--- title: "Subscription Glossary — Subscribe & Conquer" url: https://www.subscribeandconquer.com/glossary description: "The complete subscription business glossary — MRR, ARR, NRR, GRR, CAC, LTV, churn, dunning, and 20+ more terms defined in plain English by Ross Williams." lang: en --- Reference · Updated May 2026 # The Subscription Business Glossary Every metric, lever, and piece of jargon in the Subscribe & Conquer book — defined in one sentence, then explained in two more. Bookmark it, link your team to it, or copy a definition straight into your board deck. 22 terms · written by Ross Williams (https://www.subscribeandconquer.com/about), who bootstrapped a subscription business to $50M in recurring revenue. ## A ARPU (Average Revenue Per User) **ARPU is the average revenue a subscription business earns per active subscriber in a given period.** Calculated as total revenue ÷ active subscribers. Tracked monthly or annually, ARPU rises through pricing increases, plan upgrades, or add-on attach — and falls when discounts or downgrades dominate. Read more → Subscription metrics: https://www.subscribeandconquer.com/guide/subscription-metrics ARR (Annual Recurring Revenue) **ARR is the value of recurring subscription revenue normalised to a one-year run rate.** Calculated as MRR × 12 (or sum of annual contract values for SaaS). ARR is the headline number investors and acquirers anchor on; growth efficiency is judged as new ARR added per dollar of sales-and-marketing spend. ## C CAC (Customer Acquisition Cost) **CAC is the fully-loaded cost to acquire one paying customer, including paid media, sales salaries, and tooling.** Healthy SaaS businesses target an LTV:CAC ratio of 3:1 or higher and a CAC payback period under 12 months. Consumer subscription businesses often target sub-3-month payback because churn is faster. CAC Payback Period **The number of months of gross profit it takes to recover the cost of acquiring a customer.** Calculated as CAC ÷ (ARPU × gross margin). Shorter payback means faster compounding and less working capital tied up — bootstrapped subscription businesses live or die by this metric. Card Updater (Account Updater) **A card-network service (Visa VAU, Mastercard ABU, Amex CardRefresher) that automatically updates expired or reissued card details on file.** Enabling account updaters is the single highest-leverage involuntary-churn fix — typically recovering 30-50% of payments that would otherwise fail at renewal. Most modern processors expose it as a one-click toggle. Read more → Failed payments & involuntary churn: https://www.subscribeandconquer.com/guide/failed-payments-involuntary-churn Churn **Churn is the rate at which subscribers cancel, fail to renew, or stop paying within a given period.** Reported monthly or annually. Subdivided into voluntary churn (active cancellation) and involuntary churn (failed payment), and into logo churn (customer count) and revenue churn (dollar value). Read more → Subscription churn: https://www.subscribeandconquer.com/guide/subscription-churn Cohort Analysis **Grouping subscribers by their signup month (or campaign) and tracking their retention and revenue over time.** Cohort curves expose whether retention is genuinely improving or whether headline churn is being masked by a flood of new signups. Read the slope of month-3 to month-12 retention to judge product-market fit. Contraction MRR **The MRR lost from existing subscribers downgrading plans, removing seats, or dropping add-ons (without fully cancelling).** Contraction sits between expansion and churn in the MRR movement equation. High contraction signals the wrong customers are on the wrong tiers — usually a packaging problem, not a product one. Read more → Subscription pricing: https://www.subscribeandconquer.com/guide/subscription-pricing ## D Dunning **The structured retry-and-communication process for recovering failed subscription payments before the subscriber is cancelled.** A typical dunning sequence retries the card on intelligent timing (3, 5, 7, 14 days) and emails the customer in parallel. Best-in-class dunning recovers 60-70% of failed payments; default Stripe Smart Retries alone recovers ~40%. ## E Expansion Revenue **Additional MRR generated from existing subscribers via upgrades, seat additions, usage overages, or cross-sell.** When expansion exceeds churn + contraction, NRR is above 100% and the business compounds without acquiring a single new customer. The fastest-growing SaaS companies report NRR of 120-130%. Read more → Expansion revenue: https://www.subscribeandconquer.com/guide/subscription-expansion-revenue ## F Freemium **A pricing model that offers a perpetually free product tier, monetised by upgrading a minority of users to paid plans.** Freemium works when marginal serving cost is near zero, the free product is genuinely useful, and natural upgrade triggers (limits, collaboration, advanced features) are baked in. Typical free-to-paid conversion is 2-5%. Read more → Subscription business models: https://www.subscribeandconquer.com/guide/subscription-business-models Free Trial **A time-bound period (typically 7, 14, or 30 days) of full product access designed to convert prospects to paid subscribers.** Opt-in trials (no card required) drive top-of-funnel volume; opt-out trials (card required) drive higher conversion but lower volume. Most consumer subscription businesses see 40-60% trial-to-paid conversion on opt-out trials. ## G GRR (Gross Revenue Retention) **GRR is the percentage of recurring revenue retained from a cohort, excluding any expansion — capped at 100%.** GRR isolates the leak. World-class SaaS targets 90%+ GRR; consumer subscriptions typically run 60-80%. Pair with NRR to see whether expansion is masking a retention problem. Read more → Subscription retention strategies: https://www.subscribeandconquer.com/guide/subscription-retention-strategies ## I Involuntary Churn **Subscriber loss caused by failed payments — expired cards, insufficient funds, or fraud blocks — rather than active cancellation.** Involuntary churn typically accounts for 20-40% of all subscription cancellations and is the most recoverable form. Account updaters, intelligent retries, and pre-expiry email flows together claw back the majority. ## L Logo Retention **The percentage of customer accounts (logos) retained over a period, ignoring revenue per account.** Use logo retention to judge product fit; use revenue retention (GRR/NRR) to judge commercial fit. Sharp divergence — high logo retention but low GRR — usually means downgrades are eating contract value. LTV (Lifetime Value) **LTV is the total gross profit a subscription business expects to earn from an average customer over the lifetime of the relationship.** Simple form: LTV = ARPU × gross margin ÷ churn rate. Use LTV against CAC to size acquisition channels — anything below 3:1 LTV:CAC is hard to scale profitably. ## M MRR (Monthly Recurring Revenue) **MRR is the predictable subscription revenue normalised to a one-month value, regardless of billing cadence.** Annual contracts are divided by 12 to express in MRR. The MRR movement equation — New + Expansion − Contraction − Churn = Net New MRR — is the operating heartbeat of every subscription business. ## N NDR (Net Dollar Retention) **NDR is another name for NRR — the percentage of recurring revenue retained from a cohort, including expansion, net of churn and contraction.** Used interchangeably with NRR in SaaS reporting. Public SaaS benchmarks: best-in-class >130%, healthy 110-120%, concerning <100%. NRR (Net Revenue Retention) **NRR is the percentage of recurring revenue retained from a cohort over a period, including expansion and net of churn and contraction.** Calculated as (starting MRR + expansion − contraction − churn) ÷ starting MRR. NRR above 100% means the business grows from existing customers alone — the holy grail of subscription economics. ## P Paywall **A gating mechanism that requires payment (or signup) before content, features, or usage continues.** Hard paywalls maximise revenue per visitor; metered paywalls (e.g. 5 free articles a month) maximise reach. Mobile-app paywall design — copy, pricing layout, social proof — is now the single biggest driver of consumer subscription conversion. Read more → Mobile app subscriptions: https://www.subscribeandconquer.com/guide/mobile-app-subscriptions ## T Trial Conversion Rate **The percentage of free-trial signups who become paying subscribers at the end of the trial.** Opt-out trials (card on file) typically convert 40-60%; opt-in trials convert 10-25%. Onboarding quality, time-to-first-value, and a clear upgrade prompt at trial expiry are the three biggest levers. ## V Voluntary Churn **Subscriber loss caused by an active cancellation decision — distinct from involuntary churn caused by failed payments.** Reduce voluntary churn through better onboarding, in-product engagement, save flows in the cancellation journey, and pause-instead-of-cancel offers. A well-designed save flow recovers 15-25% of attempted cancellations. The full playbook ## Every term here is a chapter in the book. Subscribe & Conquer turns these definitions into 12 chapters of operating detail — pricing experiments, retention saves, dunning sequences, expansion plays — drawn from 21 years bootstrapping a subscription business to $50M. Read the free chapter → (https://www.subscribeandconquer.com/free-chapter) Coming 2026 | Free chapter + 90-day action plan included 873 waiting Coming 2026 · ## Structured data ```json [ { "@context": "https://schema.org", "@graph": [ { "@type": "DefinedTermSet", "@id": "https://www.subscribeandconquer.com/glossary#termset", "name": "Subscription Business Glossary", "description": "Plain-English definitions of the metrics, levers, and jargon that run modern subscription businesses — from MRR and ARR to dunning, NRR, and trial conversion.", "url": "https://www.subscribeandconquer.com/glossary", "inLanguage": "en", "creator": { "@id": "https://www.subscribeandconquer.com/about#person" }, "publisher": { "@id": "https://www.subscribeandconquer.com/#organization" }, "isPartOf": { "@id": "https://www.subscribeandconquer.com/#website" }, "speakable": { "@type": "SpeakableSpecification", "cssSelector": [ "h1", ".speakable" ] }, "hasDefinedTerm": [ { "@type": "DefinedTerm", "@id": 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