How To Calculate ARR by Cohort in HubSpot CRM | Arithmix

Calculating ARR by cohort is an important metric for businesses looking to understand their revenue growth over time. ARR, or annual recurring revenue, is the amount of revenue a business expects to receive each year from its customers. Cohort analysis, on the other hand, groups customers based on a shared characteristic, such as the month they signed up for a service or the product they purchased. By analyzing ARR by cohort, businesses can gain insights into how their revenue is growing over time and which cohorts are driving that growth.

What Is ARR by Cohort?

ARR by cohort is a metric that measures the annual recurring revenue generated by a specific cohort of customers. A cohort is a group of customers who share a common characteristic, such as the month they signed up for a service or the product they purchased. By analyzing ARR by cohort, businesses can gain insights into how their revenue is growing over time and which cohorts are driving that growth.

For example, let's say a business has two cohorts of customers: one that signed up in January and one that signed up in February. The January cohort generated $10,000 in ARR in their first year, while the February cohort generated $12,000 in ARR in their first year. By analyzing ARR by cohort, the business can see that the February cohort is driving more revenue growth than the January cohort.

When Is It Valuable To Calculate ARR by Cohort?

Calculating ARR by cohort is valuable for businesses that want to understand how their revenue is growing over time and which cohorts are driving that growth. This information can help businesses make strategic decisions about how to allocate resources and prioritize initiatives.

For example, if a business sees that a particular cohort is driving a significant amount of revenue growth, they may want to invest more resources in retaining and upselling those customers. On the other hand, if a cohort is not generating as much revenue as expected, the business may want to investigate why and make changes to their product or marketing strategy.

Overall, calculating ARR by cohort is a valuable tool for businesses looking to understand their revenue growth over time and make data-driven decisions about how to allocate resources and prioritize initiatives.

How Do You Calculate ARR by Cohort in HubSpot CRM

HubSpot CRM itself isn't naturally geared towards letting you calculate complex metrics like ARR by Cohort. As an alternative, teams typically use products like Arithmix to import data from HubSpot CRM and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers you'll powerful yet easy to use. With Arithmix you can import data from systems like HubSpot CRM, combine it with data from other systems, and create calculations like ARR by Cohort.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating ARR by Cohort in Arithmix

Calculating metrics like ARR by Cohort is simple in Arithmix. Once you've created your free account, you'll be able to import your HubSpot CRM data, and use it to create natural language formulas for metrics like ARR by Cohort.

Arithmix is designed to give you the power to build any calculations you want on top of your HubSpot CRM data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.