This article provides 5 key metrics to measure customer loyalty and retention.
1️⃣ Customer Churn. Measure the number of customers or subscribers who stopped using your service in a given period. By understanding why customers leave, when they leave, and how they leave, you’re able to optimize the customer experience for the ones that are still subscribers, so they don’t churn.
2️⃣ MRR Churn. It shows you how much revenue was lost and the overall impact. The lower the MRR churn, the faster the growth.
3️⃣ Customer Lifetime Value (LTV). It is an estimate of the amount a customer will spend on your service throughout their lifetime as a paying customer. This metric shows the value of every customer and the revenue you can generate if customers are retained and continue to pay.
4️⃣ Customer Acquisition Cost (CAC). It refers to the resources and costs that are needed to acquire a new customer. When you analyze CAC alongside other metrics such as customer lifetime value, you’re able to evaluate the scalability and profitability of your SaaS company.
5️⃣ Net Promoter Score (NPS). It measures the general satisfaction of your customers and their willingness to refer your product or service to others. When analyzed alongside revenue growth rate and customer churn rate, you can predict possible growth from retention and referrals.