Impact on Churn Rate and Customer Lifetime Value

A successful subscription business model depends not only on new customer acquisition but also on net retention and customer lifetime value growth. Research shows that 70% of subscription revenue on average comes from existing customers. Because of the criticality of retention, customer churn rate is a key metric.

Zuora’s Subscribed Institute analyzed Subscription Economy Benchmark data to develop guidance on how auto-renewing, evergreen, and standard termed subscriptions affect churn.

Report highlights include:

  • Explanation of the 2 dominant types of subscriptions: Termed and Evergreen
  • Churn rate analysis for evergreen and auto-renewing subscriptions compared to standard termed subscriptions
  • The impact of auto-renewing termed subscriptions on LTV


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