In the first part of our series on metrics and reporting tips for subscription businesses, we covered how to measure value with value metrics by breaking them out into three distinct categories: Business Velocity, Subscriber Usage and Subscriber Support.
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.
- If you’re managing your subscription
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.
- 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.
- 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.