Offering subscriptions is a great way to add an additional recurring revenue stream for your business. In addition, if you have customers that receive the same order on a consistent basis, it makes it easy to predict your future monthly sales. So let's take a look at your MRR Development.
Definitions
Once you have integrated RetentionX with your Recharge account, a core element is analyzing changes to your monthly recurring revenue. To do this, RetentionX watches the movements between the different MRR components. The six MRR components are:
| New |
MRR added by new subscribers |
| Reactivations | MRR added by recovered subscribers |
| Upgrades | MRR added from upgrades of existing subscribers |
| Downgrades | MRR lost from downgrades of existing subscribers |
| Churn | MRR lost from churned subscribers |
| Existing | MRR generated from existing subscriptions |
Based on these components, we calculate the metrics:
| MRR | Monthly Recurring Revenue, calculated by Sum of monthly Gross Revenue from subscriptions |
| ARR | Annual Recurring Revenue, calculated by 12 x MRR |
| Net New MRR | MRR added from new subscribers, reactivations, and upgrades after churns and downgrades |
| Net New MRR YoY | Growth rate of your net new MRR against last year |
| Net New MRR MoM | Growth rate of your net new MRR against last month |
Example
Before diving into data analysis, let's make sure we're on the same page and take a look at a fictional subscriber and see how RetentionX uses MRR movements to organize and report on changes your customers make to their subscriptions:
New
Your customer John purchased a yearly subscription to Product A. You charge him $1,500. He might have shopped before at your store but never subscribed to any of your products. RetentionX classifies the MRR as New with a value of $125, calculated by $1,500 / 12.
Upgrade
A few months later, John purchases another subscription to Product B. You charge him another $100 per month. RetentionX adds $100 MRR and - as the MRR increases for this existing subscriber - classifies it as Upgrade.
Downgrade
Another few months later, John decides against Product B and cancels his subscription. Since he has another active subscription, RetentionX classifies $100 as Downgrade (rather than Churn).
Churn
John approaches the end of the first year of his subscription for Product A and decides to cancel this as well. As this was his last active subscription, RetentionX classifies the cancellation as Churn and reports the churn at the end of the billing period as he already paid for the entire year.
Reactivation
Great news: John re-subscribes! This time, he choose Product C. You charge him $100 per month. As a former subscriber, RetentionX classifies the MRR as Reactivation with a value of $100.
What You Need
For this report to work properly, the following data must be imported:
- Recharge integration
- Order ID
- Order Date
- Stock Keeping Unit (SKU)
- Items Sold
- Item Price
- Customer ID
- Discounts
- VAT
- Shipping Revenue
- Product Returns
- Product Return Dates
- Subscription Start Date
- Subscription End Date
- Subscription Frequency
How to Get More Details
All metrics are shown as a color-coded stocked bar chart followed by absolute figures. Use pagination to scroll through the months. The current month is always highlighted as a reference point.
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