Subscription glossary
The following glossary includes terminology related to subscription management within the Cleverbridge platform
A
aaS
Acronym for as-a-Service. Model of providing cloud services.
Synonyms: as-a-Service
Active subscription
Any subscription with at least one paid-for subscription item. Active subscriptions can contain an unlimited amount of subscription items and those may vary in quantity. In analytics, this value is impacted by subscription items being added or removed by the subscriber during the customer lifecycle. Active subscriptions do not include trials.
For information, see subscriptions.
Active subscriber
Holder of at least one subscription with a minimum of one paid subscription item per subscription. If a subscriber contracts a subscription that includes multiple subscription items, they are still registered as a single subscriber. In general, each unique email is counted as a single subscriber and this value is impacted indirectly by subscription items being added or removed by the subscriber during the customer lifecycle.
If a one-item subscription is canceled and it is the only subscription the subscriber has, then one active subscriber is removed from the subscriber count.
For information, see subscriptions.
Active trials
Number of free subscription items at the end of a given period. Trials either expire after the trial period ends or are converted to active subscriptions.
Add-on
Optional subscription item that, when added, is billed in the recurring invoice for the subscription. An add-on can be a stand-alone product or a product used to augment the functionality of a perpetual product or another subscription item in the same subscription.
Synonyms: Cross-sell
Alignment
The act of consolidating the billing for two separate subscriptions with the same interval length into a single recurring billing event. This results in extending or shortening the running time of one subscription. An alignment also occurs when you upgrade a subscription immediately, see Alignment Purchase.
Synonyms: Co-term, merge
Alignment purchase
A purchase resulting from the change to a subscription during a running billing interval. This is often a subscription upgrade. Typically, the customer is billed a pro-rated amount for the time period between the change and the next billing date.
Synonyms: Pro-rated upgrade
Annual recurring revenue
Yearly representation of the monthly recurring revenue. With a stable customer base, the ARR provides a forecasting measure for future annual income.
Calculation: ARR is calculated by multiplying your MRR by twelve.
Synonyms: ARR
Automatic renewal
Type of renewal where, at the end of each billing interval, the subscription automatically renews, unless the customer explicitly cancels, upgrades, or downgrades the subscription. Auto-renewal is the default for subscription products in the Cleverbridge platform.
Customers opting for an offline payment option still receive automated reminders and payment requests as the renewal date for their automatic subscription approaches.
Automatic subscription
Type of subscription where recurring payments are processed automatically shortly before or on each renewal date of the subscription.
Automatic subscriptions streamline the fulfillment process to the product or service the customer subscribed to. Once the subscription is automatically renewed, the payment is triggered. For more details on subscription events based on the subscription management version you're on, see: Subscription Life Cycle Events.
Average order value
Average value of all items in the shopping cart for any given order.
Calculation: AOV is calculated as the net revenue divided by the number of orders.
Synonyms: AOV
Average revenue per user
Average monthly recurring revenue across your active subscribers in a given time. The ARPU is the chief indicator of the profitability of your products.
Calculation: ARPU is calculated by dividing the monthly recurring revenue by the number of active subscribers.
Synonyms: ARPU
B
Billing event
In the context of subscription products, customers are billed at regular intervals, and billing event refers to each billing instance.
Synonyms: Rebilling event, recurring billing event
Billing in arrears
The billing of a subscription on a recurring basis at the end (instead of the beginning) of a billing interval. The customer can use the subscription before being billed for it. Billing in arrears is typically used for billing usage or excess usage because such billing is based on actual (and therefore past) usage during a billing interval.
Synonyms: Usage-based billing
C
Cancellation list
A list of subscription products, set up in the Cleverbridge platform, that is used to automatically terminate a customer's existing subscription if the customer purchases a new subscription product that is a substitute. Cancellation lists are most used to provide customers with an option to upgrade or downgrade a subscription.
CC chargeback rate
Sum of Visa and Mastercard chargebacks processed in the current month divided by the sum of all paid transactions processed by Visa in the current month and all paid transactions processed by Mastercard during the previous month.
The credit card chargeback rate is applicable to purchases paid with Visa and Mastercard. Chargeback rates with Visa and Mastercard are calculated differently:
- Chargeback rates with VISA are calculated by dividing the chargebacks processed in the current month by the number of paid transactions processed during the same month.
- Chargeback rates with Mastercard are calculated by dividing the chargebacks processed in the current month by the number of paid transactions processed during the previous month.
Churn
The loss of existing subscription items and their associated recurring revenue during a given period. Churn can be voluntary, where the customer purposefully cancels the subscription item, involuntary, where the payment is declined, or fixed-term, were the expiration of the subscription item is prearranged.
Calculation: Churn is calculated by counting the number of unrenewed subscription items during a given period. Trials are excluded from the count.
Synonyms: Customer attrition, customer turnover, gross attrition, gross churn
Churn MRR
Monthly recurring revenue lost from churned subscription items. This includes various types of churn, such as voluntary, involuntary, fixed-term, and client-handed churn.
Churn rate
Rate at which subscription items don’t renew compared to the total active subscription items eligible for renewal in a given period. Trial subscriptions are not included.
Calculation: Churn rate is calculated by dividing the subscription items lost during a given period by the number of the subscription items you had at the beginning of said period. Lost is understood as unrenewed by payment due date.
Synonyms: Attrition rate, gross churn rate
Churned subscriptions
All of the unrenewed subscription items during a given period. It is a scheduled renewal that did not occur shortly before or by the payment due date, which results in the loss of an existing subscription item.
Contraction MRR
Decrease in monthly recurring revenue from existing customers who downgrade their subscription plans. It encompasses changes such as switching to lower-priced plans, decreasing product quantity, and decreasing prices. Essentially, it is the counterpart to Expansion MRR.
Conversion rate
Number of initial orders divided by the total number of sessions at the checkout. The conversion rate may be more than 100% if the majority of orders were completed without passing through the checkout process.
Customer lifetime value
Gross or net profit attributed to the entire future relationship with a customer.
Synonyms: CLV
D
Downgrade
Replacement of the customer’s current subscription product with a lower-priced subscription product that is viewed as a substitute. Letting customers opt for a downgrade midterm is not allowed as it results in a negative charge.
E
Excess usage
The quantity of usage that is above the quantity included in a subscription’s recurring billing amount.
A $25 per month subscription allows the customer to store 10 gigabytes of data. During a billing interval, the customer stores 12 gigabytes. This equals 2 gigabytes of excess usage.
Synonyms: Overage
Expansion MRR
Additional revenue generated from existing customers, measuring the increase in monthly recurring revenue due to expansion activities within the existing customer base, such as cross selling, upselling, and price increases.
F
Fixed-price subscription
Recurring product within the subscription set up with an unchanging price, applicable to automatically renewable subscription. Any change in usage or item quantity will affect the subscription price.
Fixed-term churn
Occurs when the expiration date for the subscription item is prearranged after a specified contract period. This means that the subscription item has a rigid expiration date, or there may be unique circumstances leading to its termination, such as compliance regulations or the discontinuation of the product. The reasons for fixed-term churn are the following: External Reason, Limited Renewals, and Bounced Mail.
Free trial
A free trial allows a user to use a subscription product at zero cost for the first interval. At the end of the first interval, the subscription is either deactivated until the customer renews at a billed amount, or, if the subscription is set up as auto-renewal or is renewed, access to the program is denied until payment is submitted. You can set free trials where the payment details are collected automatically for auto-renewals. For more information, contact Client Experience.
Synonyms: Freemium is not a synonym.
Freemium
A marketing tactic in which a user can access a basic product for an unlimited amount of time. However, if users want to access premium features, such as LinkedIn’s InMail or Skype’s group video chats, they must upgrade to a paid subscription providing premium access.
Synonyms: Free trial is not a synonym.
Freemium subscribers
Holders of a subscription with free basic products, which allows you to acquire a large user base. This ultimately drives conversion when freemium subscribers upgrade from a free plan to a paid plan, in turn increasing the number of paid subscribers.
Full-term upgrade
Upgrade where the current subscription interval is interrupted and a new one is started with a new and improved subscription item attached to it.
G
Grace period
The grace period occurs when Cleverbridge does not receive payment for a subscription but the customer may still use the product. It allows you to set a certain number of days for the customer to update their payment information (in the case of online payment options) or make a payment (in the case of offline payment options) before the subscription goes into the status Hold.
I
IaaS
Acronym for Infrastructure as a Service. Network and storage resources remotely accessible to customers on a pay-as-you-go basis.
Synonyms: Infrastructure as a Service
Initial purchase
First billing of a subscription product.
For a free trial subscription set up in the Cleverbridge platform, the billing amount is zero.
Synonyms: Initial billing, initial charge
Initial subscription interval
The time period between the initial payment and the first subscription billing event.
Involuntary churn
Occurs when the payment for the subscription item is not received by the renewal date for an unavoidable reason often related to outdated payment information, failed account connection, insufficient funds, or unsuccessful Offline Payment.
L
LTV
Expected total revenue an average customer will generate for your business over their entire lifetime as a paying customer.
Calculation: LTV is calculated by dividing the average revenue per user (ARPU) by the user churn rate.
Synonyms: CLV
M
Manual renewal
Type of renewal offered to customers who opt out of an automatically renewable subscription and that requires the customer's consent for the subscription renewal. It also offers flexibility to customers to update their subscription if needed: add more data, change in item quantity, etc. This renewal type is reversible, which means customers can still switch to an automatically renewable subscription.
For more information, seeSubscription Management 1.0 and 2.0.
Manual subscription
Type of subscription where the customer makes a renewal payment manually at the end of each billing interval in order to continue using the product or service they subscribed to. Manual subscriptions require the customer’s consent for each interval renewal and allow them to add items and data to the subscription or modify personal data and payment data of customer.
For more details on subscription events based on the subscription management version you're on, see Subscription life cycle events.
Metering
A process in which the number of times, the duration, the amount, or another metric of use for a customer’s subscription is monitored and recorded. The purpose of metering is to provide the data needed for usage-based billing.
Synonyms: Usage-based billing
Monthly recurring revenue
Recurring revenue normalized into a monthly amount. Previous and current MRR provide a forecasting measure for future income and overall growth rate.
Calculation: MRR is calculated by dividing the sum of the recurring revenue during x month by the subscription interval length.
Synonyms: MRR
My account
Username and password protected area you offer your customers, enabling them to access privileged information about the purchased products and to manage their subscriptions and special marketing campaigns.
N
Net revenue
Amount of revenue generated by subscribers based on the exchange rate at the time of the transaction. All discounts and shipping costs are subtracted from the net revenue, while Cleverbridge fees and affiliate commissions are included in the net revenue.
Net revenue retention
Net revenue retention is a cumulative revenue growth or decline from existing customers, reflecting changes in MRR due to expansion, contraction, and churn over a given period. NRR is a key indicator of the health of your subscription-based business.
Synonyms: NRR
New business MRR
- MRR generated by new subscription items in a period
New subscriptions
Active and paid subscription items with the first payment having occurred in the selected period. In analytics, this value corresponds to the count of the initial billing interval for paid-for subscription items which is equivalent to 0.
O
Orders
Number of paid orders in a given period. Free registrations and quotes are not included in this count. Fully refunded items reduce this count.
P
Pay-per-use
A type of usage-based billing in which all units of usage are billed.
Prorated billing
Applicable when subscribers upgrade their plan mid-subscription interval, which requires an adjustment of the recurring billing of the subscriber to prevent undercharging or overcharging the customers.
Prorated billing is used to calculate the subscription amount for the remaining period of the interval, based on the number of days the subscriber used the current plan, subtract it from the full amount of the new plan they upgraded to, to determine the new billing amount for the upgraded subscription interval.
Prorated upgrade
Upgrade where the subscription item is replaced by a newly released and improved version while the current subscription interval stays the same.
Synonyms: Alignment purchase
R
Reactivation
The restoration, after deactivation, of a customer’s access or ability to use a subscription product. Reactivation must be done explicitly by the client.
Recurring billing
A defining characteristic of a SaaS or subscription service in which the service is billed on a regular and repeating basis, most commonly monthly, quarterly, or annually.
Recurring subscription interval
The time period between subsequent billing events starting from the first subscription billing event.
Refund rate
Percentage of all transactions that were fully or partially refunded during a given period.
Renewal
The process of billing renewal for an additional interval, which allows customers to access a product or a service. The renewal of a customer’s subscription can be automatic or manual, depending on the subscription management version you are on. If a subscription is set up to automatically renew, the renewal (and billing the customer) is done seamlessly. If set up to manually renew, the customer must initiate the renewal. For more information, see About Subscription Billing Intervals.
Renewal date
Time of subscription renewal when the interval length of the subscription is fulfilled and the Cleverbridge platform bills the customer for the subscription upcoming interval.
Synonyms: Billing event date, subscription billing date, next billing date
Renewal rate
Rate at which subscription items renew out of the total subscription items eligible for renewal in a given period. Grace period is considered, and trial subscriptions are not included.
Synonyms: Retention rate
Renewals MRR
MRR generated by renewed subscription items in a period. Renewal type Subscription renewals are configurable to renew either automatically or manually. A subscription renewing automatically is the default for subscription products in the Cleverbridge platform. With manual renewals, the customer must confirm the renewal of the subscription on every renewal date at the latest. For more information on renewal types, seeSubscription Management 1.0 and 2.0.
Renewed subscriptions
Paid subscription items for the purpose of extending the access to a product or a service beyond the initial purchase. In analytics, this value corresponds to the count of the recurring billing interval for paid-for subscription items: (1,2,3…etc.)
S
SaaS
Acronym for Software as a Service. Software that is owned, delivered, and managed remotely. It is usually sold and billed on a subscription basis.
Synonyms: Cloud-based software
Self-service
A solution that enables subscribers to make modifications to their personal, payment, and plan information.
Synonyms: Customer self-service
Sign-up
The process when a customer decides to subscribe to a product/service. Sign-ups are equivalent to interval 0 and correspond to either a trial period or the first paid event for a one-item subscription as well as a newly added subscription item to a subscription.
Calculation: Count of newly added subscription items requiring a subsequent renewal. Trials are excluded from the count.
Starting MRR
MRR calculated at the first day of the month.
Subscription
An agreement subject to renewal, where access to a recurring product or service is granted to the customer at regularly and successfully executed billing intervals, such as monthly or yearly. A subscription renews automatically until it is canceled by the customer or manually where the customer initiates the renewal before the end of the billing interval. There are single item subscriptions and multi-item subscriptions. A multi-item subscription can only contain more than one item if all items have an identical interval length.
Subscription analytics
Dashboards and detailed metrics for monitoring and improving the health of a subscription business. Reports can be segmented across a variety of dimensions such as by plan, product/service, demographics, region, and customer behavior.
Subscription business model
A business model in which a company chooses to build and maintain customer relationships by making their product/service available for ongoing payment or fees.
Subscription downgrade
A subscription downgrade alters the subscription by switching it to a less expensive paid plan or reducing the quantity of a product.
Subscription event
Any changes that influences a subscription, such as a customer address change, upgrade, renewal, etc.
Subscription interval
The time period between billing events that showcases the frequency with which a subscriber is charged to continue a subscription (e.g. one-time, monthly, quarterly, annually, etc.). Intervals are determined by the pricing model.
Synonyms: Billing interval
Subscription interval length
Length of the billing interval for a recurring product, set in days, months, or years. subscriptions may only contain recurring products with the same interval length.
Subscription interval number
Count of the billing interval for a recurring product: initial (0) or recurring (1,2,3…etc). In reporting terms, it reflects how often a subscription gets renewed. For more information, see Subscription Interval vs Subscription Item Interval.
Subscription item
A component of a subscription with its own set of attributes, including price, description, quantity, and feature set. A subscription item can be a recurring product or service that you offer your customers.
If the subscriber purchases two of your subscription products in a single transaction and both those products have an identical interval length, this transaction translates into one subscription, and a single invoice is issued to the customer. All items are grouped under a unique subscription ID, however they can have different item statuses.
Synonyms: Item
Subscription items churn cohort
Churn rate of subscription items over various subscription intervals in a given period. Cohort groups a set of subscription items by the time of their sign-up, the unifying factor being the month of the sign-up. Grace period is considered, and trial subscription items are not included in the calculation.
Subscription item interval number
Count of the billing interval for a subscription item: initial (0) or recurring (1,2,3…etc). In reporting terms, and particularly relevant for subscriptions with multiple subscription items, it reflects how often each subscription item gets renewed.
Subscription item status
Identifies the current state of a subscription item. Possible values are: Active, Deactivated, Finished, Removed, Awaiting Reinstate. For more information, see Subscription Statuses.
Synonyms: Item status
Subscription lifecycle
The process of attracting, acquiring, growing, and retaining a subscriber.
Subscription link
Link to allow a customer to manage their subscription.
Subscription management 1.0
Two separate products must be created, one for manual-renewal subscriptions and the other for automatic-renewal subscriptions.
Subscription management 2.0
Offer automatic and manual renewal for the same product, which reduces product setup and maintenance efforts, as well as the risk of configuration errors. One product is created for both automatic- and manual-renewal subscriptions. Customers can cancel or reinstate individual subscription items. Option to turn on/off automatic renewal for the entire subscription.
Subscription next billing date
The date a charge is sent to a customer based on the terms of a subscription.
Subscription notification
A webhook, machine-to-machine communication, triggered by events such as upgrades, renewals, address changes, etc.
Subscription option
Ends a subscription after a certain number of billing events.
Subscription pricing model
Defines how subscription pricing is set. Pricing can be: fixed, tiered, seat-based, usage-based, or some combination thereof. For more information, see Implement a Pricing Model.
Subscription-related URLs
Prolonging the life of a subscription. The process of continuing access to a product/service for additional billing intervals. The renewal can be automatic or manual, depending on the subscription management version you are on. For more information, see About Subscription Billing Intervals.
Subscription status
Identifies the current state of a subscription. Possible values are: Active, Deactivated, Finished, Grace, Handled by Client, Hold, New. For more information, see Subscription Statuses.
Subscription update
A subscription update includes any modifications to the subscription, such as upgrades or downgrades, changes to customer personal information, updates to payment details, price increases to existing products, or the discontinuation of a product followed by its replacement with an equivalent alternative.
Subscription upgrade
A subscription upgrade alters the subscription by switching it to a more expensive paid plan or increasing the quantity of a product.
T
Trials-to-paid-rate
Percentage of trials converted by customers to paid subscriptions during a reported period.
U
Usage-based billing
Method of pricing and billing SaaS or subscription services in which the accumulated usage during a billing interval (as measured by metering) is billed at the end of the billing interval (in arrears). For some subscription products, the customer is allowed some maximum amount of usage and is billed only for the excess usage above this maximum; in other words, for the excess usage.
Synonyms: Metered billing
Unvoluntary churn
Occurs when the payment for the subscription item is not received by the renewal date for an unavoidable reason often related to outdated payment information, failed account connection, insufficient funds, or unsuccessful Offline Payment.
V
Variable-price subscription
Recurring product within the subscription set up with unique prices for different time intervals. Variable-pricing is a variant of the fixed subscription pricing model where instead of applying unchanging prices for all subscription intervals, you set up different prices for each interval.
Voluntary churn
Occurs when a subscriber purposefully decides to discontinue the use of a subscription item. The reasons for voluntary churn are the following: Customer Cancellation, Manual Subscription, Refund, and Chargeback.
X
XaaS
Acronym for Anything-as-a-Service. A variety of services hosted on the cloud that customers can access remotely.
Synonyms: Anything-as-a-Service
X-parameter
Groups the revenue and subscriptions in hierarchical classes. You can have up to 10 hierarchical x-parameters under each x-parameter class.
X-parameter class
The X-parameter class filter allows you to display and apply the x-parameters under the x-parameter class to the metrics within the subscriptions dashboard. You can have a maximum of 5 x-parameter classes under which the various x-parameters are grouped.