Subscriber growth is an important metric for a SaaS platform because it shows period-over-period momentum, or lack thereof, for an application. A positive Subscriber Growth Rate shows that the application is gaining traction in the marketplace. A flat or declining Subscriber Growth Rate can be an early warning sign of potential application stagnation or decline. Variability in the Subscriber Growth Rate, measured monthly, can also be an indication of seasonal trends.
Especially for a new business that is yet to generate revenue, Subscriber Growth Rate is a key metric to track because it can help predict future revenue generation based on current momentum.
In addition to tracking Subscriber Growth Rate, it is also useful to calculate the compound growth rate over a period of time. When done monthly, this is known as the Compound Monthly Growth Rate (CMGR).
