A guide to KPIs, part 1: Tracking subscriber lifetime value
For any ISP support team, it’s important to know your numbers. They can tell you how productive and effective your team is and how you’re tracking to overall goals. And what’s more, they make it simple to report successes and progress upstream.
But it’s not always easy to know where to start with key performance indicators (KPIs). To help, we’ve put together a three-part series to go over must-know KPIs for ISP teams—what they are, how to calculate them, and why they’re so important to know.
Let’s kick things off with lifetime value (LTV).
What is LTV?
Lifetime value, or LTV, tracks the amount of revenue an average subscriber will bring into your ISP. Typically, this number spans only the length of time a subscriber stays with your ISP; it ends if the subscriber churns.
What does LTV tell support teams?
While it’s nice to see exactly how much subscribers are worth, LTV plays a bigger role in an ISP team’s KPIs. By showing you how much each subscriber on average brings into the company, you can identify trends in key areas like churn and overall revenue.
Why does this matter? For most ISP subscribers, the service they receive determines their longevity—and WiFi is often the benchmark for that service. For example, recent research showed that 91% of consumers primarily use WiFi to access the services your ISP provides. In the U.S. alone last year, 76% of those consumers had to call the ISP for help with WiFi issues.
If they aren’t happy with the service they get, or they can’t resolve the issue, 49% will consider changing providers. That impacts your overall LTV, and the trends will be visible!
How do you track LTV?
You can find and track your LTV with a relatively simple calculation.
First, you’ll need to know your average monthly revenue per subscriber.
- Take your monthly revenue
- Divide it by the number of subscribers you have
- Take the monthly average you just calculated
- Multiply it by your average subscriber lifetime in months
This will give you the lifetime value of your subscribers.
From there, you can track this on a monthly, quarterly, or even annual basis to identify trends and changes.
Stay tuned for the next installment in our series, where we’ll go over a key metric for any ISP’s operational efficiency!