Metrics that Matter: “S” is for Sustain
In the competitive landscape of SaaS businesses, the ability to sustain and nurture existing customer relationships is a critical determinant of long-term success. The third component of the LASER model, Sustain, focuses on this very aspect. It's not just about maintaining the status quo but about enhancing customer value, driving product adoption, and fostering customer loyalty.
Sustain is where the rubber meets the road in terms of delivering on the promise made to the customer during the acquisition phase. It's about ensuring that the customer is deriving the expected value from the product, which in turn drives customer satisfaction and loyalty. In a SaaS business, the general rule of thumb is that a customer should be getting at least 10x quantifiable dollar value on fees paid for the solution.
To ensure that we are delivering this value, we need to track a set of key performance indicators (KPIs) that give us a clear picture of how well we are doing in terms of sustaining our customer relationships. These metrics help us understand product adoption, customer engagement, and overall customer health.
Here is a comprehensive list of the key metrics that matter for Sustain:
As recommended in the previous Acquire section, build a “Red Flag Dashboard” highlighting specific KPIs which would immediately send up a red flag if triggered, which should then drive a series of quick actions to drive course correction. For example, if a customer's usage of the product drops significantly over a specified period, the probability of that customer churning will increase drastically. A Red Flag Dashboard should immediately catch this drop in usage, and the customer success management and representative should drive a series of actions to re-engage the customer and prevent churn.
By tracking these metrics and taking action based on the insights gained, businesses can improve their customer sustain efforts and drive sustainable growth. For example, if the customer churn rate is high, it may be necessary to improve the customer experience or address product issues. Similarly, if the customer engagement score is low, it may be necessary to refine the customer success strategy or improve the product's user experience.Sustaining customer relationships is a critical aspect of business growth. By effectively maintaining and nurturing your existing customers, you can increase customer loyalty, reduce churn, and ultimately drive revenue.#SustainMetrics #CustomerSuccess #CustomerRetention #RevenueOptimization #LASERRemember, the metrics you choose to track might vary based on your specific business model and goals. However, these metrics provide a good starting point for any business looking to improve their ‘customer sustain’ efforts. By regularly tracking and analyzing these metrics, you can gain valuable insights into your customer base, identify areas for improvement, and make data-driven decisions to optimize your sustain strategies.
In the end, the goal of sustain is not just about keeping your customers but about turning them into advocates for your brand. A satisfied customer not only continues to buy from you but also refers others to your business, effectively becoming a driver of new customer acquisition. Therefore, investing in sustain is not just about maintaining your existing revenue but also about fueling your future growth.
In the next article, we will move on to the next component of the LASER model - Expand.
Metrics that Matter: “S” is for Sustain
In the competitive landscape of SaaS businesses, the ability to sustain and nurture existing customer relationships is a critical determinant of long-term success. The third component of the LASER model, Sustain, focuses on this very aspect. It's not just about maintaining the status quo but about enhancing customer value, driving product adoption, and fostering customer loyalty.
Sustain is where the rubber meets the road in terms of delivering on the promise made to the customer during the acquisition phase. It's about ensuring that the customer is deriving the expected value from the product, which in turn drives customer satisfaction and loyalty. In a SaaS business, the general rule of thumb is that a customer should be getting at least 10x quantifiable dollar value on fees paid for the solution.
To ensure that we are delivering this value, we need to track a set of key performance indicators (KPIs) that give us a clear picture of how well we are doing in terms of sustaining our customer relationships. These metrics help us understand product adoption, customer engagement, and overall customer health.
Here is a comprehensive list of the key metrics that matter for Sustain:
One key recommendation is to build a “Red Flag Dashboard” highlighting specific KPIs which would immediately send up a red flag if triggered, which should drive a series of quick actions. For example, in a company where a SaaS product sells for $100K annually, if a deal is stuck in a demo stage for over 45 days, the probability of that deal closing will drop drastically. A Red Flag Dashboard should immediately catch this deal at Day 30, and the sales management and AE should drive a series of actions to drive acceleration in that deal or downgrade the stage of the deal to show better deal forecasting accuracy.
By tracking the above metrics and taking action based on the insights gained, businesses can improve their customer acquisition efforts and drive sustainable growth. For example, if the conversion rate is low, it may be necessary to optimize the sales process or improve the quality of leads. Similarly, if the customer acquisition cost is high, it may be necessary to refine the marketing strategy or improve the efficiency of the sales team.
Acquisition of customers is a critical aspect of business growth. By effectively converting potential customers into actual customers, you can increase your customer base, build relationships, and ultimately drive revenue.
#AcquisitionMetrics #SalesPerformance #CustomerGrowth #RevenueOptimization #LASER
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