SaaS focused on Referrals?
Must have 3 Acquisition metrics to monitor
WHAT is Acquisition metrics?
If you ask me personally, then Acquisition metrics = Success metrics. Its why you have your SaaS for the first place.
A marketeer would answer it with a segmented sentence, complicating it further. Acquisition is the total of three distinct stages: lead generation, lead nurturing, and sales.
Whatever is your Success, and whatever you call it (Growth, Performance, Results) its tied to your specific niche. If your SaaS is all about promoting YOUR app, then your Acquisition is all about those who want to purchase YOUR apps (or at least consider).
You need a clearly defined acquisition strategy to bring the right "interested people" in to your SaaS to convert them. But how do you set up and then evolve you acquisition strategy? The answer lies in your tracked acquisition metrics. By tracking these metrics, you monitor your business and make data-driven decisions for your growth. And never forget: "What gets measured gets managed!".
Figure out fast and early whether or not you’re FOCUSING the real HUMANS. Buying digital fluff (leads, clicks, follows, visits, downloads, subscribers or whatnot's) mostly makes reporting beautiful and bank account empty. Then optimize the acquisition costs (make it cheaper or get more for the same cost). Expand that knowledge into further campaigns. Optimize again, over a specific time frame, and you'll have a more effectively budget.
WHY monitor Acquisition metrics?
Acquisition Metrics are KPIs, and KPIs are Important for your SaaS. Said one voice, in a whimsical tone.
Acquisition metrics and KPIs help SaaS businesses to gain an in-depth understanding of how their marketing efforts are contributing towards goal achievement. Customer acquisition metrics are important because they provide tangible insights into the effectiveness of your marketing and sales efforts.
These Acquisition metrics allow you to track the cost of each customer, understand the value they bring to your SaaS business, and measure the success of your conversion strategies. With this information, you can make data-driven decisions to optimize your acquisition process, allocate resources wisely, and maximize your return on investment.
Monitor ONLY 3 Acquisition metrics?
3 is just a personal recommendation. Not small enough to get ignored, yet big enough to get noticed, even if you glimpse over them.
Set up Acquisition notification via important channels like email, sms, alerts, notifications that work for your SaaS. Not all the time will this be perfect, but should be important enough to not get forgotten. Make sure these Acquisition alerts are scheduled on a day/hour when intervention is possible. Friday, late afternoon is translated to either Monday late afternoon, or ignored and skipped.
Frequency? Depends.
If this makes or breaks your budget THIS month, then monitor this weekly.
If this makes or breaks your Q1-Q2-Q3-Q4, them monitor this monthly.
If this is a subject for a meeting, then schedule this BEFORE that said meeting.
In all cases, should consider MOM (month over month) and YOY (year over year) monitoring. Helps understanding where you're heading, at what expected point (logical and educated deduction).
SaaS focused on Referrals? Start monitoring your Acquisition metrics today!
SaaS focused on Referrals?
Must have 3 Acquisition metrics to monitor
#1 - Referral Rate
Referral Rate for an SaaS application focused on Referrals, refers to the percentage of new customers acquired through referrals from existing customers.
Why track Referral Rate? The referral rate indicates how effectively promote your current users your brand. Monitoring the referral rate helps you understand the effectiveness of your referral program and the willingness of your customers to advocate for your brand. A higher referral rate often correlates with increasing customer satisfaction and loyalty.
How to calculate Referral Rate? Divide the number of new customers acquired through referrals, by the total number of new customers during that specific period, then multiply by 100, to get your percentage.
How to improve Referral Rate? Enhance your referral program with incentives for both the referrer and the referred, ensuring that your product delivers excellent value to encourage more users to promote it.
SaaS focused on Referrals? Start monitoring Referral Rate metrics today!
#2 - Customer Referral Value
Customer Referral Value for an SaaS application focused on Referrals, refers of the average revenue generated from customers acquired through referrals. Customer Referral Value (also known as CRV) helps define the financial impact of referral-driven acquisition.
Why track Customer Referral Value? Understanding CRV defines budgeting for referral incentives. CRV assess the effectiveness of your referral program, not just in terms of quantity of new customers, but also their value to your business.
How to calculate Customer Referral Value? Calculate your Customer Referral Value by counting the total revenue generated from referred customers, over a specific period, and divide it by the number of referred customers, acquired in that same period.
How to improve Customer Referral Value? Enhance the onboarding experience for referred customers, ensuring they are well-supported (like an employee), which can lead to higher engagement and up-sell opportunities.
SaaS focused on Referrals? Start monitoring Customer Referral Value metrics today!
#3 - Conversion Rate from Referrals
Conversion Rate from Referrals for an SaaS application focused on Referrals, represents the percentage of referred leads that convert into paying customers, highlighting the effectiveness of referrals in driving qualified prospects.
Why track Conversion Rate from Referrals? A high Conversion Rate from Referrals suggests that referred leads are more likely to trust your brand and convert, which indicates strong customer advocacy and satisfaction.
How to calculate Conversion Rate from Referrals? Calculate by dividing the number of conversions (upgrades, sign-ups) from referred leads by the total number of referred leads, then multiply by 100, to get your percentage.
How to improve Conversion Rate from Referrals? Focus on enhancing your referral program, that communicates clear benefits, provides personalized follow-ups for referred leads, and maintains consistent engagement with existing customers to keep them motivated to refer others.
SaaS focused on Referrals? Start monitoring Conversion Rate from Referrals metrics today!
