Optimize your revenue model for subscriptions

Both customer groups have a churn volume of 10%. However, that 10% turns out very differently for the different newspaper groups: Loss of revenue ‘base’ = 10 lost subscribers x €10 euros = €100 Loss of revenue ‘premium’ = 10 lost subscribers x €25 euros = €250 The concept of value churn (or revenue churn ) is important here. The value churn expresses how much model for subscriptions sales you lose in a certain period as a result of customers leaving. In formula: Value churn rate = (lost customer revenue in period n / total revenue at the beginning of period n) x 100%. Of the total value churn of €350, a much larger part is caused by the premium subscriptions.

The subscription revenue

Namely (250 / 350) x 100% = 71%. In other words, despite the same number of customers and the same volume churn percentage, the value churn can differ enormously due to the different Lebanon Phone Number subscription prices. Companies do not go bankrupt because of high volume churn, but because of high value churn. The moral of this story is that it is essential to monitor (and above all) value churn in addition to volume  churn. Companies with the subscription revenue model do not go bankrupt because of a high volume churn, but sometimes because of a high value churn.

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To optimize your subscriptions

Managing value churn is therefore a top priority within any revenue model with subscriptions. 5. Net Promoter Score (NPS) There are many strategies, tools and techniques to combat churn. Ultimately, however, there is only one really working approach, namely: a great product and satisfied customers. How do you measure customer satisfaction? A proven and commonly used method is the net promoter score (NPS). The core of NPS consists of the question: How likely is it that you would recommend organization x to a friend or colleague? The respondent can answer this question with a number between 0 and 10.

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