3 SaaS KPIs
The three SaaS KPIs Churn, ARPU, and CAC are relatively straightforward to optimize by themselves. Doing them in parallel is a struggle for most SaaS Marketing teams.
To grow ARR fast, ARPU (Annual Revenue Per User) has to improve while you get Customer Churn under control, and you get CAC (Customer Acquisition Cost) as low as possible.
Here are the core activities for each SaaS KPI that you should hold your Marketing Team accountable for:
1. Grow ARP
- Implement Product Marketing (the 4 P's) to optimize Price, Positioning, Place, and Promotions
- Customer success teams who drive up-sell and service consumption
2. Reduce Churn
- Drive fast onboarding with your customer success team
- Continually drive product improvement based on customer feedback
- Implement a solid Net-Promoter-Score feedback loop (NPS)
3. CAC Optimization
Optimal CAC is not always the lowest CAC. Optimal CAC gets the fastest return of your money through MRR growth. If your CAC is 10% higher but gets you a customer, who spends 30% more (ARPU), that's great.
- Channel optimization across Search Engine Marketing, Content Marketing, Social Media Outreach, Events, Influencers Campaigns, and email marketing.
- Conversion optimization - Make every lead count.
- Consider affiliate marketing programs. Create leverage with your leads.
- Create a referral program - Allow your customers to refer others, especially right after they are excited about what they just bought.
Optimizing your SaaS conversion funnel while hitting the above 3 KPI categories is going to help you drive ARR growth at an exponential rate and look good for your investors.