5 Subscription App Metrics And KPIs To Grow Fast In 2022

If you just launched a subscription app that you've been working on for months, the question you may fairly ask is how can I measure my app's success? Considering the great amount of the app's backend data, it can be extremely difficult to understand which KPIs you should focus on. And to make your life slightly easier, in this article, we'll disclose five essential app metrics that will help you grow your app and increase your profit.

In our previous articles, we have already told you how to sell an app and increase your app's revenue in 10 minutes. However, this time, we would like to focus on key app metrics that should become your best friends in improving your subscription app. We'll tell you what the most important Key Performance Indicators (KPIs) for mobile apps with subscriptions are and how to measure their performance.

The subscription app market keeps growing and has a great variety of advantages: higher revenue, endless opportunities for monetization, and dedicated users. No wonder why developers are attracted by this business model so much. However, subscription apps also bring greater responsibilities. You have to continuously upgrade your content, offer new features, provide customer service, and remove any possible bugs immediately.

That's where KPIs come on the stage. If you track app metrics, you'll have all the data about your app's performance, engagement, growth, and retention. With this information, you can improve your product, expand your target audience, and attract more investors. At the end of the day, everybody wins. Your clients are satisfied with the service and are willing to pay monthly. You keep increasing your profit, while investors see great potential in your product and hand you a check with six numbers.

But how can I measure the performance of my subscription app, you may ask. To answer this question, we compiled a list of the most important KPIs that will enable you to do it efficiently:

• Average Revenue Per User (ARPU) & Average Revenue Per Paying User (ARPPU)
• Monthly Recurring Revenue (MRR)
• Churn Rate
• Retention
• Conversion Rate

In the following chapters, we'll explain each one of them in detail. So, keep reading!

As you already know, mobile app marketing is based on data where the metric is a quantifiable value to track the progress and success of your app. In the subscription business, developers use metrics to measure whether their product keeps growing to achieve established goals. 

So, here are five key performance indicators that will help you to grow your subscription app!

One of the main goals of any mobile business is to maximize revenue. ARPU is one of two critical values for calculating your return on investment (ROI) and cost per install (CPI). In simple words, you find out how much money you get from every active customer. This metric allows you to predict whether you can reach monthly revenue targets. And if not, then what exactly do you need to adjust?

Knowing the ARPU of different user groups will let you optimize your marketing efforts and focus on high-performing user acquisition campaigns.

To calculate your ARPU, you have to divide your Total Cohort Revenue by the number of users that installed the app throughout a particular period. To make it sound easier, here is the formula:

ARPU = (Total Revenue generated by users in period) / # number of users

Subscription App ARPU, Apphud

1.2 Average Revenue Per Paying Users (ARPPU)

ARPPU is pretty much the same as ARPU, except that only paying users are counted within the selected time period. This metric has huge importance. It calculates the revenue, detects channels that successfully target your audience, and can even target people similar to your existing customers. While calculating, you can quickly leave out non-paying users and focus only on those who increase your revenue.

If you want to calculate ARPPU, that's the formula you should follow:

ARPPU = (Total Revenue generated by users in period) / # number of paying users

The next metric is MRR. It's calculated as a sum of the monthly fee paid by each paying customer with a deduction of Apple commission. In other words, it reveals how much money your business makes from active users in a particular month.

Besides predicting a monthly income, MRR plays a crucial role in prioritizing resources and managing expenses. You can easily decide where to invest money, whether you should hire more people, and what salary you should pay your team.

MRR is recurring revenue normalized into a monthly amount. It's calculated as a sum of the monthly fee paid by each paying customer.

To calculate MRR, you should follow this formula:

MRR = Number of paying customers * Average Monthly Bill

Monthly Recurring Revenue (MRR), Apphud

Nothing can upset developers more than seeing a decline in subscription numbers. To be aware of the number of users leaving during the selected period, you should keep an eye on the churn rate.

Reducing the churn rate isn't an easy task because customers will always get disappointed. But what you can do is establish a friendly relationship with your existing customers and ask for their feedback more often. Don't forget that the personal approach will always pay off.

To calculate these metrics, you need to decide on a period first. Then divide the number of customers who expired during this period by the number of paid subscriptions at the start of the period. And multiply this value by 100%.

Here is the formula:

Subscriptions Churn = (Number of subscriptions expired during the period) / (Number of paid subscriptions at the start of the period) * 100%

Subscription Churn, Apphud

If you want to understand better how engaged your customers are, you should track retention. It will demonstrate the likelihood of retaining or attracting customers to your app.

To calculate subscriber retention, you should carry out a cohort analysis. It provides a deep understanding of how users renew subscriptions and how subscribers and revenue are retained. In other words, subscriber retention demonstrates the percentage of existing subscribers who keep using your product after a given period.

Users can take some time deciding whether they want to pay you something or not. Also, you may have trials that delay the conversion to the paid user. That's why subscriber retention is a metric you should watch closely. 

To calculate the subscriber retention rate, you should implement the following formula:

Subscriber retention rate = [(# Subscribers at the end of Period — # Subscribers Acquired During Period) / # Subscribers at Start of Period] x 100

Subscribers Retention, Apphud

Last but not least is the conversion rate. It demonstrates how significant the app's performance is in the app store and how users utilize your product.

There is no joint consensus about the standard conversion rate because it varies greatly depending on the app and industry. But if your index is around 2%, you can be sure that it's strong enough.

If you want to boost it, then you should define your app's conversion goals and create effective engagement strategies. Think about driving engagement and strengthening loyalty with your customers. And make sure that your app is simple and convenient to use.

To calculate your conversion rate, you should follow this formula:

Conversion Rate = # of users who performed an action / # of users who could have performed an action

Trial Conversion, Apphud

And as a bonus suggestion from us, keep an eye on your billing issues! It is important to know how well subscriptions renew in terms of payment issues. If you have billing problems that keep growing, the subscription price for a particular country may be too high. So, in that case, we would recommend you test a lower cost to decrease payment error rates.

To sum up, here are the main takeaways from our article:

• There is a great variety of different metrics, and it can be extremely challenging to focus on the right ones.
• There is no need to monitor all of them. All you have to do is keep track of those crucial for your product only.
• Mobile app metrics are the main indicators that can accurately evaluate the performance of your subscription-based app. They can tell you what needs to be improved to push your business forward.
• If you have a subscription app, we believe that the five key metrics we listed in the article should help you bring your subscription app to an entirely new level!

And with Apphud, you can track all five metrics with just one click! You'll have access to detailed information that is stored in one place. Forget about additional coding and receive updates in real-time. We work closely with popular marketing platforms like Facebook, Branch, and Adjust. Our relationship with customers is based on trust. So, you can be sure that Apphud will notify you about important events, let it be a customer trial start, autorenewal cancelation, or refund.

Curious to try it out? Then sign up and try it for FREE!

Nataly

Head of Marketing at Apphud

7+ years in product marketing. Nataly is responsible for marketing strategy development and execution. Committed adherent of the agile methodology.