Killer SaaS Metrics: The Impact of Churn, Customer Success and Instrumentation - January 2014
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Killer SaaS Metrics . Updated January 2014 @ Punchlime Confidential and Proprietary Stanley Sarpong, Olju Man & Atiq Khan. The Impact of Churn, Customer Success and Instrumentation on SaaS Performance
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Transcript of Killer SaaS Metrics: The Impact of Churn, Customer Success and Instrumentation - January 2014
Killer SaaS Metrics.
Updated January 2014
@Punchlime Confidential and Proprietary
Stanley Sarpong, Olju Man & Atiq Khan.
The Impact of Churn, Customer Success and Instrumentation on SaaS Performance
The Blind Men & Elephant.
Punchlime Confidential and ProprietaryImage source: expertcytometry.com
Saas Conversions. Case Study
200,000 Visitors
20,000 Free Trial Signups
500 Free Trial Users
200 Converted to paid
10%
2.5%
40% 1%
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Key SaaS KPIs.
1. COCA (Cost of Customer Acquisition)
2. LTV (Life Time Value per Customer)
3. Churn (Customers you lose per month/year)
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Why Churn is Your Killer Metric.
Success Metrics
Customers Acquired
Average Monthly Revenue per customer
Customers Lost
Customer Churn
Average Lifetime in Months per customer
Total Revenue
Valuation (if 5x)
Scenario 1
1200
$700
180
15%
6.7
$5.6M
$28M
Scenario 2
1200
$700
90
7.5%
13.3
$11.2M
$56M
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5 Years Example.
Potential impact of Churn on Revenue & Valuation
T Ford.
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The car without a dashboard
You can drive it, but you do not know how far you will get.
Image source: kpilibrary.com
Key Metrics per Evolution Stage.
1. Site Visitors
2. Trials
3. Stickiness
4. Signups
5. Recurring Revenue
6. COCA & LTV
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One Metric That Matters.
1. Site Visitors
2. Trials
3. Stickiness
4. Paying Clients
6. COCA & LTV
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At each stage of the business evolution
20KSigned Up
10%Signup
conversion
500Trial started
0.25%Visit to Trial Conversion
5. Recurring Revenue
200Converted from Trial
Recurring Revenue from previous month/year
Net New Recurring Revenue per month/year
Marketing & Sales Expenses / Total new
clients&
Average monthly/yearly revenue per client *
Lifetime of Client
250Active Trials
0.125%Sticky Trial Users
200KVisitors
Early DaysOptimization Opportunity!
Free Trial Anatomy.
1. Active Trial Users
2. Casual Trial Users
3. Accidental Signups
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20KSigned Up
500Trial started
500Trial started
250Active Trial Users
250Active Trial Users
Nurture casual trial users to increase conversions.
Likely to churn.
Best in class metrics based on 80/20 rule
10%
70%
20%
Early DaysOptimization Opportunity!
Trial users most likely to buy.
