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Recurly Report Analyzes Trends in Customer Retention Metrics for Booming Subscription IndustrySAN FRANCISCO, June 29, 2016 /PRNewswire/ -- Recurly Inc., the enterprise-class subscription management platform, today released the Recurly Subscription Snapshot, an extensive report examining a sample set of 25 million subscription transactions to identify key metrics for customer retention. As more businesses embrace the subscription model, these customer retention metrics are essential to optimize revenue and maintain healthy growth. "Companies of all sizes, from start-ups to global businesses, are turning to the subscription model to build healthy and loyal relationships with their customers over long periods of time," said Dan Burkhart, CEO of Recurly. "The metrics identified in our analysis provide guidance for product, promotions, and operations to help subscription businesses better understand how to maximize customer loyalty, leading to increased growth rates and revenue." The report categorized the sample of 25 million recurring transactions generated throughout 2015 as either business-to business (B2B) or business-to-consumer (B2C). Ninety percent of transactions involving physical goods fell in the B2C category, reflecting the popularity—and wide variety—of box-of-the month offerings, as well as consumers embracing monthly deliveries. The digital goods category displayed more variety, with 25 percent of transactions actually originating with B2B companies—underlining the rise of software-as-a-service (SaaS) and cloud-based platforms. Since customer retention rates ultimately determine whether a recurring revenue business is growing profitably or not, the report analyzed three key metrics for subscription businesses. Churn, or customer attrition, reflects how well products and services satisfy customers over a period of time. Churn can be voluntary, as dissatisfied customers cancel their subscriptions, or 'involuntary,' due to invalid credit card information on file. The latter case is especially important for recurring revenue businesses as otherwise satisfied customers can be lost in this scenario. Credit card declines is the second key metric. Whenever a credit card is used, the risk of failed transactions, or 'declines,' is present, requiring careful management to ensure the transaction proceeds smoothly and the cusomer is retained. While most transactions are successful, the nature of subscription businesses provides opportunities to 'recover' revenue that might otherwise have been lost to credit card declines or churn. This is especially important at renewal time for subscriptions. Proactive management for these metrics results in increased revenue, higher rates of customer retention, and greater customer lifetime value.
"Each billing cycle offers an opportunity to create and enforce customer loyalty by reinforcing value," Burkhart added. "Retention is vital to the success of subscription-based companies, creating economic loyalty and granting companies predictable revenue streams. Understanding and managing the metrics we have identified in our report, especially churn, will help businesses form closer relationships with their customers and deliver predictable revenue." For more information and analysis on these metrics download the Recurly Subscription Snapshot. Methodology About Recurly PR Contacts: Janelle Dickerson, Zeno Group for Recurly
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/recurly-report-analyzes-trends-in-customer-retention-metrics-for-booming-subscription-industry-300291792.html SOURCE Recurly, Inc. |