• The first is The Retention Trends Report.  It’s designed to anticipate revenue lifts or drops early, while outcomes can still be influenced.  It’s the simplest and most powerful retention report to manage your business.
• The second is The Retention Detail Report. It enables you to understand, compare and improve the detailed drivers behind retention rate and revenue performance.

The first report I’ve described above is the American Jeep of your army – easy to use, simple to build, but not designed for the complexities of heavy battle.   In contrast, the second report is a Sherman Tank.  It’s more complicated to assemble and use, but powerful enough to blast through almost any question you can ask about your subscription business.

What is The Retention Trends Report?

As with all retention reports, the Retention Trends Report is based on selecting a month’s-worth of subs to segregate and observe over a period of time in order to understand attrition behavior and adapt your marketing timing and strategy to minimize attrition and maximize retention.

Specifically, it compares performance of each start group against historical performance in order to spot changes early.  It’s based on “Simple Retention Rate” – the number of subs still active divided by the number who were active at the start of the time period measured.

It can be used for renewals OR it can be utilized to focus on the first year of the subscriber lifetime.

The Objectives

The purpose of this report is, quite simply, to anticipate and act.  If you identify a rising trend in performance early, then you can investigate what you’re doing right and do more of it.  But if you recognize the rising trend a year after it’s occurred, it’s much harder to go back and figure out what you were doing right.

So if you wait to do your homework until after Rome has fallen, you aren’t going to be able to do much to save it.  But if you’re alert enough to spot the cracks in the empire early, you still have time to do something about it.

An Added Opportunity

In addition to tracking trends, The Retention Trends report enables you to spot your best retention marketing opportunities.  This is because attrition usually happens in “steps”, typically after each billing event.

Your biggest “step” is your biggest opportunity.

In other words, if you lose 30% of your subscribers in the first three months and the remaining 10% throughout the rest of the year, where should you focus your marketing efforts?  On the first three months, right?  Because that’s where you have the most bodies to save.

A Description of the Retention Trend Report

In its table form, the report shows cumulative months in the customer’s lifetime across the top.  Then start months appear down the left-hand side.  The data in the table shows the percentage of original starts (subs at the beginning of the measurement period) that are still actively paid each month.  The top row shows the historical average.  It’s designed to enable you to easily compare the two.

You’ll also find it helpful to chart the data in a graph as well, as I’ve done for you below.

Here are three examples of the Retention Trend Report in use, with commentary illustrating three common patterns to watch for.  (I know, their names sound like Yoga positions!)

The Retention Detail Report

Now, a bit about the Retention Detail Report which I described as your Sherman Tank.  It’s more complicated to assemble and use, but powerful enough to blast through almost any question you can ask about your subscription business.  See how we covered using this report by viewing our on-demand tutorial.

This report is designed to enable you to track all of the key drivers of your retention behavior.  It tracks both bodies and revenue, i.e. the number of subscribers as well as total revenue.  Ideally, you should be able to customize it with columns that are based on a number of different criteria.  These should include a choice of either start date, original purchase channel, test cell or initial offer (Free Trial, discounts, etc.).

While we review it in more detail in our on-demand tutorial, here’s a screen shot to whet your appetite (or terrify you with detail, but don’t worry, we make it easy to understand and read in 3 minutes or less):

See Part III for a detailed excel workbook for INSIDER Members to track customer retention using the concepts in this series.

Bill Baird, our INSIDER Guide to Inside Metrics, is a leading Internet subscription marketing advisor, specializing in insightful metrics and marketing practices to help subscription-driven online properties convert and retain more visitors and customers. His clients have included AmericanGreetings.com, Consumer Reports Online, Socrates.com, Edweek.org, Merriam-Webster.com, The Motley Fool and numerous others.  He is a contributor to numerous industry trade magazines and websites, as well as a popular speaker for a variety of web marketing trade organizations. (Read Bill’s full Bio)