SaaStr

APRIL 4, 2023

Thankfully, the SaaS world doesn’t require spears and bows, but it does require a careful approach. Find The Balance Between CAC And LTV The achievable lifetime value defines your customer acquisition cost target. And your CAC target defines your GTM strategy. But the key is to ensure your CAC isn’t higher than the LTV.

Scale 231

Scale Strategy Scaling Outbound Sales Team 231

Cardin Partners

FEBRUARY 6, 2018

There’s something a bit magical about the LTV:CAC ratio. So it seems natural to conclude that the ratio between (fully discounted) LTV, and CAC, or the so-called “LTV:CAC ratio”, is of paramount importance to both SaaS company and their prospective investors (or, indeed, their prospective acquirers).

SaaS 40

SaaS Business Model Acquisition B2B 40

For Entrepreneurs with David Skok

OCTOBER 28, 2021

This is the second part of the 2021 SaaS Survey that we conduct in partnership with KBCM. This post contains the following sections: CAC Ratios and CAC Payback … The post 2021 SaaS Survey Results – Part 2 appeared first on For Entrepreneurs.

SaaS 130

SaaS Startup 130

Kellblog

FEBRUARY 22, 2024

So you end up with very rich content, which in this case lasts significantly longer than 20 minutes. More like 72, but who’s counting?)

Sales Hiring 86

Sales Hiring Forecasting Interviewing Customer Success 86

Kellblog

JUNE 17, 2023

Those who find SaaS benchmark reports as impenetrable as James Joyce. the mind of someone who spends far too much time thinking about SaaS metrics), as I read this report. ” Insight is a top-tier firm so this is not a random sample of SaaS companies. CAC payback period (CPP) is simply not a sales efficiency metric.

Scale 103

Scale Sales Benchmarks Metrics 103

SaaStr

JANUARY 24, 2021

His SaaS CEO asked him to stop selling so much. Well, it does make sense, when you understand the scenario, a combination of two things: First, this SaaS company has a mix of freemium customers and sales-driven customers (with higher ACV, lower churn). Second, this SaaS company had a very tight balance sheet.

Scale 338

Scale Sales Hiring Scaling Construction 338

User Pilot

OCTOBER 5, 2023

Reducing the CAC payback period can help SaaS companies boost their financial performance and drive growth. TL;DR The CAC payback period measures the time it takes for a company to recover the money invested in new customer acquisition. What is CAC payback? Why is tracking the CAC payback period important?

SaaS Payments 96

SaaS Payments Customer Lifetime Value Payment Solutions Acquisition 96

Baremetrics

SEPTEMBER 23, 2021

Ever heard about the golden ratio? I am talking about the SaaS golden ratio. Well, this number is the ideal LTV to CAC ratio for SaaS businesses. If you want to get in-depth metrics for your SaaS or subscription business, start using Baremetrics today with a 14 day free trial. Why does CAC matter?

Subscription 102

Subscription Payment Features Churn Acquisition 102

Kellblog

MARCH 29, 2023

Just a quick post to share the slides from the presentation I gave today at the KiwiSaaS conference to discuss the SaaS metrics that matter in 2023 and 2024. This includes an explanation of why I excluded (what I view as old school) churn, lifetime value (LTV) and LTV/CAC analysis from those metrics.

Metrics 123

Metrics Compensation Benchmarks Interviewing 123

User Pilot

AUGUST 10, 2023

And the customer acquisition cost (CAC) shows you how effective you’re with your sales and marketing efforts to acquire new customers. In this article, we’ll delve into the ins and outs of CAC, its industry-specific benchmarks, and the proven practices to improve it. The average CAC varies across industries.

Acquisition 74

Acquisition Benchmarks Customer Lifetime Value B2B 74

Baremetrics

OCTOBER 26, 2021

All the data your startup needs Get deep insights into your company's MRR, churn and other vital metrics for your SaaS business. What is CAC for Shopify Partner Apps? Use Baremetrics to calculate CAC for Shopify Partner Apps CAC for Shopify Partner Apps How do you calculate CAC for Shopify Partner Apps?

Payment Solutions 98

Payment Solutions Payments Payment Methods SaaS Payments 98

Kellblog

NOVEMBER 23, 2022

For example, CAC ratio (the S&M cost of a dollar of new ARR) is certainly ARR-related, but it’s also P&L-driven because the S&M cost comes from the P&L. If I had to value a SaaS company with only two numbers, they would be ARR and YoY ARR growth rate. Burn ratio = cashflow from operations / net new ARR.

Technical Review 117

Technical Review Software Review Forecasting Churn 117

ChurnZero

JUNE 9, 2023

A healthy GRR industry benchmark is 80-85% while high-performing SaaS companies often reach 90%. Customer acquisition cost (CAC) The churn rate is a good segue to address CAC. Since SaaS companies often have a payback period, if a customer churns in onboarding, you haven’t just lost revenue, the company is also taking a loss.

Finance 98

Finance Metrics Customer Success Headcount 98

User Pilot

FEBRUARY 28, 2024

Try Userpilot and Take Your Product Engagement to the Next Level Get a Demo 14 Day Trial No Credit Card Required What is a customer path in SaaS? A customer path in SaaS is a map used to visualize the ways users navigate across your product. LTV to CAC ratio. MQLs, SQLs, CQLs. Customer lifetime value. NPS and CSAT.

Customer Lifetime Value 91

Customer Lifetime Value SaaS Software Review Acquisition 91

FastSpring

SEPTEMBER 2, 2020

LTV is also closely tied to your Customer Acquisition Cost (CAC) —the metric that calculates how much it costs your company to turn a lead or a prospect into a paying customer. That’s because if your CAC is higher than your LTV, it’s impossible to make a profit. Tracks Your LTV/CAC Ratio.

Scale 135

Scale Payment Methods Payments SaaS Payments 135

Baremetrics

SEPTEMBER 26, 2021

There might not be an industry more addicted to its metrics than SaaS, and there is good reason for it. Coming from data and engineering backgrounds, most SaaS founders know that good decisions require good data, and great decisions require as much good data as you can find. But how many SaaS financial metrics are you really tracking?

Metrics 95

Metrics SaaS Payments SaaS Customer Lifetime Value 95

Kellblog

MARCH 17, 2022

Earlier this week I appeared on a webinar with You Mon Tsang , founder and CEO of ChurnZero , a SaaS application aimed at helping subscription businesses reduce churn. Net revenue retention (NRR), aka net dollar retention (NDR) for those who work only in dollars, which is probably the hottest SaaS metrics after ARR and ARR growth.

Metrics 101

Metrics Customer Success SaaS Benchmarks 101

Baremetrics

OCTOBER 8, 2021

For many SaaS enterprises, Stripe is the payment processor of choice. That’s why most SaaS businesses use a third-party analytics dashboard for everything from basic SaaS metrics to financial forecasting and customer segmentation. One of the most important metrics is customer acquisition cost (CAC). What is CAC?

Payment Services 96

Payment Services Payment Methods Payments SaaS Payments 96

Baremetrics

NOVEMBER 2, 2021

Method 1 Method 2 Use Baremetrics to calculate all of your metrics including LTV for Shopify Partner Apps Customer acquisition cost (CAC) and LTV Knowing what your LTV is for each customer segment is critical Why is it important to segment the LTV for Shopify Customer Apps? CAC is the average cost of getting one new paid customer.

Payment Solutions 105

Payment Solutions Payment Methods Payments SaaS Payments 105

Baremetrics

OCTOBER 7, 2021

For example, if your conversion ratio is low, is that because your marketing team is bringing in poor leads, your sales team isn’t succeeding in converting high-quality leads, or your development team hasn’t put the best parts of your platform at the front for a successful free trial? Lead-to-opportunity ratio: What is your lead quality?

Payments 98

Payments Sales SaaS Payments Underperforming Technical Team 98

Baremetrics

NOVEMBER 2, 2021

Shopify is a huge opportunity for developers looking to expand into the micro-SaaS space. Quick ratio: How efficiently is your business increasing its MRR? Customer acquisition cost (CAC): What does it cost to onboard a new customer? Users to ratings ratio: How in love with your product are your customers?

Payment Solutions 98

Payment Solutions Outsourced Development Underperforming Technical Team Metrics 98

OPEXEngine

MAY 10, 2022

Will private SaaS valuations be affected by the drops in the stock market? These are questions that we have been hearing from SaaS CFOs across the spectrum. . Some SaaS companies that had been planning to file S-1s in Q1’22 are holding the registration. The Magic Number and CAC ratio. A ratio between 0 and 0.5

Technical Review 59

Technical Review Systems Review Benchmarks Investment 59

Stax

FEBRUARY 21, 2024

For modern Software as a Service (SaaS) companies, the automobile is replaced by primarily digital and cloud-based solutions and software. And because of the digital nature of SaaS businesses and their subscription-based business models, the ability to collect data on how the company is performing is easier and faster than ever.

SaaS Payments 88

SaaS Payments Payments Payment Services Stax 88

User Pilot

APRIL 23, 2023

Do you know which product health metrics to track to achieve long-term success for your SaaS business? Stickiness is the ratio of daily active users to monthly active users. Customer acquisition cost (CAC) CAC, or customer acquisition cost, is the average cost of acquiring one new customer.

Metrics 79

Metrics Customer Lifetime Value SaaS Scale 79

OpenView Labs

NOVEMBER 16, 2021

For software-as-a-service (SaaS) companies, successfully achieving rapid growth and sustainable profitability is anything but simple. Before they know it, analysis paralysis sets in, and they find themselves consumed by a virtual alphabet soup of SaaS metrics and corresponding acronyms (CAC, ARR, ACV, LTV, to name a few).

Benchmarks 71

Benchmarks Scale Metrics Sales Recruiting 71

Baremetrics

OCTOBER 8, 2021

Stripe is often the payment processor of choice for SaaS businesses because it can handle recurring revenue streams. Indeed, to get the most out of customer data, SaaS businesses often rely on a third-party analytics dashboard for everything from basic SaaS metrics to financial forecasting and customer segmentation. What is LTV?

Payment Services 94

Payment Services Payments SaaS Payments Payment Features 94

SaaStr

SEPTEMBER 20, 2023

Beyond multiples, many Cloud companies faced a deluge of headwinds that impacted business fundamentals… Lengthening sales cycles Tightening customer budgets It was no surprise that SaaS IPOs came to a screeching halt. Today, this ratio is closer to 2:1. Become more efficient by right-sizing G&A through fighting SaaS sprawl.

Cloud 250

Cloud Payments Software Review Payment Solutions 250

Point Nine Land

JULY 12, 2021

A longer CAC payback time is OK if you have strong negative churn. High CACs for paid acquisition may be OK if your blended CACs are much lower. If you have a low LTV (AKA you’re selling to mice or rabbits) you better have low CACs?—?or So you’ll have to make your LTV/CAC ratio work.

Metrics 69

Metrics SaaS Churn Acquisition 69

Intercom, Inc.

SEPTEMBER 10, 2020

In the world of SaaS, this is usually in the form of unit economics : a customer lifetime value (LTV) to customer acquisition cost (CAC) ratio of greater than three, and a payback period of 12 months or less. And you should just throw everything and the kitchen sink at them to make that happen.”. Next comes go-to-market fit.

Scale 226

Scale Scaling Sales Recruiting Sales Hiring 226

Baremetrics

NOVEMBER 2, 2021

Customer lifetime value (CLV) is one of the main metrics SaaS companies track to monitor their profitability and growth. When your SaaS company is just starting out, you need to use a different method to calculate your CLV. CAC is the average cost of getting one new paid customer. What is Baremetrics?

Customer Lifetime Value 98

Customer Lifetime Value Payment Services Payments SaaS Payments 98

User Pilot

AUGUST 15, 2021

A key reason why customer engagement metrics are important to successful SaaS businesses. The most important engagement metrics: CR across the journey, LTV: CAC, activation rate, feature engagement, active users, customer engagement score, NPS, CSAT, retention, customer churn. LTV to CAC ratio.

Engagement 98

Engagement Metrics Scale SaaS 98

User Pilot

JANUARY 31, 2023

TL;DR Product launch in SaaS refers to bringing a new or upgraded product to the market. A successful product launch helps SaaS companies establish themselves in the market, increase brand awareness, and drive more revenue. SaaS Product Launch Phases. Why is a successful product launch essential for a SaaS company?

Metrics 88

Metrics Scale Software Review Retention 88

User Pilot

MAY 17, 2021

Acquisition stage KPIs to track: CAC, Free Trial signups , or Demos booked. Adoption stage KPIs to track: Active User, DAU to MAU ratio , Feature Adoption Rate. Retention stage KPIs to track: Customer Churn, Revenue Churn , LTV, LTV to CAC ratio , User Retention Rate. KPI #1: Conversion Rates for Product-Led Growth SaaS.

Product Marketing 95

Product Marketing Metrics Customer Lifetime Value Marketing 95

Kellblog

MAY 19, 2021

” — Me responding to Ray calling me the Yoda of SaaS metrics. Just a quick post to highlight my recent appearance on the Metrics That Measure Up podcast, hosted by Ray Rike , founder and CEO of RevOps^2 , a firm focused on SaaS metrics and benchmarking. “Measure or measure not. There is no try.” Rangaswami.

Metrics 89

Metrics Scale Benchmarks Acquisition 89

SaaS Metrics

SEPTEMBER 4, 2020

They’re the assets that help corporations sustain their competitiveness in the cutthroat SaaS market. That said, the CAC (customer acquisition costs) associated with these customers eat away at potential profits. This is simply why the LTV or lifetime value of each customer needs to be greater than the CAC.

Technology 96

Technology Acquisition Investment Metrics 96

Tom Tunguz

APRIL 10, 2016

There many ways of measuring a SaaS company’s efficiency: magic number, payback period on cost of customer acquisition, lifetime value to cost customer acquisition ratio, quick ratio. A SaaS company’s revenues are a collection of annuities, contracts that pay fees on an ongoing basis. CRGPD = (1000/.28

SaaS 141

SaaS Acquisition Churn Customer Success 141

The SaaS CFO

MAY 19, 2021

Almost everyone in SaaS has heard of the LTV to CAC ratio. And almost everyone has heard that we should target an LTV to CAC ratio of at least three. This was popularized (I believe) by the great content published by David Skok on SaaS metrics. But what does it mean to have an LTV […].

Metrics 52

Metrics SaaS Acquisition 52