April 10-12 | Chicago, IL
Measuring the Subscription EconomyDimensional Modeling/Analytics
Angel Abundez, Lead BI Consultant, DesignMind
April 10-12 | Chicago, IL
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Familiar Subscription modelsContent Subscriptions
3
Familiar Subscription modelsService and Product Subscriptions
4
Yesterday’s Subscription Economy
Linear Transaction
5
Business models have changed
6
Technology and Innovation• Cloud Computing• Digital Media• Mobile Devices• Social Media• Software as a Service (SaaS)• Internet Access and Broadband speeds• Startups, Apps, Innovative Entreprenuers
New Content Subscriptions
7
Software as a Service (Saas)Infrastructure/Platform Productivity Software
8
Today’s Subscription Economy
9
The Key Metrics
Recurring Revenue• Annual Recurring Revenue (ARR)
Churn• Percentage of members lost
New Business• Annual Contract Value (ACV)
10
The Key Metrics
11
ARRn
Churn
ACV
ARRn
+1What Recurring Revenue can we anticipate for the
year?
What percentage of
customers are leaving you?
How many new customers do
we need to sign up?
How many new customers do
we need to sign up?
12
Subscription Economy DifficultiesInsufficient Funds
System loop-holes
Rapidly ChangingMarketing Campaigns
Freemium
Invalid Credit Card numberOr Expired Card
Refunds
Credits
Charges
13
Assemble the Team
Operations
Sales and Marketing
14
Define your Data
Customers• New, Renewed, Cancelled, Expired
Subscription Terms• Free Trial, Paid, Overdue, In-Grace, Cancelled,Expired, Silver, Gold
Payment Transactions• Recurring, Credit Card, Free Trial, Coupons, Credits
Service or Product Usage• Minutes, Hours, Visits, Downloads, etc
15
Data Profile Subscriptions, Products1. Subscriptions2. Products3. Customers
APIs Available at:
April 10-12 | Chicago, IL
DemoSubscription Data Profile
The Key Metrics
17
ARRnChur
n ACV ARRn
+1
What percentage of customers
are leaving you?
18
Key Metrics - Churn
From your data definition meetings, you have the following customers:
• Active Customers• Overdue Customers• Cancelled Customers• Expired Customers
• What type of Facts are these?
1. Additive2. Semi-additive3. Factless4. Text
19
Key Metrics - Churn
For Churn percentage, you need total Active Membership. This requires moment-in-time views of how many members were active on a given date.
• What type of Fact table is needed?
1. Transactional2. Periodic Snapshot3. Accumulating Snapshot
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Key Metrics - Churn
Ask the right questions:What events lead up to an active customer?What events lead up to a cancelled customer?Do we want to trend active membership over time?
Dimensional Modeling lessons learned:Don’t even think about aggregating Slowly Changing Dimensions.Subscriptions could be modeled as a Slowly Changing Dimension, but will people use it in the data model?
21
Timeline Scenarios
April 10-12 | Chicago, IL
DemoMembership Facts for calculating Churn
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The Key Metrics
ARRnChur
n ACV ARRn
+1
What Recurring Revenue can we
anticipate for the year ?
24
Key Metrics – Recurring Revenue
Goal: Spread out a payment transactions into equal interval units
What T-SQL function can do this the best?1. CROSS JOIN2. UNPIVOT3. OUTER APPLY4. CROSS APPLY
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Key Metrics – Recurring Revenue
Ask the right questionsWhat if payment transactions occur before, during, or after the subscription period?Do we want to add discount amounts?How should refunds be treated?
Dimensional Modeling lessons learned:Use transaction date, not effective date.Draw up scenarios for how to handle +/- transactions, when they could
occur, and handle the grain carefully.Use the CROSS APPLY function as it scales for variable-length subscriptions.
April 10-12 | Chicago, IL
DemoRecurring Revenue Facts
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Strategies using Subscription Data
Reduce Attrition and ChurnIncrease CashThe Freemium ModelLong Term Agreements
Let’s Visualize our data to answer these needs
April 10-12 | Chicago, IL
DemoVisualizations
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Summing it all Up –
Subscription Economy is vital in todays economy. There are no publications out there that tell you how to dimensionally model this lucrative business model, so we thought we’d show you how we were to successfully implement this for our clients.
For further questions, feel free to contact us:• Angel Abundez: [email protected]; @angelstreamline or at
www.angelstreamline.com• Mark Ginnebaugh: [email protected]; @markginnebaugh or
at designmind.com/blog
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April 10-12, Chicago, IL
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