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Killer SaaS Metrics: The Impact of Churn, Customer Success and Instrumentation - January 2014
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Killer SaaS Metrics: The Impact of Churn, Customer Success and Instrumentation - January 2014

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Killer SaaS Metrics: The Impact of Churn, Customer Success and Instrumentation on SaaS Performance - January 2014

Killer SaaS Metrics: The Impact of Churn, Customer Success and Instrumentation on SaaS Performance - January 2014

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  • 1. Killer SaaS Metrics. The Impact of Churn, Customer Success and Instrumentation on SaaS Performance Stanley Sarpong, Olju Man & Atiq Khan. @ Updated January 2014 Punchlime Confidential and Proprietary
  • 2. The Blind Men & Elephant. Image source: expertcytometry.com Punchlime Confidential and Proprietary
  • 3. Saas Conversions. Case Study 200,000 Visitors 10% 20,000 Free Trial Signups 2.5% 500 Free Trial Users 40% 1% 200 Converted to paid Punchlime Confidential and Proprietary
  • 4. Key SaaS KPIs. 1. COCA 2. LTV (Cost of Customer Acquisition) (Life Time Value per Customer) 3. Churn (Customers you lose per month/year) Punchlime Confidential and Proprietary
  • 5. Why Churn is Your Killer Metric. Potential impact of Churn on Revenue & Valuation Success Metrics Scenario 1 Scenario 2 Customers Acquired 1200 1200 Average Monthly Revenue per customer $700 $700 Customers Lost 180 90 Customer Churn 15% 7.5% 6.7 13.3 $5.6M $11.2M $28M $56M Average Lifetime in Months per customer Total Revenue Valuation (if 5x) 5 Years Example. Punchlime Confidential and Proprietary
  • 6. T Ford. The car without a dashboard You can drive it, but you do not know how far you will get. Image source: kpilibrary.com Punchlime Confidential and Proprietary
  • 7. Key Metrics per Evolution Stage. 1. Site Visitors 2. Trials 3. Stickiness 4. Signups 5. Recurring Revenue 6. COCA & LTV Punchlime Confidential and Proprietary
  • 8. One Metric That Matters. At each stage of the business evolution 1. Site Visitors 200K Early Days Visitors Optimization Opportunity! 10% 20K 2. Trials Signup conversion Signed Up 500 Trial started 3. Stickiness 0.25% Visit to Trial Conversion 4. Paying Clients 250 0.125% Active Trials Sticky Trial Users 200 Converted from Trial 5. Recurring Revenue Recurring Revenue from previous month/year Net New Recurring Revenue per month/year 6. COCA & LTV Marketing & Sales Expenses / Total new clients Average monthly/yearly revenue per client * Lifetime of Client & Punchlime Confidential and Proprietary
  • 9. Free Trial Anatomy. Best in class metrics based on 80/20 rule Early Days 10% 1. Active Trial Users 250 Optimization Opportunity! Active Trial Users Trial users most likely to buy. 20% 2. Casual Trial Users 500 250 Trial started Active Trial Users Nurture casual trial users to increase conversions. 70% 3. Accidental Signups 20K 500 Signed Up Trial started Likely to churn. Punchlime Confidential and Proprietary
  • 10. Thank you. Image source: v3wall.com Punchlime Confidential and Proprietary