Measuring the Subscription

Economy
Dimensional Modeling/Analytics

Angel Abundez, Lead BI Consultant, DesignMind

April 10-12 | Chicago, IL

Please silence
cell phones

April 10-12 | Chicago, IL

Familiar Subscription models
Content Subscriptions

3
Familiar Subscription models
Service and Product Subscriptions

4
Yesterday’s Subscription Economy

Linear Transaction

5
 Business models have changed
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

6
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

ARRn Churn ACV ARRn+1

What Recurring What percentage How many new How many new
Revenue can we of customers customers do we customers do we
anticipate for the year? are leaving you? need to sign up? need to sign up?

11
Subscription Economy Difficulties
Insufficient Funds

Invalid Credit Card number

Or Expired Card Rapidly Changing
Marketing Campaigns
System loop-holes
Freemium
Refunds

Credits
Charges

12
Assemble the Team

Sales and Business

Operations Finance IT
Marketing Analysts *

13
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

14
Data Profile Subscriptions, Products

1. Subscriptions
2. Products
3. Customers

APIs Available at:

15
Demo
Subscription Data Profile

April 10-12 | Chicago, IL

 The Key Metrics

ARRn Churn ACV ARRn+

1

What percentage of 17

customers
are leaving you?
 Key Metrics - Churn

From your data definition • What type of Facts are these?

meetings, you have the following 1. Additive
customers: 2. Semi-additive
3. Factless
• Active Customers 4. Text
• Overdue Customers
• Cancelled Customers
• Expired Customers

18
 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. Transactional
2. Periodic Snapshot
3. Accumulating Snapshot
19
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?
20
Timeline Scenarios

21
Demo
Membership Facts for calculating Churn

April 10-12 | Chicago, IL

 The Key Metrics

ARRn Churn ACV ARRn+

1

What Recurring
Revenue can we
anticipate for the year ?

23
 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 JOIN
2. UNPIVOT
3. OUTER APPLY
4. CROSS APPLY

24
 Key Metrics – Recurring Revenue

Ask the right questions

What 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.

25
Demo
Recurring Revenue Facts

April 10-12 | Chicago, IL

Strategies using Subscription Data

Reduce Attrition and Churn

Increase Cash
The Freemium Model
Long Term Agreements

Let’s Visualize our data to answer these needs

27
Demo
Visualizations

April 10-12 | Chicago, IL

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: angel@designmind.com; @angelstreamline or at
www.angelstreamline.com
• Mark Ginnebaugh: mark@designmind.com; @markginnebaugh or at
designmind.com/blog

29
Win a Microsoft Surface Pro!
Complete an online SESSION EVALUATION
to be entered into the draw.

Draw closes April 12, 11:59pm CT

Winners will be announced on the PASS BA
Conference website and on Twitter.

Go to passbaconference.com/evals or follow the QR code link displayed on

session signage throughout the conference venue.

Your feedback is important and valuable. All feedback will be used to improve
and select sessions for future events.
 Platinum Sponsor
Thank you!
Diamond Sponsor

April 10-12, Chicago, IL