You have launched your own SaaS startup and the business was going great for you. However, recently you are in a phase where either your churn rate is increasing or the revenue from the subscription business is stagnant. The best way to come out of this zone is by optimizing the customer lifecycle with your SaaS application. Clientjoy is one such application that delivers value through a subscription-based model. While most people might suggest spending more on SaaS marketing, it is better to ask these questions first:
- What is your website visitor to signup ratio?
- What is your trial to paid conversion rate?
- What does the churn look like?
After answering these questions, you will realize that it is better to optimize customer conversion rate and work on churn management by “stopping the leak”.
Optimize Customer Lifecycle Funnel and Key Metrics
To build a successful SaaS company, you need to optimize the customer lifecycle funnel and key metrics. The three main components of the customer lifecycle funnel are:
Bringing in traffic is good for the company but it is effective only when people who are actually interested are attracted. Key acquire metrics helps in identifying the best source of traffic and the cost associated with each customer acquisition – both ideal and real. So, you can compare both acquisition metrics and optimize them by marketing right channels to acquire the best traffic. So, the key metrics include:
- Customer acquisition cost
Your free trial service is generating high traffic and a heavy conversion rate. But, are they becoming paid customers? If not, then either you have issues with your onboarding or misalignment between your website’s perceived value and the product’s true value. This is the reason for losing potential customers. The critically engagement metrics for your SaaS model will be to take benchmark measurements and then increase the metrics by improving onboarding and communication. So, the key metrics include:
- Session length
- Returning session
- Trial to paid conversion
- Active users
Acquiring new customers is more expensive and time-consuming than retaining existing users. So, never ignore your original customers. Prevent churning before it happens, by providing the best customer support and service. Identify the red flag metrics to reduce churn. Once you have controlled your churn, the key retention metric for growth is Expansion MRR, i.e. to increase revenue from upsells and cross-sells. So, the key metrics include:
- Activity churn
- Cancel intent behavior
- Past due accounts
- Expansion MRR
It is important to optimize all the metrics if you want to grow your SaaS startup and increase revenue. Clientjoy ensures that you are able to optimize all these metrics in the best manner possible so that your SaaS start-up is able to perfectly tap its target consumers.