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Grow Your Membership Website Using 4 Simple Metrics

If a picture is worth a thousand words, then KPIs (Key Performance Indicators) are worth serious dollar amounts. To grow your business right, you need to keep improving.  KPIs help you identify the weak spots that could prevent your membership website from growing. With these simple metrics, we can help you take your website to the next level!

1. The Metric:  Monthly Recurring Revenue

How to Calculate it:

               # of customers X average billed amount = MRR

How it Helps: One of the most important metrics is the MRR, it shows you how good your membership business is, but also allows you to foresee the revenue for next month.  By knowing your revenue for next month, you can take calculated risks!

 2. The Metric: Member Churn Rate

How to Calculate it: 

paying members lost in the last 30 days ______________________   x 100 = MCR  paying members 30 days ago

How it Helps: The last thing you want is to lose more members than you’re gaining, member churn rate helps you find out if that’s the case! You always want your paying members to be higher than the members lost. Create a chart and track that rate. Is it increasing? Then you need to change something quick! This answers the question: Am I losing members faster than I’m making them?

3. The Metric:  Lifetime Value

How to Calculate it:

average monthly recurring revenue per member / Member churn rate  = Lifetime Value

How it Helps: How much is each customer worth? If you want to make a profit, you want to spend less than that number! For example, let’s say the average member spends $50 dollars a year, over a period of three years, that would make your LTV is $150. That means that you want to spend less than that to attract new members to make a profit.

4. The Metric: Average Monthly Recurring Revenue Per member

How to Calculate it:

avgs monthly recurring revenue per member / the # of paying members = Avg Mon. Recurring Rev. Per member

How it Helps: This metric is similar to the Monthly Recurring Revenue (MRR), but the difference here is that you are focusing on the worth of each member. You can use this metric to put a target on how many members you will need to reach your goal! For example, if your goal is $200K per year, and you want to charge each subscriber an average of $10 a month, you will need 2, 500 subscribers.

Remember to keep track of these metrics and create charts to see if the numbers are increasing or decreasing. Pay attention to certain patterns that could be forming and start brainstorming solutions. You can’t fix a problem if you don’t know what it is. KPIs will help you identify the problems!

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