Date post: | 07-Aug-2015 |
Category: |
Technology |
Upload: | growbots-blog |
View: | 734 times |
Download: | 0 times |
#7 Know your early growth SaaS metrics inside out!
During early stages of product development and growth, it’s easy to focus on finding “product-market fit” and validating that your product solves a valuable problem for real people. In this period, any form of growth is usually considered as a positive indicator of early traction - as long as the charts are moving up and to the left, everything’s good, right?
Right!No, wait a minute . . . of course, watching growth is not enough. This is a common mistake among startups. Measure, and measure diligently. For your own sake and because your SaaS metrics are something you should be 100% sure of, always.
Ed Shelley, ChartMogul
Greg Pietruszynski,Growbots
#find your way
It’s important to find a measurable way to monitor and understand the growth of your company, and to go deeper than just “we won another customer, woohoo!”
Monthly Recurring Revenue (MRR)
We need to ensure that we’re building a business that’s sustainable. SaaS business models are ideal for rapid growth - they are built on recurring revenue, which compounds and grows over time.
#1
Monthly Recurring Revenue is the heartbeat of any subscription business, large or small.
#definition
Simply put, your MRR value is the amount of money your business would generate next month if all customers
are paying monthly and you had no new customers, cancellations, upgrades or
downgrades.
Dig deeper into MRR
#2
1.
2.
4.
3.
New Business MRR
Expansion MRR
Contraction MRR
Churn MRR
5. Reactivation MRR
It can be helpful to represent these MRR Movements on a single chart
Customer Churn Rate Per Customer Cohort
Customer Churn Rate is the rate at which you’re los ing customers through subscr ipt ion cancellations.
#3
#key benefit
This metric has a key benefit for early-stage SaaS companies - analyzing the churn per
Customer Cohort.
Identify specific months in the customer’s lifetime where customers are churning. Focus your
Customer Success efforts here.
Don’t oversell, focus on minimising churn rather than maximising sales
– it is much harder to convince someone who at some point
decided that your product sucked than to acquire a new customer.
#trouble
Luke Deka, CPO Growbots
upsell to reach negative churn
#hacks to reduce
contact customers at risk group
consider annual billing
always ask why they cancel; fix the problem
Read the whole article here: http://blog.growbots.com/
startup-growth-academy-7-growth-saas-
metrics
Join FREE Marketing Course!
growbots.com | blog.growbots.com
Greg Pietruszynski | @pietruszynski CEO Growbots - A.I. for Sales | @growbots_
Ed Shelley | @mr_edDirector of Content Marketing at ChartMogul, with the goal of making SaaS metrics accessible to any subscription business.chartmogul.com | chartmogul.com/blog/