#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/