The only 2 ways to build a $100 million business

Version One Ventures

The biggest driver for high LTV is repeat purchase behavior (in an e-commerce business) respectively a low churn rate (in a SaaS company). In addition, churn tends to rise as a company grows. News $100 million Churn rate e-commerce Facebook LTV marketplaces network effects Software as a service viral coefficient Viral marketing Zynga

SaaS CEOs: Measure Customer Engagement – Increase Conversions & Lower Churn

For Entrepreneurs

Building for Success SaaS Sales & Marketing Machine Startup Help churn churn rate Cost of Customer Acquisition customer engagement SaaS business SaaS churn SaaS churn rate SaaS customer engagement saas marketing SaaS sales SaaS VCThe goal of a SaaS CEO should be to increase the profit they make from each customer (LTV), and lower the costs in sales and marketing that it takes to acquire each customer (CAC).

Trending Sources

What You Need To Know About The Churn Rate And How To Fight It

YoungUpstarts

Churn Rate. But many first time SaaS merchants overlook churn or don’t even know what churn is. We will explore the ins and outs of churn and tell you how to fight it. What is churn rate? In a perfect world, churn wouldn’t exist.

2013 Pacific Crest SaaS Survey

For Entrepreneurs

We worked together with Pacific Crest, an investment banking firm with a specific focus on SaaS, to survey 155 SaaS companies on a variety of topics such as growth rates, CAC (cost to acquire a customer), gross margins, churn rates, etc. Business Model SaaS CAC churn

2014 Pacific Crest Saas Survey- Part 2

For Entrepreneurs

This week we dive into the results from Part 2 of the survey where we compare application delivery methods, operational costs and gross margins, contract terms, churn rates, capital requirements and accounting […]. Last week I shared the results from Part 1 of our survey in which 300+ SaaS companies shared data on their growth and go-to-market strategies.

Hiring a data-driven modern marketing team

The Next Web

Conversions, leads and churn rate. Nick is the founder and CEO of Delmondo. He works with brands and startups improving their digital marketing and social media strategy, focusing on branded content.

The 5 Metrics You Need to Track for Your Subscription Business to Succeed

Up and Running

Churn and Churn Rate. Churn is the number of customers that cancel your service in a given month – when they leave, they’ve “churned out” and are no longer subscribing to your service. Churn rate is the percentage of customers that leave every month.

2015 Pacific Crest SaaS Survey – Part 2

For Entrepreneurs

This week I’m sharing the results from Part 2 of the survey where we compare application delivery methods, operational costs and gross margins, contract terms, churn rates, capital requirements and accounting methods. Last week I posted the results from Part 1 of our survey in which 300+ SaaS companies shared data on their growth and go-to-market strategies.

Visualizing the Interactions Between CAC, Churn and LTV

A Smart Bear: Startups and Marketing for Geeks

But it’s surprising to me how many companies with recurring/subscription revenue don’t understand the interactions between the elements that make up customer acquisition cost (CAC), churn and lifetime value (LTV). (Guest post by Gordon Daugherty.

Free Trial Average Conversion Rate and Other Metrics

Guy Nirpaz

Following Lincoln Murphy’s post on SixteenVentures.com (talking about conversion average rate for free trials, pricing pages or Freemium for SaaS or Web Apps), conversion rate average figures will do no good, as it doesn’t reflect the whole picture and usually lacking context.

Don’t Be Gunshy Because You Dealt With Bucketheads The Last Time Around

Feld Thoughts

One of these was around churn – he asserted that one of the clear weaknesses of the business was the high churn rate. He didn’t have a high churn rate at all – in fact, his churn rate after a customer was paying for three months was minimal. Instead of articulating a powerful story about low customer acquisition costs with minimal downstream churn, he lead with “the worst problem with the business is our high churn rate.”

Why Metrics Get Worse With Scale

Seeing Both Sides

Conventional wisdom suggests that the most important metrics for a startup - such as unit economics, cost of acquisition, lifetime value, churn rates - typically get better with time. Take growth rate as a simple one. Churn rates are another metric that can get harder with scale.

This Is Why You Should Start A Subscription Box Business

YoungUpstarts

More importantly, a subscription business model enables you to manage the cash flow, upgrade your business planning and optimize metrics such as churn rates, the lifetime value of a customer, expansion, and more. by Stefan Pretty, founder of Subbly.

The SaaS Executive Dashboard

Guy Nirpaz

Totango SaaS Executive Dashboard captures the current SaaS best practices around monitoring customer engagement and customer success and tracks visitors, signups, activations, conversions and your SaaS churn rate.

Analysing cohorts made easy

The Equity Kicker

CAC and payback period are key inputs into the financial model which works out how much cash a company will burn each month at a given growth rate, and therefore whether a company can get past key revenue milestones before they need to raise their next round.

8 Smart and Practical Ways To Increase Your Small Business Profits

crowdSPRING Blog

Are they staying with your products/services for a long time or using for a short time and leaving (this is called “churn”). A churn rate is the percent of customers who terminate their relationships with your company in a specific period (a month, for example).

Do You Value Customer Relationships as Much as You Should?

Inc Startups

One simple way to calculate customer lifetime value is average monthly spend per customer divided by monthly customer churn rate. So in this example, if the business could cut churn rate in half to 5 percent, it would double its customer lifetime value.

What I’ve Learned About Venture Funding

Both Sides of the Table

But if you don’t – now you have many cynical VCs lining up critiquing your CAC/LTV ratios, your churn rates, your poor performing cohorts. VC funding. Our perspectives on the topic wax and wane with market cycles.

When Customers Make You Smarter

Steve Blank

And they realized that the use of the Tidepool software could reduce the device companies’ customer churn rate by at least 1%. We talk a lot about Customer Development, but there’s nothing like seeing it in action to understand its power.

SaaS Math: Activation, Retention and Churn

StartupCFO

This week we’re talking about activation, retention and its polar opposite – churn. As you will see, churn and retention are the most important metrics to the long-term success of a SaaS business. Churn is the % of users / customers that abandon the service over time.

The 7 Key Metrics Every Business Owner Should Monitor

Up and Running

For example, if you have an eCommerce website , you’ll want to measure unique visitors, referrals, bounce rate, and similar. If you’re running a subscription business , you’ll want to track churn rate, monthly recurring revenue, lifetime value, and so on. What Is Cash Burn Rate?

How To Calculate & Increase Customer Lifetime Value

ConversionXL

Calculating Your Customer Retention Rate. If you’ve been doing business longer than a few months pay attention to your customer retention rates. In order to calculate your customer retention rate you need to know: Number of customers at the end of the period – E.

Profit and Loss Responsibility

SVPG

It may include profitability, but it more likely will focus on increasing growth, or reducing churn rate, or driving up engagement, or driving revenue, or any number of other possible goals. One question that I continue to get from many company leaders is whether or not product managers should be given P&L responsibility for their products.

Why Misunderstanding Startup Metrics Can Cost You Your Business

Both Sides of the Table

In product business it is often measured over multiple purchases and assumptions are made about the repeat rates and in the enterprise or services world LTV can be based on churn rates, which are notoriously hard to predict in an early-stage business.

How To Succeed As A Product Manager

YoungUpstarts

These metrics can be obtained through analysing a conversion rate. Another kind of metric in this group is the churn rate which shows all the losses, e.g. in revenue, customers, etc. by Beata Green, Director of HeadChannel.

One of the Biggest Mistakes Enterprise Startups Make

Both Sides of the Table

Professional services = higher rate of successful rollouts. The more your product is integrated with other systems the lower your churn rate will be. Professional services + systems integration = lower churn. This article initially appeared on TechCrunch.

The Cult of “Great Product”

Startup Marketing Blog

A “false promise” will cause a high churn rate (people who stop using your product). Many of the most successful founders, CEOs and VCs in Silicon Valley belong to the cult of great product. They understand that a great product is critical to the success of a startup. News around passing of Steve Jobs has galvanized even more people to jump on the “great product” bandwagon.

A Complete Guide to Forecasting Sales for Your Monthly Subscription Business

Up and Running

Finally Churn, which is the ultimate number that any company with a subscription business model must pay very close attention to. Churn is the rate at which customers are canceling and leaving your service. Think of churn as a hole in the bottom of the bucket.

Metrics that matter to social platforms (Part 1/3)

Version One Ventures

On the flip side of engagement, we can look at churn as a measure of the number of individuals moving out of a collective group over a specific period of time. Churned users can be segmented as follows: Total Churned Users = New Churned Users + Old Churned Users.

4 Business Metrics You Can’t Afford to Ignore

Inc Startups

Churn rate. A rising churn rate could be caused by a number of factors: Dissatisfaction with your products and services, new competition in your market, or even the coming end of a product or service cycle. Churn rate is a solid indicator of rising CAC and lower LTV.

3 Creative Ways to Grow Your Email List

Duct Tape Marketing

This churn rate, as it’s called, is comprised of subscribers who unsubscribe, mark your email as spam, change employers (and therefore email addresses), and so on. Thursday is guest post day here at Duct Tape Marketing and today’s guest is from DJ Waldow – Enjoy!

SMS 34

Getting Your Series A Mojo Back

Both Sides of the Table

Your churn rates are too high. You Need to Find Your Mojo A Chip On Your Shoulder A few years ago I wrote a blog post on entrepreneurs with a chip on their shoulders. I think it’s an important read.

Understand learning profiles before hiring

Version One Ventures

We all understand the high costs of recruiting, onboarding, and knowledge transfer associated with high employee churn rates. Finally, I’m aware that other important parts of employment lead to churn, like company culture and values, financial compensation, etc.

Boost Your SaaS Business Revenue With These 12 Strategies

Up and Running

Reduce churn. Churn is essentially your cancellation rate. The percentage of your paying customers that cancel is your churn rate. Obviously, a lower churn rate is better. Improve signup rates.

Negative Churn

Non-Linear Growth

In a board meeting yesterday, we had a brief discussion around “negative churn” Negative churn is a catchy phrase and apparently a hot-topic in some SaaS circles. Some background… What is Negative Churn? This begs a question: What if negative churn is NEGATIVE?

5 Key Growth Metrics Every Enterprise Startup Should Track

YoungUpstarts

Churn. The rate at which a customer cancels over a given year indicates whether your value proposition is resonating with your customers. They’ll segment their customers to analyze churn by category. Enterprise startups should aim for an annual churn rate under 10 percent.

How to Get Initial Traction with a Marketing Budget of Zero

Up and Running

Providing proper expectations will minimize the churn rate. Let’s say you have zero traction, an unknown product, and no budget to speak of. Perhaps not the most desirable position to be in, but at least you have some resources to tap into: time and creativity.

9 Things That Take a Pitch From Good To Great

Up and Running

0.22% average conversion rate. 5% monthly churn rate. I’ve seen hundreds of business pitches, and most of them—at best—are just okay.

Startups and financial models for SAAS companies

BeyondVC

In my mind some of these key variables include new bookings, growth of deferred revenue, churn rate, cost of acquiring new customers, and obviously cash. Another area that is quite important is churn rate. If your company churns or loses 5% of customers every month, then during the course of the year the company will have to replace a significant number of customers just to maintain status quo.

The Beginner’s Guide to SaaS Conversion Optimization

ConversionXL

Reducing churn rate. So you can more safely worry about fewer metrics on an eCommerce site, like increasing AOV or conversion rate (not that it’s easy to increase these). However it comes with its own set of challenges, like retention and churn. Churn.