For many, it can feel like learning a new language. But understanding terms like net retention rate, churn, and monthly recurring revenue—just to name a few—are essential if you want transparency into your company’s performance so you can make the right decisions going forward. Unfortunately, many newcomers to subscriptions get lost in the perceived complexity of subscription metrics. And, to be fair, subscription models are complex, due to frequent changes and highly variable characteristics, like flexible terms, upsells, downsells, and discounts. Subscription revenues aren’t based on one-time, make-the-sale- then-walk-away transactions.
Subscriptions are based on ongoing relationships that can change from month to month, so ensuring an ongoing optimum subscriber experience is essential to keep the revenue flowing. With these challenges in mind, we sought out the expertise of Shahin Kohan, President of AIMS360, the leading provider of ERP software for fashion brands.
AIMS360 transitioned to a subscription model in 2017 because they wanted to build better customer relationships and grow recurring revenue streams. AIMS360’s customers purchase monthly subscriptions for services like customer management, order management, processing, production, inventory, and more. With over 500 customers of every size and level of business sophistication, and over one billion in orders processed last year, AIMS360 needs to deliver a wide variety of different subscription products while keeping track of how the business is performing. So which metric is the best, in Kohan’s experience? The answer might surprise you.