How to reduce customer churn
Research austria phone numbers says that 97% of users churn silently, which makes it a little difficult to understand the reasons behind churn. Let’s discuss some practical ways to reduce customer churn.
Identify why customers are churning
Conduct research on your business using product analysis tools. Verify your product hypotheses and solutions to provide you with answers.
Find solutions that will help reduce customer churn
Start making changes after testing your hypothesis, analyzing the impact and optimizing at a level where you have improved your product and created customer journeys.
Customer Acquisition Cost (CAC)
Every business needs to understand the cost and effort it takes to acquire new customers. The basic formula for calculating this metric is to divide your total sales and marketing spend by the total number of customers you acquired over the same period. You’ll also need to be familiar with other important calculations that are closely related to CAC, such as cost of goods sold (COGS).
Months required to recover CAC
This is the time it takes to generate enough revenue to cover the cost of acquiring new customers. It is calculated by dividing the CAC by the MRR and multiplying the figure by the gross profit percentage. Months it takes to recover CAC.
Gross profit margin
Gross profit is a calculation of your general business income minus your total costs of doing business. You need to make sure that you are calculating operating costs for all business divisions.
Conversion rate
When evaluating certain key SaaS metrics, conversion rate stands at the top of the mountain. This metric is meant to better understand the performance of your products and services. It also allows you to assess the value offered by the products and services you provide to your audience in your market.
There are also other important SaaS conversion rate metrics you need to know. Let’s check them out!
Base conversion rate
This conversion rate can be calculated using Google Analytics, although you can also use a manual method. You can calculate it by dividing the total number of website visitors by the number of conversions recorded within a given period.
Lead Sales Conversion Rate
Remember, SaaS marketing teams use leads to facilitate their day-to-day operations. They make this happen by using lead generation forms, social media presence, content marketing, and organic search.
Once they are given a sales opportunity, they are filtered by the sales and marketing teams and brought back into the business.
