These five revenue metrics will help you measure how efficiently your product attracts, retains and increases paying customers: the cost of customer acquisition (CAC). Imagine that your SaaS product has 10,000 paying customers. Let's imagine that the figure above is just 2% of all your total leads. That's a HUGE amount of potential income that you're missing out on.
By calculating the relationship between customer lifetime value (CLV) and customer acquisition cost (CAC), you'll know how much you earn from customers for every dollar you spend on acquiring them. Your revenue growth rate tells you if your business strategies are working and how quickly. Think of this as the monetary value of customer retention. They can then answer on a scale of 1 (Strongly Disagree) to 7 (Strongly Agree).
People who give scores of 9 to 10 are likely to be active promoters, while scores of 6 or less can be considered detractors. If you're like most founders and teams, identifying the right metrics and figuring out the best way to monitor them can take a long time. Track and measure product-based growth metrics regularly to get an overview of your PLG strategy and see if it generates value. Growth analysis is the practice of evaluating data related to user acquisition, conversions, retention and sales to measure performance based on business objectives, identify key metrics for measuring growth, and determining the attributes that contribute to profitability.
Collecting and analyzing growth metrics allows companies to clearly understand what promotes conversions, repeat visits, customer retention, churn rates, and other growth factors. There are several ways to get a good end result, but it's essential that you have at least a basic understanding of the metrics most important to your company in order to scale those results.
