SaaS Strategists,

Before we dig into today’s issue, I have a very important announcement!

My team and I have just opened the doors to our early adopters’ community for our upcoming content creation SaaS platform - Contiyo.

After actively posting content each day for well over 1 year we noticed that there isn’t an adequate solution on the market that helps content creators repurpose, collaborate, and track content across all major social media channels.

I’ll be sharing more updates on Contiyo soon since our plan is to create one of THE most straightforward content creation tools for agency owners, marketers, and busy founders.

To receive early benefits and a copy of our Ultimate Social Growth Playbook, visit Contiyo.com and join our beta-testing community!

Now let’s dig into today’s issue 👇

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Reading time: 3 minutes

Buzzwords, buzzwords, buzzwords.

MRR, CAC, LTV…

Always hearing the same old abbreviations.

However, they do make sense and are actually THE core metrics of a SaaS startup.

And if you’re a SaaS founder you should always have a strategy in place to quickly make sense of these metrics.

MRR measures the predictable revenue your business generates every month.

It’s crucial for understanding growth and financial health.

Without it, your business just ceases to exist.

To track MRR efficiently I always advise using tools such as Stripe or Baremetrics.

They are the most comprehensive tools on the market that will provide you the ins and outs of your business.

Lead generation is the lifeblood of any SaaS business.

Most of the metrics mentioned here are direct byproducts of lead gen processes.

CAC measures the cost of acquiring a new customer, helping you assess the efficiency of your marketing and sales efforts.

It’s directly correlated to LTV, which I’ll get to in a second.

Your goal should always be to keep your CAC low and your LTV high.

So how to track your CAC:

Combine marketing expenses and the number of new customers acquired within a specific period.

CRM tools such as HubSpot or Pipedrive can help track marketing costs and lead sources, while Google Analytics can measure conversion rates.

Learn to make a connection between the 2 and you’ll always be on top of your CAC game.

As mentioned in CAC, CLTV, or LTV for short is directly related to CAC.

CLTV represents the total revenue you can expect from a single customer account.

It helps in understanding the long-term value and sustainability of your customer base.

Some tools that are helpful in tracking CLTV are Kissmetrics, Salesforce or Segmetrics.

Naturally, you want to increase your CLTV as much as possible, in order to gain as much value from a single account.

But your platform also needs to give them something in return and constantly be updated and improved.

A churn rate indicates the percentage of customers who cancel their subscriptions within a given period.

High churn rates can be detrimental to growth.

To maintain a healthy churn rate, you should aim to keep it under 3%.

If you notice churning trends, this should be your main indicator that you’re doing something wrong.

Implement “exit interviews” and feedback forms to understand why your customers are leaving.

Churnkey is a great tool that can help you retain your users and decrease your churn rate.

They have a straight-to-the-point UI with ROI showcasing that always helps you understand how much money you saved by using Churnkey.

A big plus!

Referrals are one of the best strategies when it comes to growing a business.

I think that one week doesn’t go by that I don’t write a post about referrals.

So here we are:

NPS measures customer satisfaction and loyalty by asking customers how likely they are to recommend your product to others.

To implement a high-quality feedback loop inside your SaaS try using tools such as SurveyMonkey or Typeform in order to collect regular feedback, prevent churn, and increase your chances of customer acquisition.

This strategy could be your biggest leverage since it requires low investment, thus reducing CAC.

I hope you enjoyed today’s issue of SaaS Strats and while some may think this should be common knowledge, it’s great to remind ourselves about the core metrics we should really be tracking.

Once again a friendly reminder to check out Contiyo.com and join our early adopter’s community if you’re a busy founder & want to grow your personal brand.

Until next week,

Ognjen Gatalo

Chief SaaS Strategist ☁