Analytics for Subscription Business Models

June 21, 2021
Emmanuel Cohen

As more consumers opt for subscriptions, subscription-based businesses are enjoying explosive development. With that expansion comes the need to track subscriber churn, monthly recurring revenue, subscriber acquisition expenses, customer lifetime value,  and a variety of other crucial subscription business model KPIs.

With increased consumer demand for free trials, promotions, exclusive content, and data-driven personalized experiences, subscription brands are under pressure to understand what's driving the most success to scale and sustain the business.

Every subscription firm should be aware of and track key subscription indicators such as acquisition, revenue, and retention. Analytics is the key to making the decisions that will promote good growth since they provide insights based on facts.

Acquisition Analytics
Customer Acquisition Cost (CAC)

CAC is an evaluation of the cost of gaining a new subscriber. It covers marketing, sales, and personnel costs connected with obtaining a customer.

Measuring customer acquisition cost

CAC is important for evaluating Subscriber ROI (Return on investment) because costs influence profit. It also gives insight into the effectiveness of acquisition campaigns and aids in the management of marketing and sales budgets. CAC, when used in conjunction with lifetime value (LTV), can help answer problems like:

  • Is it possible to monetize subscribers faster than it takes to acquire them?
  • How long will it take to recoup your investment, and what are the financial implications?
  • What percentage of my sales and marketing efforts are successful?
  • Is it possible that, when combined with LTV, I'm paying too much to attract clients compared to what they're worth?

CAC varies a lot depending on the industry and the type of firm. Hubspot's benchmarks are useful for establishing a client cost baseline


Get Started on Maximising Revenue!

Book a Demo