Subscription Key Performance Indicators (KPIs)
Subsription commerce plays a big role in what we do at Crystallize. Here is a quick lowdown on the most important KPIs for businesses relying on a subscription business model.
We've explored the advantages and challenges of subscription business models backed by real-world examples from well-known brands using Crystallize in our deep dive blog post. Here, we'll briefly cover the KPIs businesses usually track.
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 amount you earn from customers. To calculate it, divide total revenue by the number of active subscribers.
CAC: Customer Acquisition Cost is the 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 monthly rate you lose customers. It’s a great indicator of how well your business/product/service can 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 amount attributed to the average customer throughout the lifespan of their membership.
Monitor key subscription metrics related to acquisition, revenue, and retention, as they’re the key to making decisions that will support strong growth. Check out our ultimate guide on subscription eCommerce to learn more.
