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6 KPIs you can’t ignore if you run a subscription business

Insightful analytics that are driven by a deep understanding of customer behaviour can make or break your subscription business.

The right KPIs can become your north-star metrics and give you just the information you need to streamline operations, reduce churn and drive your subscription growth.

Here are 6 KPIs you can’t ignore if you run a subscription business:

01. Clear-cut revenue data on your subscription business health 

Revenue stands as one of the most important KPI for DTC subscription brands.

With just 5 simple metrics, you can get a clear overview on how well your subscription business is performing revenue-wise.

  • Active Subscriptions - The total number of subscriptions that are currently running
  • Active Subscribers - The total number of people that have subscribed to your business
  • Subscription Revenue - Revenue attributable solely to subscriptions
  • Upcoming Potential Revenue - Forecasted revenue based on upcoming subscription orders 

These metrics show you an accurate picture of your revenue data.

02. Subscription growth data over recent times

One thing as important as retention is growth for DTC subscription brands.

If you’d like to see how your subscription business has grown over the last 30 days or 6 months then you can narrow down your data to this time period and find out important metrics like:

  • New Subscriptions Growth - How many new subscriptions were added in this period
  • Paused/Cancelled Subscriptions - How many subscriptions were paused or cancelled during this period
  • Subscription Revenue - How much subscription revenue was earned during this period
  • Subscription Orders -  How many subscription orders were processed during this period

Data over a short period say 30 days helps you identify the health of your subscription business in recent times.

Quick Tip: Did you know that brands lose ~15% of the revenue just between skip and paused subscriptions even before the payment is attempted. This happens because of the Upcoming Order Reminder email. 

A lot of opportunities exist in designing a very good upcoming order reminder email. Here’s what you can do:

  • Add Delay Subscriptions CTA instead of Skip 
  • Talk about upcoming subscription rewards in this email 
  • Offer powerful one-click upsell with upcoming orders - think adding merchandise at $1 and whatnot.

03. Product forecast data for accurate inventory management

The best part about running a subscription business is higher predictability - both for future revenue and upcoming inventory. 

Inventory forecasting becomes all the more important then to make sure you don’t go out-of-stock and are shipping orders on time.

Derric Haynie runs a powerful community for DTC folks - EcommerceTech

Loop gives you a neat inventory forecast data that shows how many units of specific products have to be shipped for the next 7/30/60 days respectively.

This ensures the best inventory management for subscription-first DTC brands.

04. Highly pointed Churn data to track revenue loss month-on-month

Churn is arguably the most important metric for DTC brands. It’s a great KPI and can be easily tracked every month to understand your subscription business health.

Loop gives you monthly churn rates along with revenue lost each month due to this churn.

Tracking this over several months will help you realize how well you are retaining subscribers over the longer run. 

Reduced churn means improved retention rates

05. Understanding reasons behind subscription cancellation

Cancellation Trends

Another useful KPI is a subjective understanding of your customer psyche and why they are cancelling.

If you have cancellation flows embedded in your exit survey, then Loop gives you a numerical dashboard view of what are the major reasons behind churn every month.

For instance in one month the highest number of cancellations might be attributed to “too much stock” while “too expensive to continue” might become a pain for most customers in another month.

You can easily read this data and keep a close check on the cancellation trends to take corrective action accordingly.

Order-Wise Cancellations

Another useful churn related KPI is Order-Wise Cancellations where you can specifically point out after how many orders does the cancellation takes place. 

Does it happen right after the first order - if yes then you have a second order churn problem. Does it take place between 5-10 orders or more? 

Second order churn is a major problem that DTC founders dread

Usually the higher the number of orders before a cancellation happens, the better your LTV is. And shorter would be your payback period.

William Herlands is the founder of Fondue - powerful Cashback App on Shopify

06. Get your Dunning Management right with Revenue Realisation trends

One thing that’s worse than churn is passive churn i.e. churn arising due to failed payments. To solve this you need a good dunning management system.

Loop helps you see how much revenue you are realising/failing every month - this serves as a indicator of how healthy your dunning management practices are.

Patrick Campbell is the founder of Profitwell - a subscription platform for B2B SaaS

If you have a great dunning system set-up where you’re timely reaching out to customers with SMS/Email to update their payment details, then you will see your failed revenue reduce month-on-month and vice-versa.

Another KPI to assess your payment failure subjectively is identifying the major and minor reasons behind payment failures. Loop gives you a clear overview of all the payment failure reasons every month - and which ones are becoming a major contributor to payment failure.

With over 300+ data points, Loop analytics gives you insightful data that is actionable and easy to understand. 

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