Active Accounts Waterfall
What is Active Accounts Waterfall?
The Active Accounts Waterfall metric quantifies the number of current customers or clients that have engaged with the company's products or services during a specified period. It provides insight into the total count of actively participating customers, disregarding revenue amounts.
The metric can be broken down into its different components: Start of Period Accounts, New Accounts, and Churned Accounts.
Why is it important to measure Active Accounts Waterfall?
For businesses, especially in the SaaS industry, tracking Active Accounts is essential for assessing customer retention and engagement. This metric typically encompasses a specific time frame, such as a month, quarter, or year, depending on the company's preference and business model. By monitoring the number of Active Accounts over time, companies can gauge the success of their customer retention efforts and identify trends in customer activity.
The Active Accounts Waterfall metric is particularly valuable for evaluating the overall health and growth of a business, as a higher number of Active Accounts often signifies customer satisfaction, loyalty, and effective customer relationship management. Conversely, a declining count of Active Accounts may indicate potential issues with customer retention and engagement that require attention.
Overall, measuring the Active Accounts Waterfall metric enables companies to make data-driven decisions regarding customer retention strategies, product improvements, and customer support to maintain a robust and engaged customer base.
How is Active Accounts Waterfall calculated?
The Active Accounts Waterfall is calculated by summing the number of Active Accounts in each period that attributed recurring revenue. The metric indicates how Active Accounts developed during the period by categorizing accounts into different components based on their source:
- Start of Period indicates the number of Active Accounts at the beginning of the period.
- New Accounts sums the number of accounts that became active during the period.
- Churned Accounts sums the number of accounts that became inactive during the period.
Active Accounts Waterfall = Start of Period Active Accounts + New Accounts - Churned Accounts