Unlike traditional financial metrics, subscription metrics are forward-looking metrics that give insight into your customer’s success as well as the health of your business. From ARR to churn, learn from best-in-class companies how your metrics can drive growth.
Iain Hassall, VP Finance, Zuora & John Burke, CFO, Siteminder
2. More Bookings. More Profitably.
Attract, reach and convert guests
with
the leading cloud platform for hotels.
The world’s leading subscription
management platform
4. are demanding new consumption models
6.8 BILLION
80% OF CUSTOMERS
Potential subscribers on mobile, social, web
- The Economist 2014
WE NOW LIVE IN A
SUBSCRIPTION ECONOMY
6. From a focus on
products…
…to a focus on relationships
customer
product
channels
service
channels
experience
subscriber
7. US 13%28%
AU 24%43%
UK 25%23%
51%
“Over half of companies are in the process of changing or
have changed the way they price and deliver their goods
& services.”
BUSINESSES ARE RESPONDING
TO NEW CONSUMPTION
MODELS
9. ARRn + ACV - Churn =
ARRn+1
THE BASIC BUILDING BLOCKS
10. THE THREE MAIN
DRIVERS:
• Efficient ARR growth
• Churn measurement and
management
• Balancing a strong
recurring profit margin
with a need to continually
enhance your product
11. Annual Recurring Reven
Measured by Growth
Efficiency Index (GEI)
No single number is correct.
Adapt to your business
Can no longer apply growth
at any cost
Pricing and packaging and
sales compensation plans
must adapt
Efficient ARR growth
12. ChurnChurn
Measure in a way that
provides the best insight into
your business:
- Raw dollar churn
- Net retention
- Cohort analysis
If you spend a lot to acquire
customers, your churn needs
to
13. Recurring Profit Margin
Measured as Recurring
Costs (R&D, G&A, COS)
against entering ARR
Align the business around
growing spend in
proportion
to ARR growth