๐Ÿ”† Influencing Unit Metrics – Selling is one thing, retention, and expansion anotherโ€ฆ

๐Ÿ”† Influencing Unit Metrics – Selling is one thing, retention, and expansion anotherโ€ฆ

A critical component to escape the vicious cycle of desperately chasing SaaS funding is to have high confidence in a straightforward question:

“๐˜Š๐˜ข๐˜ฏ ๐˜ธ๐˜ฆ ๐˜ฎ๐˜ข๐˜ฌ๐˜ฆ ๐˜ฎ๐˜ฐ๐˜ณ๐˜ฆ ๐˜ฑ๐˜ณ๐˜ฐ๐˜ง๐˜ช๐˜ต ๐˜ง๐˜ณ๐˜ฐ๐˜ฎ ๐˜ฐ๐˜ถ๐˜ณ ๐˜ค๐˜ถ๐˜ด๐˜ต๐˜ฐ๐˜ฎ๐˜ฆ๐˜ณ๐˜ด ๐˜ต๐˜ฉ๐˜ข๐˜ฏ ๐˜ช๐˜ต ๐˜ค๐˜ฐ๐˜ด๐˜ต๐˜ด ๐˜ถ๐˜ด ๐˜ต๐˜ฐ ๐˜ข๐˜ค๐˜ฒ๐˜ถ๐˜ช๐˜ณ๐˜ฆ ๐˜ต๐˜ฉ๐˜ฆ๐˜ฎ?

How will you know?

It’s where Unit Metrics come in, and specifically, these 2:

  • LTV โ€“ the Lifetime Value of a typical customer
  • CAC โ€“ the Cost to Acquire a typical Customer

A quote from last week’s CEO Mastermind gives some valuable context about the importance of Unit Metrics:

“๐˜ ๐˜ต๐˜ฉ๐˜ช๐˜ฏ๐˜ฌ ๐˜ข๐˜ฃ๐˜ฐ๐˜ถ๐˜ต ๐˜ถ๐˜ฏ๐˜ช๐˜ต ๐˜ฆ๐˜ค๐˜ฐ๐˜ฏ๐˜ฐ๐˜ฎ๐˜ช๐˜ค๐˜ด ๐˜ช๐˜ฏ ๐˜ต๐˜ธ๐˜ฐ ๐˜ธ๐˜ข๐˜บ๐˜ด. ๐˜›๐˜ฉ๐˜ฆ ๐˜ด๐˜ต๐˜ข๐˜ณ๐˜ต๐˜ช๐˜ฏ๐˜จ ๐˜ฑ๐˜ฐ๐˜ช๐˜ฏ๐˜ต ๐˜ช๐˜ด ๐˜ท๐˜ข๐˜ญ๐˜ถ๐˜ฆ. ๐˜ž๐˜ฉ๐˜ข๐˜ต ๐˜ช๐˜ด ๐˜ต๐˜ฉ๐˜ฆ ๐˜ท๐˜ข๐˜ญ๐˜ถ๐˜ฆ ๐˜บ๐˜ฐ๐˜ถ’๐˜ณ๐˜ฆ ๐˜จ๐˜ฐ๐˜ช๐˜ฏ๐˜จ ๐˜ต๐˜ฐ ๐˜ค๐˜ณ๐˜ฆ๐˜ข๐˜ต๐˜ฆ ๐˜ง๐˜ฐ๐˜ณ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ค๐˜ถ๐˜ด๐˜ต๐˜ฐ๐˜ฎ๐˜ฆ๐˜ณ? ๐˜๐˜ฐ๐˜ธ ๐˜ฎ๐˜ถ๐˜ค๐˜ฉ ๐˜ช๐˜ด ๐˜ช๐˜ต ๐˜ธ๐˜ฐ๐˜ณ๐˜ต๐˜ฉ ๐˜ต๐˜ฐ ๐˜ต๐˜ฉ๐˜ฆ๐˜ฎ? ๐˜›๐˜ฉ๐˜ข๐˜ต’๐˜ด ๐˜จ๐˜ฐ๐˜ช๐˜ฏ๐˜จ ๐˜ต๐˜ฐ ๐˜ด๐˜ฆ๐˜ต ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฃ๐˜ข๐˜ณ ๐˜ช๐˜ฏ ๐˜ต๐˜ฆ๐˜ณ๐˜ฎ๐˜ด ๐˜ฐ๐˜ง ๐˜ฉ๐˜ฐ๐˜ธ ๐˜บ๐˜ฐ๐˜ถ ๐˜ฆ๐˜ด๐˜ต๐˜ข๐˜ฃ๐˜ญ๐˜ช๐˜ด๐˜ฉ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฑ๐˜ณ๐˜ช๐˜ค๐˜ฆ.

๐˜ˆ๐˜ฏ๐˜ฅ ๐˜ต๐˜ฉ๐˜ฆ๐˜ฏ ๐˜ต๐˜ฉ๐˜ฆ ๐˜ฃ๐˜ข๐˜ค๐˜ฌ๐˜ด๐˜ช๐˜ฅ๐˜ฆ ๐˜ฐ๐˜ง ๐˜ต๐˜ฉ๐˜ข๐˜ต ๐˜ช๐˜ด, ๐˜ธ๐˜ฉ๐˜ข๐˜ต ๐˜ธ๐˜ช๐˜ญ๐˜ญ ๐˜ช๐˜ต ๐˜ค๐˜ฐ๐˜ด๐˜ต ๐˜บ๐˜ฐ๐˜ถ ๐˜ต๐˜ฐ ๐˜ฅ๐˜ฆ๐˜ญ๐˜ช๐˜ท๐˜ฆ๐˜ณ ๐˜ต๐˜ฉ๐˜ข๐˜ต? ๐˜๐˜ง ๐˜ช๐˜ต ๐˜ค๐˜ฐ๐˜ด๐˜ต๐˜ด ๐˜ถ๐˜ด 500 ๐˜ฃ๐˜ถ๐˜ค๐˜ฌ๐˜ด ๐˜ต๐˜ฐ ๐˜ญ๐˜ข๐˜ฏ๐˜ฅ ๐˜ข ๐˜ฏ๐˜ฆ๐˜ธ ๐˜ถ๐˜ด๐˜ฆ๐˜ณ ๐˜ง๐˜ฐ๐˜ณ ๐˜ข $150 ๐˜ด๐˜ถ๐˜ฃ๐˜ด๐˜ค๐˜ณ๐˜ช๐˜ฑ๐˜ต๐˜ช๐˜ฐ๐˜ฏ ๐˜ช๐˜ฏ ๐˜ข ๐˜ฏ๐˜ฆ๐˜ธ ๐˜ค๐˜ฐ๐˜ฎ๐˜ฑ๐˜ข๐˜ฏ๐˜บ, ๐˜ธ๐˜ฆ ๐˜ฃ๐˜ฆ๐˜ต๐˜ต๐˜ฆ๐˜ณ ๐˜ฉ๐˜ข๐˜ท๐˜ฆ ๐˜ข ๐˜ณ๐˜ฆ๐˜ฏ๐˜ฆ๐˜ธ๐˜ข๐˜ญ ๐˜ณ๐˜ข๐˜ต๐˜ฆ ๐˜ฐ๐˜ง 90 ๐˜ฑ๐˜ญ๐˜ถ๐˜ด ๐˜ฑ๐˜ฆ๐˜ณ๐˜ค๐˜ฆ๐˜ฏ๐˜ต, ๐˜ข๐˜ฏ๐˜ฅ ๐˜ธ๐˜ฆ ๐˜ฏ๐˜ฆ๐˜ฆ๐˜ฅ ๐˜ต๐˜ฐ ๐˜ฉ๐˜ข๐˜ท๐˜ฆ ๐˜ข๐˜ฏ ๐˜ฆ๐˜น๐˜ฑ๐˜ข๐˜ฏ๐˜ด๐˜ช๐˜ฐ๐˜ฏ ๐˜ณ๐˜ข๐˜ต๐˜ฆ ๐˜ต๐˜ฉ๐˜ข๐˜ต ๐˜ธ๐˜ช๐˜ญ๐˜ญ ๐˜จ๐˜ณ๐˜ฐ๐˜ธ ๐˜ต๐˜ฉ๐˜ฐ๐˜ด๐˜ฆ ๐˜ด๐˜ฆ๐˜ข๐˜ต๐˜ด ๐˜ต๐˜ฐ ๐˜ฑ๐˜ข๐˜บ ๐˜ฐ๐˜ง๐˜ง.

Here’s the thing

I spot many B2B SaaS entrepreneurs are over-optimistic about how much it costs to acquire a customer.

There’s a strong belief customers will be so excited about what they have built that they will pull it out of their hands. But unfortunately, that reality is often very different…

Question for you to reflect upon

What’s your current sales cycle telling you about the % of hard-gained customers who will happily renew and expand? What does that tell you?


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