A subscription business can look healthy on its revenue chart while it quietly loses the customers that revenue depends on. The numbers that warn you early are different from the ones a one-time store watches. This guide covers 12 of them, grouped by the question each one answers, with a formula and a worked example for each.
The examples use made-up round numbers to show the math. They aren't benchmarks. The most useful comparison for any of these is your own history: this month against last month, and each new group of subscribers against the ones before.
Before you start: three definitions
- Active subscription: One that will bill again on schedule. Decide whether paused subscriptions count, and stick to it.
- Subscriber or subscription: One customer can hold several subscriptions. Every metric below can be counted either way; label which you use.
- Period: Most brands report monthly. If you ship every 8 weeks, look at a longer window too, or the numbers will swing.
Revenue: how much is coming in
1. Monthly recurring revenue (MRR)
What it is: the revenue your active subscriptions will bring in over a month. See MRR.
Formula: for each active subscription, the price per order × orders per month, summed. A subscription that ships every 2 weeks counts about 2.17 orders a month; every 8 weeks counts about 0.54. Prepaid plans count their total ÷ the months they cover.
Example: 1,000 monthly subscriptions at $40 plus 300 every-two-weeks subscriptions at $25 is $40,000 + (300 × $25 × 2.17) ≈ $56,275.
Watch: break the change into new, expansion (upgrades and add-ons), contraction (downgrades and discounts) and lost (cancellations). Also track what share of your total store revenue comes from subscriptions.
2. Average order value
What it is: the average size of a subscription order. See AOV.
Formula: subscription order revenue ÷ number of subscription orders, for the period.
Example: $120,000 from 3,000 renewal orders is a $40 average order.
Watch: first orders and renewals separately. Add-ons in the portal and bundles raise it; discounts in save offers lower it.
3. Subscription checkout rate
What it is: how many buyers of your subscription products choose the subscription instead of a one-time purchase.
Formula: orders that start a subscription ÷ all orders containing products that offer a subscription.
Example: 400 of 1,600 such orders started a subscription: a 25% checkout rate.
Watch: by product. The default choice on the product page, how clearly the savings are shown and offers at checkout all move it.
Retention: who is staying
4. Active cancellation rate (voluntary churn)
What it is: the share of subscriptions the subscriber chose to cancel. See voluntary churn.
Formula: subscriptions canceled by the subscriber during the period ÷ active subscriptions at the start.
Example: 2,000 active on March 1 and 90 canceled by choice in March: 4.5%.
Watch: by cancellation reason, product and order number. Our churn reduction guide covers what to do with it.
5. Passive cancellation rate (involuntary churn)
What it is: the share of subscriptions lost because a payment failed and wasn't recovered. See involuntary churn.
Formula: subscriptions ended by failed payments during the period ÷ active subscriptions at the start.
Example: 30 of 2,000: 1.5%.
Watch: it should fall as your recovery work improves. If it rises, check expiring cards and your retry schedule.
6. Renewal rate by order number
What it is: of the subscriptions that reached a given order, how many went on to the next one.
Formula: subscriptions that paid order n + 1 ÷ subscriptions that paid order n.
Example: 1,000 paid order 1 and 780 paid order 2, so order 1 → 2 renewal is 78%. Of those 780, 690 paid order 3: 88%.
Watch: the early orders. For most brands the steepest drop is between orders 1 and 3, which is where onboarding and first-renewal reminders pay off.
7. Skip rate
What it is: how often scheduled orders are skipped.
Formula: skipped orders ÷ scheduled orders in the period.
Example: 240 skips out of 3,000 scheduled orders: 8%.
Watch: skips are good when they replace a cancellation and a warning when they repeat. A subscriber who skips three times in a row usually needs a slower frequency. See skip delivery.
Saves and recovery: what you are getting back
8. Save rate
What it is: how often your cancellation flow keeps a subscriber who started to cancel.
Formula: subscribers who accepted a save offer ÷ subscribers who started a cancellation.
Example: 300 started to cancel and 75 took an offer: a 25% save rate.
Watch: by reason and offer, and check that saved subscribers are still active 30 and 60 days later. See our cancellation flow examples.
9. Recovery rate
What it is: how many failed renewal payments you eventually collect.
Formula: failed renewal payments later paid ÷ all failed renewal payments in the period.
Example: 130 of 200 failed payments recovered: 65%.
Watch: by decline type and by reminder. See why subscription payments fail.
Value: what a subscriber is worth
10. Customer lifetime value (LTV)
What it is: the gross profit you expect from a subscriber over their whole time with you. See LTV.
Simple formula: average order value × gross margin × average number of orders per subscriber. A common shortcut for the order count is 1 ÷ the per-order cancellation rate.
Example: $40 orders × 60% margin × 8 orders ≈ $192 of gross profit per subscriber.
Watch: the shortcut assumes the same cancellation rate at every order, which isn't true early on. Where you have the history, use actual revenue per subscriber from your cohort table (number 12).
11. LTV to CAC ratio
What it is: how lifetime value compares with what it costs to win a subscriber. See customer acquisition cost.
Formula: lifetime value (as gross profit) ÷ cost to win one subscriber (ad spend, discounts and other acquisition costs ÷ new subscribers).
Example: $192 ÷ $60 = 3.2.
Watch: the payback time too, meaning how many orders until a subscriber's gross profit covers what you spent to win them. A healthy ratio with a long payback can still strain your cash.
Groups over time
12. Cohort retention
What it is: for each group of subscribers who started in the same month, the share still active in each month after. See cohort analysis.
How to read it: each row is a starting month and each column is months since starting. Read across a row to see how one group fades. Read down a column to see whether newer groups hold on better than older ones at the same age.
| Started | Month 1 | Month 2 | Month 3 | Month 6 |
|---|---|---|---|---|
| January (500) | 100% | 74% | 63% | 48% |
| February (420) | 100% | 77% | 66% | – |
| March (610) | 100% | 70% | 58% | – |
Watch: split by product, first-order offer and where subscribers came from. This is where you see whether a sale brought in customers who stay.
All 12 at a glance
| Metric | Formula | Review |
|---|---|---|
| Monthly recurring revenue | Sum of each active subscription's monthly value | Monthly |
| Average order value | Order revenue ÷ orders | Monthly |
| Subscription checkout rate | Subscription orders ÷ eligible orders | Weekly |
| Active cancellation rate | Chosen cancels ÷ active at start | Weekly |
| Passive cancellation rate | Failed-payment losses ÷ active at start | Monthly |
| Renewal rate by order | Paid order n+1 ÷ paid order n | Monthly |
| Skip rate | Skips ÷ scheduled orders | Monthly |
| Save rate | Accepted offers ÷ started cancels | Weekly |
| Recovery rate | Recovered ÷ failed payments | Monthly |
| Lifetime value | Order value × margin × orders | Quarterly |
| LTV to CAC | Lifetime value ÷ cost to win a subscriber | Quarterly |
| Cohort retention | Share of each start month still active | Monthly |
Mistakes that make the numbers lie
- Mixing subscribers and subscriptions in the same report.
- Counting paused subscriptions as active in one report and canceled in another.
- Reporting one cancellation rate that hides the failed-payment share.
- Counting a save as a win without checking who canceled at the next renewal.
- Judging a Black Friday group on its first month instead of its third.
- Comparing your numbers with another category's published averages.
Track them in Chargezen
Subscription analytics in Chargezen puts revenue, cancellations, renewals, customer groups, products, orders, messages and credits in one view:
- Cancellations, both kinds: See cancellations by choice and by failed payment, with cancellation reasons by product and order number.
- Renewals and customer groups: Follow subscribers over time by product, offer, where they came from and delivery schedule.
- Saves and recovery: Save offers alongside skips and cancellations, and recovered revenue from failed payment recovery.
- Act on what you see: Turn a pattern into an automation, such as a different pre-renewal message for subscribers at high cancellation risk, with workflows.
Chargezen Subscriptions is $199 a month or $1,990 a year for Shopify Advanced and Shopify Plus stores, with no commission. See pricing. More terms: retention rate and net revenue retention.
Frequently asked questions
What are the most important subscription metrics?
If you track only three: active and passive cancellation rates (separately), renewal rate by order number, and lifetime value against the cost of winning a subscriber.
How do I calculate MRR for subscriptions that don't ship monthly?
Convert each one to a monthly value: price per order × orders per month. Every 2 weeks is about 2.17 orders a month, every 8 weeks about 0.54, and a prepaid plan is its total ÷ the months it covers.
What's the difference between churn rate and retention rate?
They are two views of the same thing. Retention is the share still active after a period; the cancellation (churn) rate is the share that left. Over one period, retention = 100% minus churn, ignoring new sign-ups.
How often should I review these?
Checkout rate, save rate and active cancellations weekly; most others monthly; lifetime value and LTV to CAC quarterly, when you have enough data to trust them.
