Success with the subscription business models depends not only on new customer acquisition but also on net retention and customer lifetime value growth.
In fact, our research shows that 70% of subscription revenue on average comes from existing customers. Because of the criticality of retention, customer churn rate has become a key metric to measure the health of subscription businesses. A high churn rate (aka low net retention rate) translates to immediate loss of revenue and overall lower lifetime customer value, two things that subscription businesses need to avoid.
Research from the Subscribed Institute shows that both auto-renewing termed subscriptions and evergreen subscriptions have lower churn rates than standard termed subscriptions. Between evergreen and auto-renewing termed subscriptions, auto-renewing termed subscriptions have a lower churn rate. And lower churn rates translate into higher lifetime customer value.
Get this report to learn more about:
- The two dominant types of subscriptions: Termed and Evergreen
- Churn rate analysis for evergreen and auto-renewing subscriptions compared to standard termed subscriptions
- The impact of auto-renewing termed subscriptions on customer LTV