As a growth marketer there are, most likely, a number of different metrics you look at on a regular basis to understand things like: adoption of a new feature, quality of traffic, growth in visitation, lift from a marketing campaign, funnel drop-off, cart abandonment, response to a messaging experiment, etc.
You might have a fancy (and largely overcomplicated) dashboard where you collect and analyze this data. For some of you, this is a great way to stay grounded in the data, or understand the levers you can push and pull, or maybe it just serves as a gut check — a place you can rely on to give you unbiased feedback.
These comprehensive dashboards are important, but to effectively drive growth you need to be measuring the impact of your programs and experiments against your core set of business metrics. For most SaaS companies this means measuring the impact your experiments have against these critical SaaS metrics:
Customer Acquisition Cost (CAC) Sum of all sales & marketing expenses / # of new customers added
Lifetime Value (LTV) Avg. MRR per Account / Churn Rate or Avg. MRR per Account * Gross Margin % / Churn Rate
LTV/CAC Ratio LTV / CAC*This number should be greater than 3
Months to Recover CAC CAC / Avg. MRR per Customer (should be less than 12 months)
Churn Lost MRR during period of measure
These are the core metrics that your CEO is most likely to be slicing and dicing to determine things like:
When to hit the gas vs. when to hit the breaks; Grow the team vs scale back; raise more money vs stay the course
Segmentation – where should we focus (types of customers, industry verticals, pricing cohorts, geo’s, lead types, and even sales reps.)
Which channels are worth investing more in vs cutting
These are the basics. There are more granular views of all of these measures (that you should be paying attention to), but if you get to know these core metrics, and measure your programs against them, and develop your models around them, you will become a much more successful growth marketer!
Understanding how to positively impact these SaaS metrics is where growth begins and ends for successful SaaS companies.
P.S. Interested in learning about Product Led Growth? Check out The Beginners Guide to Product Led Growth.
