Dedicated subscription dashboards and reporting

• Monthly recurring revenue (MRR)<
What does it measure?
This is the revenue generated monthly through subscription business. It covers both new subscriptions and renewals.
How do we calculate it?
It is the sum of all amounts paid by your customers from orders related to subscription creations or renewals for a given period (usually a given month).
How to interpret it?
This metric is not actionable by itself, but it gives a good snapshot of your current business, and also valuable insight into the predictable revenue.

• User retention rate
What does it measure?
It gives the proportion of users who stay engaged in your subscription business, regardless of their willingness to do so.
How do we calculate it?
It is the proportion of subscriptions renewed compared to the number of subscriptions expiring for a given period (usually a given month).
How to interpret it?
This metric is the main retention KPI, it is used to forecast future revenue and estimate your customers expected lifetime.

• Intentional churn rate
What does it measure?
It gives the proportion of users who expressly refused to stay engaged in their subscription, among the subscription expiring for a given period (usually a given month).
How do we calculate it?
It is the number of suspended and canceled subscriptions compared to the number of expiring subscriptions for a given period (usually a given month).
How to interpret it?
When churn ration is bad or increasing, something is probably going wrong in the offer / the price / the product / the end-user experience, etc…
Contrary to what is commonly heard in the subscription business literature, there is no such thing as a “standard” churn rate that should apply to any healthy business. Your “acceptable” churn rate should depend on many factors such as your target market (especially B2B vs. B2C or SMB), the size of your company, your specific industry, how well established is your brand, the strength of the competition, etc.
It is also important to be clear on the definition itself, especially when you compare your performance to external sources: we are talking of annual churn rates, and a 10% annual churn means less than 1% monthly.

• Renewal rate
What does it measure?
This is the key indicator for the efficiency of the renewal process: it gives the proportion of users who wanted to stay engaged and succeeded in doing so. It is usually higher than the user retention rate, as it does not include cancellations in the reference population.
How do we calculate it?
It is the proportion of subscriptions renewed compared to the number of subscriptions eligible for renewal for a given period (usually a given month). The eligible population is retrieved from the expiring, from which we remove all the cancellations.
How to interpret it?
Contrary to user retention rate, this is not related to the level of engagement of your customers, but rather to the process efficiency: when renewal ratio is bad or decreasing, something is probably wrong in the renewal process or the payment… Smart replay can help! A high renewal ratio demonstrates an efficient renewal process.

• Lost rate
What does it measure?
The proportion of users who leave their subscription, intentionally or not (so the opposite of the user retention rate). In most cases, this represents the intentional churners + the payment failures.
How do we calculate it?
It is the sum of suspended, canceled and expired subscriptions compared to the number of expiring subscriptions for a given period (usually a given month).
How to interpret it?
As for the user retention rate, this KPI, which is not actionable by itself, helps to calculate the customers’ lifetime value, and thus the predictable revenue.

• Customer Lifetime Value
What does it measure?
It gives the average revenue to be expected from an end-user all along his subscription lifecycle.
How do we calculate it?
This calculation is more complex than the other subscription KPIs.
It is commonly obtained by combining the lost rate and the average order value, following this formula: (ln(2)/ lost rate) x 1.5 x AOV)
It helps to make decisions on the investments to be done on acquisition and / or retention. It is usually compared to the acquisition costs.