If you’re running a subscription business, understanding how, why, and when subscribers stay, cancel, or upgrade is critical to your success. Studying your business’s subscription analytics can provide answers.
Subscription analytics help you track recurring revenue, retention, and long-term customer value. This data can help you make better decisions about pricing, plan structure, and how to increase the value subscribers get from your offering.
In this guide, you’ll learn why subscription analytics matters, which key metrics to track, and how to use the data to improve customer lifetime value.
What are subscription analytics?
Subscription analytics refers to a set of data and performance metrics that show how effectively you’re growing and maintaining active subscriptions. These analytics track indicators such as monthly recurring revenue (MRR), churn rate, customer retention, customer acquisition cost, and customer lifetime value.
Together, these metrics act as a performance dashboard for subscription businesses. By analyzing trends in recurring revenue, cancellations, and subscriber growth, you can see whether your subscription model is gaining momentum, losing customers, or delivering enough value to keep subscribers engaged.
Top subscription metrics worth tracking
Subscription analytics focuses on a set of core metrics that reveal how your business is performing. This data can help you evaluate subscriber growth, retention, and revenue trends:
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Number of subscribers. This metric shows the total number of active subscribers at a given point in time, helping you understand the overall size of your subscription business.
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Subscriber growth. This percentage shows how your subscriber count increases or decreases over time, often tracked monthly, quarterly, or yearly.
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Monthly recurring revenue (MRR).MRR is one of the most critical metrics for subscription businesses, measuring the predictable revenue generated from active subscriptions.
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Churn rate. Refers to the percentage of customers who unsubscribe during a given period. According to a study of more than 2,200 merchants, the average subscriber churn rate for consumer goods and retail is 3.9%.
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Customer retention rate. Your customer retention rate identifies the percentage of customers who remain subscribed over a given period.
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Customer lifetime value (CLV). CLV estimates the total revenue a subscriber generates throughout their relationship with your business. For example, if you offer a subscription plan for $20 per month, and your average subscriber stays for 15 months, your CLV is $300.
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Customer acquisition cost (CAC). CAC measures the cost of acquiring new subscribers by dividing advertising or marketing spend by the number of new subscribers.
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Gross merchandise value (GMV). GMV measures the total subscription revenue over a period of time, deducting expenses like marketing and shipping.
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Cancellations and paused subscriptions. Tracking the number of paused and canceled subscriptions (not just the rate) can alert you to problems with customer satisfaction.
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Reactivation rate. This metric measures the percentage of lapsed customers who resubscribe and become active users again.
Many subscription businesses closely monitor the relationship between CLV and CAC to evaluate long-term profitability. Mike Salguero, founder of meat and seafood delivery service ButcherBox, discusses this balance on the Shopify Masters podcast: “I see a lot of people fail in subscription businesses by spending a lot of time on how to drive down acquisition costs, but not a lot of time on how to increase lifetime value.”
Mike has a two-pronged approach to increasing lifetime value. The first is bringing down costs like shipping rates, credit card fees, and even how much the liners in the box cost. Reducing these incrementals means you can make more per customer. Secondly, Mike advises focusing on what it takes to keep the customer: “How do you get somebody not to quit at 10 months but go to 11 months or go to 12 months? Can you throw in a freebie? Why are they leaving at that point? Can you solve that problem for them?”
Your subscription key performance indicators (KPIs) can tell you what your customers’ pain points are, so you can strategize on how to get them to stay longer.
How to use subscription analytics data
Subscription analytics helps you understand why existing customers stay subscribed and how you’re acquiring new ones. You can analyze data from your subscribers to benefit your business in several ways.
Improve retention rates
In subscription businesses, long-term growth often depends more on retaining subscribers than continually acquiring new ones. Regular subscriber data analysis helps you see how well you’re keeping subscribers engaged and where cancellations may be increasing. While tactics like social marketing campaigns can lead to spikes in new subscribers, focusing on customer satisfaction and retention helps you build steadier growth.
Divy Ojha, founder of grocery delivery service Odd Bunch, focuses on retention and early referrals as his key subscription metrics. He tracks retention on a quarterly and annual basis, using it as a scorecard for business performance. “Referrals in the first four weeks is a killer metric—it’s a predictive metric of retention,” Divy says on Shopify Masters. “Virality is rented; retention is owned.”
Tracking key subscription metrics like retention rates and early referrals helps you gauge whether customers find enough value in their subscription to keep it or whether too many cancel after the first few months. For example, if your churn rate rises sharply three months into a subscription plan, it could mean that subscribers were enticed by an introductory offer (like a discount or free trial), but didn’t feel they were getting enough value to continue at full price.
To improve retention rates in this scenario, you could better explain the long-term benefits of your subscription early on, or see if you need to adjust pricing or product offerings to better fit customers’ needs.
Identify what’s driving subscription revenue
Your subscriber data answers a critical question: How much monthly revenue are your subscriptions generating? Running subscription analytics reports regularly shows not only how many subscribers you have, but also how much recurring revenue they produce.
MRR is a key indicator of subscription health because it reflects changes in subscriber activity—such as new sign-ups, cancellations, and subscription plan upgrades and downgrades. When MRR rises or falls over time, you can investigate these underlying drivers to understand what’s affecting your subscription revenue. Those insights can help you optimize your subscription pricing, upsell upgrades to higher-priced plans, or improve your subscription offerings to increase recurring revenue.
Predict future revenue
Analyzing trends in your subscription data helps you forecast future revenue based on current customer behavior. Metrics like MRR, churn rate, and subscriber growth provide signals about how your revenue is likely to change over time.
For example, if churn begins to rise or subscriber growth slows, it may indicate a future revenue decline unless you address the underlying issues. On the other hand, if retention and subscriber growth are increasing, you can project stronger recurring revenue in the months ahead and plan inventory, marketing spend, or product investments accordingly.
How to optimize your subscription analytics
- Choose the right subscription analytics platform
- Practice customer segmentation
- Use qualitative and quantitative data
Once you’re tracking the right subscription metrics, the next step is using that data effectively. These best practices can help you get more value from your subscription analytics:
Choose the right subscription analytics platform
Shopify’s free Subscriptions app features a built-in analytics dashboard, showing KPIs like subscription revenue, active subscriptions, new subscriptions, and cancellations. Shopify also includes sales reports so you can measure key metrics over time, active subscriptions, canceled subscriptions, new subscriptions, subscription sales, and subscriptions versus one-time sales.
You can also analyze subscription performance using subscription analytics software like Subi or Recharge. There are a variety of options to meet your budget or company size, giving you accurate data so you can make informed decisions to boost subscription growth and keep loyal subscribers happy.
Practice customer segmentation
While overall subscription data shows high-level trends, customer segmentation helps you analyze how different customer groups of subscribers behave. For example, you can study customer segments (such as new subscribers, customers who joined through a free trial, or subscribers in different pricing tiers) to understand performance at a more granular level.
Segmenting your audience can reveal which groups stay subscribed the longest, which cancel early, and which plans deliver the most value. Segmentation also helps you personalize your marketing and messaging so you can address the specific needs and expectations of different customer groups.
Use qualitative and quantitative data
You can blend the quantitative data you get from subscription analytics with the qualitative data you get from your customers. The metrics you track will show you that subscriptions are growing or shrinking, but feedback from your customers helps explain why.
Scout Brisson, CEO of non-alcoholic beverage brand De Soi, said in an episode of Shopify Masters that paying close attention to subscriber feedback alongside sales data helps her get a complete picture of the customer journey.
“You take in a bunch of data points when you’re running a business,” Scout says. “Your own feedback is a data point, the buyers’ feedback is a data point, and customer service tickets are a data point. When those data points add up, it’s ‘Aha, this is what we have to create next’ or ‘This is what we’re not doing well that we need to start doing well.’”
Subscription analytics FAQ
What are subscription analytics?
Subscription analytics refers to metrics that show how well you’re growing and maintaining subscriptions. Crucial metrics include total subscribers, monthly recurring revenue, and churn rate.
What are the three types of subscriptions?
The three types of subscriptions are replenishment (automatic, regular deliveries of goods like dog food or snacks), curation (subscription packages tailored to the consumer’s preferences), and access (subscriptions to platforms like streaming services).
What is an example of a subscription model?
An example of a subscription model is ButcherBox, where customers can subscribe to a meat and seafood delivery plan based on their dietary needs and receive regular ready-to-cook shipments. This is in contrast to shopping at a grocery store, where customers make one-off purchases.
