Defining Success in the Subscription Economy: Metrics that Matter
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Transcript of Defining Success in the Subscription Economy: Metrics that Matter
Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Defining Success in the Subscription Economy: Metrics that Matter
• Discover the Key SaaS KPIs, their underlying drivers and why they matter
• Define the actions your company should take to more effectively manage your subscription business
• Discover why depth well beyond backward looking GAAP based financials is necessary to assess the financial health of a subscription-based business
After attending this event you will be able to:
Learning Objectives
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Welcome to Proformative
Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Defining Success in the Subscription Economy: Metrics that MatterDave Key, Managing Director, Cloud StrategiesMark Gervase, Cloud Financials Strategist, Intacct
Introductions
MARK GERVASECloud Financials Strategist
Intacct
DAVE KEYManaging Director
Cloud Strategies
• Subscription businesses are different
• Managing by metrics– Revenue management– Churn– Revenue acquisition cost– Bottom line metrics
• Actions to take
• Summary and additional resources
Today’s Agenda
“You can’t manage what you don’t measure”
W. Edwards Deming
Why Metrics?
• Profits & revenues are deferred
• Faster growth = lower profits
• Future recurring revenues are forecast from current customers in addition to new customer sales
Subscription Business Differences
High growth/Short-term losses
0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Growth vs. Profit for Public SaaS Com-panies
Annual Revenue Growth
Net
Incom
e
Zendesk
Marketo
(Size of Bubble = Price/Revenue Ratio)
Workday
Success Must Be Measured Differently
• Assess the metrics
• Analyze trends
• Benchmark against peers
Optimize the business
Steps to Subscription Optimization
• Revenue
• Churn
• Cost of Subscription Services
• Revenue Acquisition Costs
• “Bottom Line” Metrics
Key Focus Areas
Thank you for your interest in this presentation. View the on-demand webinar or download the full
presentation at:www.Proformative.com
Defining Success in the Subscription Economy: Metrics that Matter