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Subscription cohorts churn

Overview

This report provides insight into subscription cohorts churn and enables you to compare the attrition rate of multiple cohorts.

The Avangate system creates cohorts by grouping together active, past due and trial subscriptions sharing billing cycle settings and the same start month.

Note: This report does not centralize data on products sold to partners.

Availability

Contact Avangate directly to have this report enabled.

Requirements

Data for this report has been logged starting with May 2013. As such, you will only be able to build the report when the time passed since cohort data has first started been logged is smaller than the minimum billing cycle interval for your subscriptions.

For example:

  • If you're selling monthly subscriptions, you'll be able to access cohort reports starting in June 2013.
  • If you're selling annual subscriptions, you'll be able to access cohort reports in May 2014.

Accessing the Subscription Cohorts Churn report

Navigate to Main reports under Reports center. Scroll down to the bottom of the page and click on Subscription Cohorts Churn in the SaaS reports area.

Workflow

To build Subscription Cohorts Churn report you first need to select a number of filters:

Billing cycle:

The time interval elapsed between successive billing periods when subscriptions are renewed or expire.

The billing cycle options available in this drop down menu correspond to the billing cycles setting you configured for those of your products that were actually sold to customers through Avangate.

For example, if you're only selling monthly subscriptions, 1 month will be the only option available. In addition, if you created a 3 year subscription product, but did not sale a single unit, the 3 year option will be missing from this drop down menu.

Cohorts from:

The start month of subscriptions included in the same cohort.

Select All to compare the evolution of all subscription cohorts from a specific year.

Cohort tracking range

The last month of the tracking interval for a cohort of subscriptions sharing the same start month.

Tracking period:

Is the time interval elapsed between the start month of the subscription cohort you're analyzing and the end month of the last complete billing cycle within the tracking range date you selected.

Note: Please select a billing cycle that is equal or smaller than the tracking range interval.

For example, let's assume that you're tracking yearly subscriptions that started in January 2010, and set May 2013 as the last month of the Cohort tracking range. In this case, the tracking period will look like this:

Tracking period

Jan 2010

Jan 2011

Jan 2012

Jan 2013

 

January 2013 is the last complete billing cycle for subscriptions in the January 2010 cohort. This report will add January 2014 only at the start of February 2014, when the current billing cycle is finalized.

Products

Lists with all active and disabled products from your account that were sold to customers via Avangate, and filters only subscription cohorts for specific offerings. Products lacking sales will not be available.

If you re-label products, this drop down menu will display the current product name, and not old versions. For example, let's assume that you modified the name of Product 1 version 1.0 into Product 1 version 2.0. The drop down menu will only feature Product 1 version 2.0 even if all existing sales involved Product 1 version 1.0.

Note: This report does not centralize data on products sold to partners.

Product pricing options

Available only when a single product with sales through the Avangate system is selected using the Products filter. This filter lists only those pricing options selected by customers when they made purchases through the Avangate system.

Note: This report does not centralize pricing options data for products sold to partners.

For example, let's assume that you have configured the following offerings:

Product 1

Pricing options:

 

1 user

1 month

2 users

You have not sold any units of Product 1. As such Product 1 will not be available under the Products filter.

Let's assume that this is a new offering, and you sell your first copies in April 2013 with the following pricing options selected: 1 user / 1 month.

Starting in May 2013, after the first billing cycle for this monthly subscription has passed, Product 1 will start to be available under the Products filter.

Furthermore, when selecting Product 1 alone, you will also be able to select 1 user / 1 month under the Product pricing options filter.

The remaining pricing options, including 1 user2 users1 month as standalone options but also combinations such as 2 users / 1 month will not be displayed since the Avangate system registered no sales for them.

Cohort churn

The attrition rate of subscriptions in a cohort, representing the number of subscriptions expired/canceled from the same cohort.

Report options

Start size

The total number of active and past due subscriptions at the start of the tracking interval.

If Subscription 1 is active on April 2nd, 2013, but is canceled on April 3rd, 2013, it will be counted for the start size of the April 2013 subscriptions cohort, but not for the end size.

End size

The total number of active and past due subscriptions at the end of the tracking interval, after items which expired or were canceled are subtracted, and equal to the subsequent start size.

If Subscription 2 is active on April 2nd, 2013, but is canceled on May 3rd, 2013, it will be counted for both the start size and the end size of the April 2013 subscriptions cohort.

Cumulated churn

The number of subscriptions expired/canceled at the end of specific billing cycles within the tracking interval. The result of the end size value subtracted from the start size value.

Churn rate

Percentage of subscriptions expired or canceled calculated from the start size of the cohort for specific billing cycles within the tracking interval.

Cohort age

The age of the subscription cohorts in according to the billing cycle selected.

Compare cohorts

When building the report, select the start year of the subscription cohort you're analyzing under the Cohorts from: option, and the option All instead of a specific month. In this manner the report will compare the evolution of all subscription cohorts from a specific year.

In this scenario, Billing cycles reveal the churn rate evolution of subscriptions in a cohort across successive billing cycles, calculated from the start size. Churn rate reported is cumulative from one billing cycle to the next. 100% churn rate signifies that all subscriptions in a cohort have been churned.

Let's look at the report below:

Cohort

Start size

Billing cycle 1

2

3

4

5

Jan 2012

11

9.09%

27.27%

45.45%

55.45%

85.45%

Billing cycle 1. The January 2010 cohort started off with 11 subscriptions, 9.09% of which churned (were canceled or expired).

Bc2. 27.27% of subscriptions were not renewed in the second billing cycle, representing the sum of 9.09% in Bc1 and 18.18% in Bc2.

Bc3. The cumulated churn rate for the first three billing cycles reached 55.45% in Bc3, adding 10% to the previous 45.45%.

Bc4. In the fourth billing cycle 85.45% of subscriptions in the January 2012 cohort expired or were canceled.

Subscription cohorts tracking exceptions

Some changes to subscriptions will not be reflected by this report:

  1. Modifications in billing cycle and pricing options
    • The report will not account for modifications to the billing cycle or to the pricing options of subscriptions in their lifetime. The billing cycle settings and the product pricing options initially valid for a subscription will continue to be considered as associated to the item, even if they change.
  2. Upgrades and renewals with new product versions
    • The report will not account for upgrades to new offerings or for renewals with new product versions of subscriptions in their lifetime (billing cycle and pricing options updates are also not accounted for).
    • Subscriptions will continue to be associated to the products initially sold to customers, even after upgrades or renewals with new product versions.
  3. Initial subscription is canceled during upgrade and replaced with a new subscription
    • The initial subscription will be considered as canceled (churned) and no longer reported, along with any payments or revenue.

FAQ

  1. Why can't I see any data in my report?
    • In scenarios in which the smallest billing cycle set for your products is larger than the cohort tracking interval selected the report will not display any data.
  2. Why is the tracking period in the report smaller than the interval I selected?
    • The report details subscription cohorts throughout their lifetime within the tracking intervals you select. However, the report will no longer provide data in scenarios in which all subscriptions in a cohort are churned (they expire or are canceled) before the end date of your tracking interval.
    • For example, let's assume you're tracking the cohort of 100 subscriptions started in January 2012 until January 2013 for product with a monthly billing cycle, and out the initial 100 subscribers you lose 10 each month. Because of the attrition rate, all initial customers have churned out by November 2012. This means that the report will not display any data for December, since no subscription from the cohort is still active.
  3. I cannot select the current month as the end of the tracking interval. Why is that?
    • The past complete month is the last that can be selected as the end of tracking interval.
  4. Can lifetime/non-recurring subscriptions be included in this report?
    • In special scenarios yes, but this should not happen unless an exception is involved, including:
      • the lifetime of a subscription is prolonged indefinitely by you;
      • the customer upgrades to a non-recurring/lifetime subscription.
    • In such scenarios, lifetime subscriptions are included under the start size and end size of the cohort, and they will never churn.
  5. Are imported subscriptions included in this report?
    • Yes. Imported subscriptions will be included in cohorts based on the PurchaseDate you provide and not the import date. For example, let's assume you imported Subscription 1 in April 2013, with 2012-12-01 (December 1, 2012) as the PurchaseDate.
    • As such, Subscription 1 is included in the December 2012 cohort, and will be reported for the start and end size until May 2013 and onward, without payment or revenue data.
  6. When happens if I extend the billing cycle of a subscription?
    • The subscription will be considered valid and included into the report as long as it's active or past due.