Sofie Couwenbergh

Privacy Preference We use cookies on our website. Some of them are essential, while others help us to improve this website and your experience. Essential Statistics External Media Accept all Home » Business » The Most Important Customer Retention Metrics – And How To Influence Them Save BUSINESS The Most Important Customer Retention Metrics – And How To Influence Them Individual Privacy Preferences Cookie Details | Privacy Policy | Imprint  MAY 20, 2021 Sofie Couwenbergh It’s not only cheaper to retain existing customers than it is to gain new ones, it’s usually easier too. On top of that, it’s estimated that an increase of just 5% in customer retention can lead to a revenue increase of no less than 25 to 95%. In this post, we’ll look at key customer retention metrics to track and share a list of things that influence them – and that you can improve on if needed. For a deeper dive into metrics to track for success, read our article on SaaS metrics. What Is the Customer Retention Metric? The customer retention rate (CRR) refers to the percentage of users that keeps using your SaaS month a er month. It’s the opposite of your customer churn rate. 7 SaaS Customer Retention Metrics that Require Your Attention CAC – Customer Acquisition Cost Your customer acquisition cost tells you how much it costs you on average to gain a new user, whether they’re a paying customer, on a free trial, or signed up  to the freemium version of your SaaS. The lower your CAC, the more quickly you’ll be able to break even. That’s why it’s Privacy Preference We use cookies on our website. Some of them are essential, while others us toyour improve this website important to not justhelp know overall CAC but also and your experience. your CAC per acquisition channel. Once you realize that some marketing and sales Essential Statistics External Media channels are much more cost-e icient in bringing in new users, you can focus on those and discard or lower yourAccept e orts all on others. CCR – Customer Churn RateSave Your customer churn rate indicates how fast users are canceling their Individual Privacy Preferences subscriptions within a givenCookie period. high Policy or increasing customer churn rate DetailsA| Privacy | Imprint points to either a decrease in customer satisfaction or a weak position in regards to your competitors. CLTV/LTV – Customer LifeTime Value Customer lifetime value is the retention metric that indicates the average revenue a customer brings you across the entire time that they’re signed up with you. If it goes down, that can point to increased customer churn. new users signing up to your freemium or lower plans. existing customers downgrading rather than buying add-ons. If it goes up, that can mean you’ve established your brand well and people are willing to pay for the value you o er. existing users are happy and willing to pay for an upgrade. existing users are happy and stay on for longer. CCR – Cumulative Cohort Revenue A common way to calculate whether you’re making enough from your customers to o set your CAC is to divide your LTV by your CAC. The higher the number, the better – or so it goes. However, OpenView has made a good case for calculating cumulative cohort revenue instead as the LTV/CAC formula assumes that customer churn rate is constant and that every user will eventually churn. Privacy Preference We use cookies on our website. Some of them are essential, while others help us to improve this website and your experience. RCR – Repeat Customer Rate The repeat customer Essential rate is also referred loyal Media customer rate (LCR) as Statisticsto as the External it indicates customer loyalty. It’s the percentage of all of your customers that Accept all a given period. This could be as has made a repeat purchase from you within simple as someone renewing (or not canceling) their monthly subscription. Save For SaaS, this is a better metric to track than repeat purchase rate (RPR) which Individual Privacy Preferences is more commonly used in eCommerce to indicate the percentage of customers Cookie Details | Privacy Policy | Imprint that come back to the store for a new purchase once they’ve already bought something from that store in the past. MAU – Monthly Active Users Getting people to sign up is one thing, having them actively use your product is still another. Don’t we all have subscriptions to things we haven’t looked at in months? Happy customers are active customers. They use and choose to continue to use your product. Dixon Jones, CEO and founder of Inlinks.net recommends to “look at the number of “paying” and “monthly active” users (which includes free users) but looking at “registered users” is not a good metric. That’s like looking at a pile of dead batteries to measure how much energy you’ve put in.” – from our article on SaaS Metrics. NPS – Net Promoter Score Net promoter score is calculated by pro-actively asking your customers to tell you, on a scale of 1 to 10, how likely they are to recommend your product. While it can be a good indicator of customer (dis)satisfaction, it’s important to note that someone who says they’d recommend you won’t actually do so, and someone who is one of your biggest advocates might not take the time to fill in a survey. Factors That Influence Customer Retention Pricing structure. Privacy Preference User-friendliness. We use cookies on our website. Some of them are Quality of your product. essential, while others help us to improve this website and your experience. Quality of your customer support. Essential Statistics Whether or not you have a loyalty program. External Media Whether or not your cart system saves Accept allpayment details. Your reputation in comparison to that of your competitors. Save Keeping Track Individual Privacy Preferences Cookie Details | Privacy Policy | Imprint Tracking the customer retention metrics in this post will help you quickly see whether you’re losing customers you could be keeping. Combine them with our list of factors that influence customer retention to figure out where you can make improvements. Want to know what else to track to grow your SaaS in a profitable yet sustainable way? Check out our guide on SaaS metrics. You may also like: Saas Terminology: 23 Saas Terms You Can’t Run Your Business Without On The Importance Of Your Saas Revenue Growth Rate Flow SEO 2020 Highlights Saas Metrics: How To Track Your Way To Privacy Preference Success We use cookies on our website. Some of them are essential, while others help us to improve this website and your experience. Essential Statistics External Media Author: Sofie Couwenbergh Accept all Sofie is an SEO-savvy content strategist, consultant, and writer. She helps brands generate more leads and keep customers engaged through clear, no-flu website copy and in-depth articles like the one you’ve just read. View all posts by Sofie Couwenbergh Save Individual Privacy Preferences Revenue Saas Terminology: 23 Saas Terms You Can’t  On The Importance Of Your Saas Cookie Details | Privacy Policy | Imprint Growth Rate Run Your Business Without  FLOW SEO. Flow SEO is a boutique SEO agency catering to digital businesses such as so ware, eCommerce or eLearning. Our team of SEOs, writers and technical experts o ers in-depth SEO analysis, custom SEO strategies and e ective implementation. Add Viola Eva on LinkedIn. RECENT BLOG POSTS Saas Terminology: 23 Saas Terms You Can’t Run Your Business Without  MAY 20, 2021 The Most Important Customer Retention Metrics – And How To Influence Them  MAY 20, 2021 On The Importance Of Your Saas Revenue Growth Rate  MAY 17, 2021 LEARN MORE Contact Team Talks + Workshops Resources Newsletter Privacy Preference We use cookies on our website. Some of them are essential, while others help us to improve this website and your experience. Sitemap * Disclaimer and privacy settings (Impressum und Datenschutz) Essential Statistics External Media Accept all Save Individual Privacy Preferences Cookie Details | Privacy Policy | Imprint