Subscription Analytics: Everything You Need to Know
We're covering everything you need to know about subscription analytics — including important metrics to measure and Shopify analytics tools to try out.
Every subscription business owner wants to run a successful shop — and it probably doesn’t come as a surprise that one of the most important components of finding success is understanding your subscription analytics. Knowing what is and isn’t working well is vital in order to understand the health of your subscription offering and optimize your Shopify brand overall.
We know the concept of measuring and understanding data can seem complicated — so we’re taking a deep dive into subscription analytics and covering why it’s important, which metrics you should monitor, and the Shopify analytics tools to know.
Let’s dive in.
What Is Subscription Analytics?
When we talk about subscription analytics, we’re referring to the act of both tracking and displaying any data related to your subscription offering. This can include measuring your number of subscribers, your average order value (AOV), your churn rate, and much more (which we’ll review shortly).
Why Is Subscription Analytics Important?
As for why conducting this subscriber data analysis matters, these metrics are paramount for effectively optimizing and growing your subscription business.
Here are just some ways powerful subscription business analytics can make a meaningful difference in driving data-driven decision-making:
- You’re able to predict the future of your business. Yes, you can’t ever really know the future with complete certainty — but one of the benefits of the subscription model is you can make meaningful predictions with stellar analytics. The great thing about subscriptions (and the reason they’re known for being recession-proof) is that you can achieve accurate sales forecasting by monitoring your monthly recurring revenue (MRR) and measuring your customer lifetime value.
- You can increase your AOV. By leveraging data about your best-sellers as well as products that often get bought together, you can strategically product bundle, cross-sell, and up-sell to your subscribers to boost your AOV.
- You can get personal. Personalization is key in both retaining and engaging your subscribers. Studies show that 75% of US consumers report that they’re loyal to companies that understand their individual needs. The secret to being able to get personal? Data. In addition to collecting zero-party data through quizzes and surveys, analytics can help you delight subscribers with specific product recommendations tailored to each individual subscriber.
- You can monitor and reduce customer churn. Subscription analytics can help you keep a close eye on your churn rate which, in turn, can help inform key retention strategies for your customer base. For example, if you notice a consistent drop-off after month three, that could be a prime opportunity to offer a discount to encourage subscribers to stick around. Enabling cancellation reasons is another effective way to understand why subscribers are leaving and make changes to optimize your business.
The Key Metrics Subscription Businesses Should Measure
Knowing where to start with customer data can feel overwhelming. There’s a reason why it’s called analysis paralysis.
Setting clear goals and knowing what you want to measure are smart ways to avoid this paralysis. As you’re figuring out what’s right for your eCommerce brand, here are the important subscription metrics you should know about to help improve your customer experience and create a stronger subscription offering overall:
Monthly Recurring Revenue (MRR)
Your monthly recurring revenue, otherwise known as the gold standard for subscriptions, refers to how much revenue your subscription brings in each month. This metric can help you keep track of the success of your subscription program, make improvements, and accurately forecast future sales.
Of course, great analytics should measure more than just MRR — but they’re still the necessary baseline for any subscription analytics.
Average Order Value (AOV)
Average order value measures exactly what you’d think: the average amount of money customers spend per order. Maximizing AOV is a great way to drive revenue.
Churn Rate
Churn rate tracks the percentage of subscribers who have opted to unsubscribe. The goal is to use your data to reduce your customer churn as much as possible.
Customer Acquisition Cost (CAC)
Another metric with a self-explanatory name, your customer acquisition cost measures how much it costs to acquire a new customer. Even though the name of the subscription business game is retention, acquiring new customers is still important for any business — and understanding your most effective marketing channels can help reduce these costs.
Customer Lifetime Value (LTV or CLTV or CLV)
This is one of the most important metrics for subscription businesses, as it measures the amount of money an individual subscriber is projected to spend over the course of their entire relationship with your brand. Boosting your LTV results in a healthy and strong subscription business, especially if you keep a healthy LTV:CAC ratio.
🧠 Smartrr tip: The best way to maximize your LTV is to equip your business with an LTV toolkit. With Smartrr, you can drive engagement with a variety of touchpoints like loyalty rewards, referrals, one-time add-ons, trending upsells, and more.
Gross Merchandise Value (GMV)
GMV refers to your total subscription revenue over a period of time and is typically measured quarterly or yearly. It's important to note that GMV doesn't account for any accrued expenses (like marketing, shipping costs, etc).
Number of Subscribers
An obvious but necessary metric, your number of subscribers is always a great figure to know — especially as you measure your growth over time.
There are a variety of strategies when it comes to improving this data, like customer segmentation, cohort analysis, personalization, and customer feedback, to name a few. Play around with different strategies to determine what makes the most sense for your KPIs and audience.
The Problem With Analytics
So let’s say you’ve started your Shopify subscription business, set your goals, and are ready to start monitoring your data. What choices do you have when it comes to analytics?
Currently, Shopify Analytics will give you baseline data. And for merchants that utilize Shopify’s native Google Analytics connection, there is so much technical nuance required — especially with the transition to GA4.
Our friends at Littledata conducted a study of bigger DTC Shopify brands that process over 50,000 monthly orders via Shopify Checkout and discovered that only 88% of the processed orders were correctly recorded in Google Analytics. That’s a substantial amount of data that goes unaccounted for.
To make matters more complicated, subscription businesses typically experience bigger data gaps. Because of the purchase-without-customer-interaction nature of subscriptions, Google Analytics sometimes struggles to accurately track orders. On bad days, it’s been reported to miss up to 93% of Shopify orders. Yikes.
It goes without saying that it’s nearly impossible to make informed business decisions if you’re working with inaccurate data. While you may be wary of pricing when assessing whether you need an additional analytics tool for your tech stack, it really is essential to invest in the right analytics to monitor your subscription business.
Shopify Subscription Analytics Software & Tools
🧠 Smartrr’s Advanced Analytics
Because we know how important analytics are for subscription success, Smartrr equips your brand with Advanced Analytics so you can track the necessary metrics you need to grow and engage customers at every stage of their lifecycle. Powered by Looker, our dashboard gives you real-time information about customer behavior and the state of your business.
Here are just some of the metrics that Smartrr’s Advanced Analytics gives you access to so you can boost your profitability:
- Number of Active Subscriptions
- Upcoming Subscription Volume
- Upcoming Subscription Revenue
- Revenue By Order Type
- Revenue By Product Type
- Subscriber Locations
Plus, with advanced retention data and customer insights, you can find the patterns you need to better delight and serve your audience.
Additional Shopify Analytics Apps
Let’s get one thing straight: Smartrr can cover everything you need for an effective subscription business; however, we know there are many data options in the Shopify ecosystem and that there’s often more to growing your brand than just subscription data. Here are just some tools to consider for an even more well-rounded data set:
Operating as a supplemental resource to Smartrr’s analytics, Littledata is a tracking solution for Shopify brands. Littledata connects directly with Google Analytics to help improve your marketing attribution.
Triple Whale is another supplemental resource to Smartrr’s analytics. Triple Whale provides you with an analytics report card to give you a high-level overview of all of your data in a clear, easy-to-digest way.
If you’re looking for a more robust data option for a deeper dive, Peel offers “All-in-One Retention Analytics” to cover any kind of data your Shopify brand might want.
Effectively measuring and analyzing your subscription data will make a meaningful difference as you scale your Shopify brand. And if you’re looking for a reliable partner to help you maximize your subscriber engagement and take your subscription offering to the next level, send us a note.
Frequently Asked Subscription Analytics Questions
- What is subscription analytics?
Subscription analytics refers to the act of both tracking and displaying any data related to your subscription offering — including measuring your number of subscribers, your average order value (AOV), your churn rate, and more.
- Why is subscription analytics important?
Subscription analytics provides you with key subscriber data that allows you to better serve your audience and create overall business optimizations in an effort to increase customer retention and boost customer loyalty.
- What subscription metrics should my Shopify business measure?
Monthly recurring revenue (MRR), average order value (AOV), churn rate, customer acquisition cost (CAC), customer lifetime value (LTV), gross merchandise value (GMV), and number of subscribers are all helpful metrics to monitor for your Shopify subscription brand.
- What Shopify analytics tools should I consider for my tech stack?
In addition to Smartrr's analytics, which is fully equipped to help you run an efficient and effective business, we recommend Littledata, Triple Whale, and Peel.
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