Average Daily Growth rate (ADG) is defined as the average increase in users or revenue that a subscription and billing management business experiences on a daily basis. ADG is a vital metric to track, as it helps to assess and improve their performance. ADG is important as it is the best predictor of future success for any subscription business. It’s a measure of the success in getting customers to stick around over time. A good and healthy ADG rate is 5-10% and anything above 10% is considered to be exceptional.
Finding the right pricing point, acquiring new customers and retaining old and new ones and finally lowering the churn rate are important factors that can drive and scale the ADG of any subscription management business.
Another method for boosting ADG is through efficient resource utilization. This means ensuring that the resources are used in a way that maximizes their impact on growth.
The current number of customers, the current monthly recurring revenue (MRR), the number of newly acquired customers from the previous month and the MRR from those new customers are few of the metrics that are needed to understand the ADG of a subscription and billing business. In short, ADG can be calculated by taking the total number of new customers divided by the number of days in the month, and then multiply that by the MRR from those new customers.