Guide to Subscriber Lifetime Value & ARMU Metrics

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To create long-term growth with your SMS channel, you need a measurement built to ensure SMS remains an ongoing source of revenue and sales for your brand. As part of our commitment to SMS, we’ve developed a proprietary channel-specific measurement focused on long-term customer value—what we are calling Subscriber Lifetime Value (Subscriber LTV). Subscriber LTV measures the total revenue potential of each individual, customers and non-customers, who subscribes to your SMS marketing. As your Subscriber LTV goes up, you should expect your revenue from SMS to go up as well!

About Subscriber Lifetime Value


Subscriber LTV is the average dollar amount each subscriber spends over the life of their subscription (assuming that the life of their subscription begins the moment they opt-in to your SMS list and ends the moment they unsubscribe from that list). This average is the foundation for determining the Total Value of your brand’s SMS program.

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Benchmark: We analyzed data across 8,000 shops to come up with the following benchmarks for low, medium, and high Subscriber LTV (denoted by “Room for Improvement,” “Intermediate,” and “Textpert,” respectively). If you’re in the low range, we encourage you to take action based on the recommendations provided here

 

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Total SMS Program Value


To calculate the Total Value of your SMS program, we'll take a look at both Subscriber LTV and your subscriber list size. When you optimize these metrics, you will naturally stay focused on delivering consistent value to your subscribers. As a result, this will organically drive your shop more revenue and increase the long-term value of SMS to your brand.

 

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Interested in taking a deeper dive into Subscriber LTV? Check out this blog post!

 

ARMU Metrics: The Driving Forces of Subscriber LTV


After analyzing almost 8,000 shops, our data science team identified what factors promote both a successful SMS strategy and a high Subscriber LTV.

These factors roll up into what we call the ARMU Metrics:

Acquisition Rate Revenue per Msg Msgs per Subscriber Unsubscribe Rate

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Acquisition Rate (A): The rate at which you gain new subscribers by using a variety of different acquisition methods is paramount to the total value of your SMS program. Check out ways to improve your Acquisition Rate and grow your subscriber list here.

  • Your acquisition rate is calculated by dividing the number of net new subscribers over the last 30 days by the total number of orders your shop has received within the last 30 days (e.g. New Subscribers L30 ÷ Total Orders L30). See Acquisition Rate benchmarks below: 

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Applying ARMU Metrics and SLTV


  • Take a look at your ARMU Metrics on your dashboard. Is anything in the red? If so, this metric is one of the first places you should start in order to improve your Subscriber LTV. Check out this blog post to see what levers you can pull to start improving your metrics.
  • To keep increasing the potential value of your SMS strategy and maximizing long-term revenue, you foundationally must keep growing your list and adding subscribers at a consistent rate. Luckily, Acquisition is one of the easiest metrics to influence. From Facebook Lead Ads to popups to landing pages, the options to grow your list and increase your Acquisition rate are vast. Find more ways you can influence your Acquisition rate here
  • Another easy metric to influence? Messages per subscriber. The idea here is to find the right sending cadence for your brand - not necessarily to blast out as many messages as possible nor is it being overly cautious with your send frequency, either. Take advantage of our hyper-segmentation options and our features like Safe Send to beat message fatigue. 

Where can I find my ARMU and Subscriber LTV metrics?


  • Check your Dashboard! At the top of your Dashboard, you can check existing ARMU metrics, benchmarks for performance, Subscriber LTV, and other contributing metrics like Total Subscribers.
  • Leverage your CSM for help. If you have a Customer Success Manager, you can work with them directly to get a view into your metrics and strategize with them on how to improve.

Get Support


Have questions? Please feel free to reach out to our wonderful Support team at support@postscript.io or via live chat. You can also submit a support request here!

Need ongoing channel strategy guidance? Please fill out this form and we'll connect you to one of our certified partners.

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