If you’re running a subscription business, tracking metrics like MRR, ARPU, and net revenue is critical to growing your business. Having a powerful analytics software like Zoho Analytics comes in handy, as it not only integrates with popular subscription apps like Stripe but also comes pre-packaged with 75+ subscription analytics reports and dashboards to help you leverage your subscription data.
In our previous post on Stripe subscription analytics, we looked at some of the vital metrics you need to track to evaluate the health of your subscription business. In this blog post, let’s dive deeper and learn more about some of the key metrics you should be tracking from the revenue overview dashboard.
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Revenue growth this year vs last year
MRR is one of the great means by which you can track your business health. Solid revenue growth can unlock new opportunities for your company, like expanding to new locations, increasing marketing spend, hiring new talent, and building new products. If you’re an organization that’s a few years old, consistent growth is critical. You may be heading towards a slow death if revenue growth stagnates.
The above chart shows you the running total of MRR in the current year and the previous year. This will enable you to determine how far you’ve come as a business, and how close you are to reaching your revenue target for the current year.
Plan-based revenue
Subscription businesses devise pricing plans to optimize revenue and maximize profits. And SaaS companies have the advantage of modifying their pricing plans whenever needed, based on business and market conditions.
This report shows the distribution of revenue generated based on pricing plans. Using this report, you can gain insights and experiment with different pricing plans, identify the ones that bring in more revenue, which you can then use to build strategies for converting more users and eventually increase revenue.
Churned MRR
MRR churn, to put it simply, is the monthly recurring revenue you lose from the customers who unsubscribed from your service. It is a known fact that your existing customers are more valuable than your potential customers. A minimal drop in churn can increase your customer retention and revenue, but your business is in a critical state and requires immediate attention if your churn rate keeps increasing.
The Churned MRR chart gives you the recurring revenue you’ve lost from customers in each of the pricing plans. We’ve discussed the importance of churn, MRR, and other vital subscription metrics in our previous post. Tracking these metrics will help you assess the performance of your pricing plans, and set up plan-specific action items to tackle churn.
Average Revenue Per User (ARPU) per month
ARPU is a crucial SaaS metric which communicates the average revenue you acquire from your customers. Monetizing your customers more efficiently drives higher revenue to your business. The more you retain your customers, the higher the ARPU, and the greater the growth.
This month over month (MoM) ARPU report allows you to measure the effectiveness of your pricing experiments and understand the value proposition your product delivers to your users.
One of the ultimate indicators of your business growth is your revenue increase. Regularly measuring and acting upon your revenue trends and customer retention goes a long way in shaping the progress of your business.
This is just a glimpse of what Zoho Analytics can do to help you analyze and improve your subscription business. If you are a business owner who needs more personalized information and deep analytics, you can as well build your own reports and dashboards to track the metrics that matter the most to your business.
good post