the average dollar amount you’re earning from customers. To calculate it, just divide total revenue by the number of active subscribers.
CAC: Customer acquisition cost is the dollar/euro amount you spend to acquire a new customer. To calculate it, divide your total marketing and ad spending by the number of new customers.
Churn: Subscriber Churn is the rate at which you lose customers each month. It’s a great indicator of how well your business/product/service is able to retain a satisfied customer. Divide the number of subscribers at the beginning of the month with the number of lost subscribers and multiply it by 100 for a percentage.
CLV or LTV: Customer lifetime value is the total dollar amount attributed to the average customer throughout the lifespan of their membership.
Monitor key subscription metrics related to acquisition, revenue, and retention as they are the key to making the decisions that will support strong growth.
Take a look at this link to understand how easy it is to set up a subscription in Crystallize or download our subscription eCommerce guide.