What are Active Subscriptions?
An active subscription in Stripe refers to a payment plan that a customer has agreed to and is currently being charged for on a regular basis, this can include subscription services, membership fees, and other recurring payments.
This is a crucial metric for subscription-based businesses, as it provides insight into how successful the company is at retaining customers and attracting new ones.
Active subscribers show you the total number of subscribers with paid subscriptions at each interval's end.
By tracking the number of active subscribers over time, a company can assess the effectiveness of its strategies for reducing customer churn and growing its customer base.
How to differentiate active subscribers?
The active subscribers can be distinguished by their current plans into three types,
1) Active subscriptions on free plan - Active subscriptions on a free plan refer to a subscription service in which the customer is not currently being charged any fees.
2) Active trial subscribers - A trial plan is a type of subscription plan that allows customers to try out a product or service for a limited period of time, typically for a few days or weeks.
3) Active subscriptions by plan - An active subscription by plan refers to a customer currently being charged for a subscription service according to a specific pricing plan.
How are active subscriptions calculated?
The number of active subscriptions in Stripe is calculated based on a plan's billing frequency and price.
For example, if a business has a subscription plan that charges $100 per month and bills every month, the price will be calculated as $100/per month.
If a customer signs up for this subscription on January 1st, they will be charged $100 on February 1st and every month thereafter until the subscription is canceled.
If the billing frequency is different from that of your subscription plan, such as being billed annually instead of monthly—the customer will be charged at the annual rate. For example, if they pay $1000 per year and it's an annual plan, they would pay once in a 12-month period (at whatever interval you bill).
What causes changes to Active Subscriptions?
Several factors can cause changes to active subscriptions in Stripe:
1. Customer actions: Customers can pause subscription payments and resume them when they are ready to renew or cancel their subscriptions entirely.
2. Payment issues: If a customer's payment is declined, their subscription may be affected. For instance, the subscription could stop working until the problem with payments is resolved, or it could end altogether if customers cannot pay for your product.
3. Business actions: Businesses may also change their subscription plans. For example, they might update the pricing or features of a plan (or even discontinue it entirely).
4. Technical issues: System outages or errors can also cause changes in active subscriptions. For example, if a payment gateway goes down, it may delay or error processing subscriptions—and potentially change the status of those subscribers from active to inactive.
It's vital for businesses to regularly review and monitor their active subscriptions to ensure that they are running smoothly and that any changes are handled appropriately. Stripe provides a dashboard and analytics tools businesses can use to track and manage their subscriptions.