Today’s focus is on subscriber identities and roles — what they are, how to use them and why looking at metrics for specific roles can help you identify important trends in your analytics. You’ll learn how to empower the Finance team to define and assign subscriber identities and roles in the way that contextualizes data and makes it more meaningful for your organization.

After all, in this new subscription environment, Finance isn’t just measuring performance; they’re helping drive it.

Building Subscriber Identity Records

In the old transaction-based economy, it was enough to keep a static database of customer contact information — but that era has come and gone. Now that your focus has shifted from the order itself to the person doing the ordering, you’ll need to maintain comprehensive subscriber identity records.

This is accomplished by consolidating behavioral, financial and demographic data from disparate business systems, including your CRM, ERP, web analytics, email platform, marketing automation tool and subscription billing platform. Think of a subscriber identity record as your customer’s fingerprint: it gives you an overview of the impact that their behavior, demographics and financial contributions have on your subscription business.

Your subscriber identity records should contain the following information:

• Email, address, phone number, etc.
• Product usage metrics
• Purchase history
• Payment history
• Refund history

Once you know who your subscribers are you can group them into roles. By running reports on each of these roles, you’ll uncover insights that are specific to the different types of subscribers you’re serving.

Defining Subscriber Roles

One way to define subscriber roles is based on the features and functionality that different groups of users are able to access within your offering. To boost recurring revenue, you need to upsell “standard users” to a premium version of your offering with more features and functionality – and then charge these “power users” a premium price.

In subscription reporting, different subscriber roles might also be referred to as “cohorts”. In short, a cohort is a group of users who share a common characteristic or experience within a certain period. It could refer to a group of subscribers who all have the same access level – like, for example, your “power users” – or it could simply refer to a segment of users who all signed up during the same month.

According to Cohort Analysis 101, cohort analysis is useful in subscription billing because it lets you identify relationships between
the characteristics of a specific population
and that population’s behavior.

Assigning Subscriber Roles

Now that you’ve defined your roles, it’s time to assign them. Assigning the right subscriber roles can be tricky because it isn’t immediately obvious which roles will reveal trends that are actually valuable for growing your business. So how exactly do you figure out where the best data is hiding? The answer: leveraging powerful predictive analytics to apply a role, or multiple roles, to each subscriber identity.

Machine learning software accurately identifies trends in customer behavior without the risk of human error. It’s intelligent enough to refine its predictions as you feed it more and more data.
The result? An unbiased overview — and forecast — of how different subscriber roles (or cohorts) will impact your bottom line.

Why invest in predictive analytics for your business?

• Quickly segment complex analytics by subscriber role
• Understand how customer behavior powers product innovation
• Easily track engagement scores and lifecycle moments

Wrapping It All Up

Between part one of this series and today’s conclusion, the ultimate question is this: How do you ensure that the Finance team has the resources they need to effectively measure and track your business performance while driving future growth and profitability?

Well, you have a couple of options.

1. If you’re managing your subscription
   program in-house…

   You’ll need to closely inspect all of your business tools (whether developed internally or outsourced) to ensure that you have solutions in place for all of these capabilities. Then, you’ll need to link of these systems together. That’s how you get those subscriber identity records – plus a holistic view of the health of your business.

1. If you’re using a payment processor or subscription billing platform…

   You might find that your provider is not offering real-time insight into your revenues and cash flow. If you can’t seamlessly consolidate your customer and financial data, you’ll never have an accurate view of your business’s performance.
   Evaluate the time and resources required to manually feed data into different business tools and systems – and also consider the room for error.

1. You can partner with a a flexible, comprehensive, end-to-end subscription billing solution that specializes in helping businesses like yours go global, fast. This enables the Finance team to quickly track and analyze key metrics, measure customer satisfaction and identify opportunities for optimization — not just reporting on your business, but driving it.

Regardless of what you choose, you’ll need the capabilities to:

• Combine your financial and behavioral data
• Track your subscribers’ buying journey from start to finish
• Measure how your customers are engaging with your offering
• Monitor the health of individual subscribers
• Group subscribers by common traits and behaviors

Enjoy this two-part series on subscription metrics and reporting tips? Good news!
You can download our free white paper or view the SlideShare below.

The post Subscription Metrics & Reporting Tips, Part 2: Subscriber Identities & Roles appeared first on cleverbridge.

If your focus is on offering the best customer experience, whether in terms of your product or billing, 2017 is going to force you to focus on some crucial questions.

• What is the true cost of managing customer billing and payments in-house?
• How can you effectively acquire and retain cross-border shoppers? Are there any risks?
• How do subscription businesses increase customer lifetime value?
• How does an API-based ecosystem improve my business?

The following compilation of subscription billing ebooks will help you answer all those questions and others.

What Are the Hidden Costs of Your In-House Subscription Billing Solution?

It may seem like building a subscription billing solution is something you can handle on your own. But maintaining a homegrown solution carries with it significant hidden costs. As your business grows, can you scale with your increased volume? Will simply maintaining your infrastructure take resources away from improving your core offering?

Don’t let the hidden costs of an in-house solution bleed your business dry. Check out our microsite to learn more.

7 Tips for Growing Your Global Subscriber Base

Selling subscriptions in international markets is more complicated than simply translating your marketing website and order process into new languages. To grow your global subscriber base, customers need to be approached in a way that makes sense in their local context. In fact, there are seven key areas every subscription business must address when they start selling in new regions.

Download this ebook to learn all about localizing your subscription business for international markets.

Aligning Your Subscription Business With APIs

Manually keeping your product catalog, marketing strategy, subscription reporting and customer self-service options aligned across multiple systems costs resources and ultimately erodes your bottom line. But there is a better way. A subscription business using APIs is aligned to maximize customer satisfaction and recurring revenue.

Download the ebook to learn more about reducing time and effort managing billing and payments.

Increasing the Lifetime Value of  Subscribers

Getting a customer to subscribe doesn’t guarantee that they’ll stick around forever. If you want to retain their business for as long as possible, make sure that you’re offering ongoing value to your subscribers. This guide dives into optimizing for long-term subscriber relationships and profitability.

Inside the ebook you will find for more tactics for increasing the lifetime value of subscribers, such as:

• Reducing subscriber churn
• Deepening subscriber usage
• Increasing upgrades and add-ons

3 Compliance Risks for Global Subscriptions

You want to boldly venture into new markets, but wily dragons in the form of ever-changing global compliance regulations lurk at every turn. Violating these regulations can damage your business’s reputation and your bottom line.

This ebook covers everything you need to know about increasing global revenue while effectively managing your risk. That starts by:

• Offering shopping experiences that comply with local legislation
• Obtaining customer consent for email and other marketing efforts
• Ensuring data privacy and information security by complying with a variety of industry standards (PCI DSS, ISO27k and GDPR)
• Collecting and remitting taxes

Do Subscriptions Make Sense for Your Business?

How can you be sure that a subscription model is what’s best for your business – and for your customers?

This ebook covers everything you need to consider, like:

• Which type of subscription model best fits my business?
• What are the pros and cons of subscription billing?
• What do all successful subscription businesses have in common?
• Will a subscription model ultimately benefit my customers?

Subscription Metrics and Reporting Tips

Financial and revenue metrics are the responsibility of your Finance team (they love that stuff). But in today’s subscription environment, the role of your Finance team is changing. They’re no longer just the cost accountant, measuring overall business health; now they’re actively driving growth across all functions within your organization.

In this ebook, you’ll learn tips and tricks for developing a subscription metrics and reporting strategy that enables your Finance team to:

• Measure value with subscription metrics
• Assign useful subscriber identities
• Analyze and report by cohort and subscriber role
• Determine the most meaningful insights for your business

Keystone

For us, the focus is on the customer experience. Something that seems as simple as a monthly or annual renewal means that the design and function of your site, marketing emails, sign-up process, payment and billing, renewal and cancellation events are all acting in concert. By solving these challenges, you can expect greater recurring revenue and less churn.

The post 2016 Roundup: Subscription Billing Ebooks appeared first on cleverbridge.

• What attracts and converts new users into subscribers?
• Are your subscribers engaged for the long-term?
• What’s your monthly/annual recurring revenue – and how can you increase it?
• How can you penetrate new markets and reach new customers?

Financial and revenue metrics are the responsibility of your Finance team — trust us, they love that stuff. But the role of your Finance team is changing. In today’s subscription economy, the Finance team is no longer just the cost accountant. They’re now the business value architect, and they have the power to drive growth and profitability for your entire business.

What does that mean for your metrics and reporting strategy? Well, it means that instead of relying on a strategy that simply lets your intrepid team of number crunchers measure growth and profitability, you need one that will enable them to help drive it across all functions within your organization.

This blog entry is the first in a two-part series on metrics and reporting tips for subscription businesses. In this series, we’ll cover how to use specific metrics and subscriber roles to understand how existing business potentially impacts future revenue as well as subscription processes across your organization. Today, let’s discuss how to measure value with metrics.

Measuring Value With Metrics

You can define your own metrics based on what matters to your business. But luckily, there are some standard value metrics that every subscription business should be monitoring, so you don’t need to start from scratch.

We’ve classified these value metrics into three categories: Business Velocity, Subscriber Usage and Subscriber Support.

Business Velocity Metrics

What they tell you: Is my business profitable and operating efficiently?
How to use them: To increase the efficiency, quality and consistency of your business operations; to invest in the right technology, projects and personnel; to expand into new global markets

Subscriber Usage Metrics

What they tell you: How do my users navigate and engage with my offering?
How to use them: To uncover unique opportunities for optimization; to discover new and unexpected use cases and user segments; to define subscriber identities

Subscriber Support Metrics

What they tell you: Is my customer’s experience with my product/service a positive one?
How to use them: To improve your checkout flow; to optimize your offering’s UI/UX; to decide which features to add or remove; to make your purchase process more secure

Value Metrics Don’t Live in a Vacuum

And they shouldn’t be confined to your Finance team. Instead, metrics should be owned jointly across all departments within your organization. Your CEO, CIO, CTO, CMO, VP of Sales and all other key stakeholders must be held accountable for transparently providing and contextualizing analytics on all business activities they own.

In the next post in this series, we’ll discuss subscriber identities and roles — how to build accurate and up-to-date subscriber records, and how to subsequently define and apply subscriber roles that will help you identify important trends in behavioral, financial and demographic data.

The post Subscription Metrics & Reporting Tips, Part 1: Measuring Value With Metrics appeared first on cleverbridge.

• Access metrics essential to your subscription business like MRR, CLTV, CAC and churn rate and other important analytics essential to your subscription business.
• Use heat maps to get a global view of your business, uncovering opportunities for expansion and ensuring your business is focusing on the right regions.
• Segment customers into cohorts and custom lists to understand who’s driving the growth of your business and answer complex questions around where to invest next.

For more information click here.

Read on for our latest blog post on subscription analytics.

Subscriptions Are Different From Perpetual Licenses — Don’t Treat Them the Same

In traditional ecommerce, software was sold as a perpetual license, and one of your primary measurements of success was your conversion rate. To succeed and grow, all you had to do was generate more traffic and raise conversion rates.

The subscription model upends this whole notion of success. In addition to acquiring new customers, your business must focus on building long-term relationships, and that means shifting the focus of your KPIs.

Although initial transactions are important to sustaining your revenue, subscription success really lies in maximizing renewals.

Instead of asking transaction-centric questions like, “What was our conversion rate last month, and can we improve it by a couple percentage points next month?” here’s the type of question that will be a lot more valuable to your subscription business:

“We know that adding additional offline payment methods increases conversion rates in certain European countries. Will offering those region-specific payment methods increase initial conversion rates and subsequent renewal rates? Or, will it increase the former but reduce the latter?”

When you focus on maximizing renewals and ask these types of questions, you’re setting your business up for subscription success.

But asking the right questions won’t help if you haven’t adopted the right KPIs.

Subscription KPIs Are Different — Don’t Treat Them All Equally

Advanced reporting and analytics are key to every subscription business’ success. But to take advantage of your data, you must adopt metrics that are focused specifically on subscription analytics. We discussed some of these more deeply in a previous post, but five of the most important KPIs to a company selling subscriptions are:

• Annual or monthly recurring revenue (A/MRR)
• Churn rates
• Customer lifetime value (CLV)
• Customer acquisition cost (CAC)
• Average revenue per account (ARPA)

A few very important notes about these subscription KPIs:

• It is VERY important that your CAC is lower than CLV. Ideally, you want this number to be higher than a 2-to-1 ratio.
• Another potentially important KPI is the number of months it takes to recover your CAC. This is calculated by: CAC / ARPA.  This number will tell you how many months a customer needs to be your customer to cover the cost it took to acquire them in the first place.
• ARPA is calculated by: The sum  of all your customers’ MRR / # of customers.

[Learn more about integrating your data with advanced subscription reporting tools like ChartMogul]

However, even if you define the right problems and ask the right questions, if you don’t segment your customers properly, your quest for data-driven insight is doomed from the start.

Subscription Users Are Different — Don’t Treat Everyone the Same

The free-trial user who became a paid subscriber and then dropped off at the first billing interval does not hold the same value to your business as the customer who subscribed for nine months and then churned away. And that customer isn’t nearly as important as the customer who has been with you for 18 months. Your limited and, therefore, precious resources should be dedicated to those areas where they can make the biggest impact to your business.

But subscription companies too often focus on acquiring to the detriment of retaining. So you try to bring on a bunch of customers with discounts. This helps you get that initial transaction. And yes, that is important. You have to acquire new customers in order to grow. But is that customer who signed up with a discount on his first month going to stick with you for the next 24 monthly renewals? Or the next two annual ones? Spending all your time and money trying acquire new users who may or may not be there for you next year is not an effective strategy without an even stronger focus on retention.

Instead, focus on power users.

Here’s why:

Not only are they the ones using your product to its fullest, they’re also your advocates to the rest of the market. On top of that, they’re the people who are going to provide the best feedback about your product.

The customer who only signs up to use your product for a week because they had an urgent need won’t provide the same quality of feedback as your loyal customers who have a sustained need for your product.

Those power users are the ones who can tell you what your product’s real strengths and weaknesses are. Why do they love your product and what would make them even happier? That’s invaluable information, especially in this era of customer experience where fickle customers are quick to jump ship in favor of the latest technology or the equivalent technology at a more affordable price.

Keystone

To successfully implement subscription analytics, first define what your goals are, and then determine which data is important to helping you achieve that goal. And don’t forget to segment your customer database into useful categories.

Ryan Sheppard has spent the past 11 years in ecommerce, digital marketing, and consulting services, working for companies such as Gartner, and Shell. Ryan is a member of cleverbridge’s Key Account Management Team and Master in Computer Science with a focus on Ecommerce Technology candidate at DePaul University.

Karen Kozlowski, Client Manager at cleverbridge, contributed to this article.

The post Understanding Subscription Analytics appeared first on cleverbridge.