Two business metrics that many recurring revenue business owners keep an eye on are Customer Churn and Customer Lifetime Value.
These are sometimes referred to as core recurring revenue business analytics. Keep an eye on them to make better decisions:
- Customer Churn shows what percentage of customers are leaving each month. Any recurring revenue business will have some churn, but if it gets particularly high, your business can be in real danger of shrinking, as you lose more customers each month than you gain.
- Customer Lifetime Value helps you understand the revenue and profit potential from each customer over time. And this allows you to make better decisions about what you should spend to acquire each new customer. If you have enough capital, you can potentially spend as much money as you want acquiring a new customer, as long as that amount does not exceed the expected Lifetime Value of that customer.
Using our analytics, you can see these metrics for all of your products as a whole, or for each individual product, or for a selection of products.