Measuring Success Across the Customer Lifecycle: Key Metrics
Most modern customer education programs are centered around onboarding. This is a mistake. The customer lifecycle doesn’t begin at the final point of sale, so why should customer education start there?
The answer is that it shouldn’t. Customer education should span every single stage of the customer journey, from initial contact through to retention. Engaging, hands-on product demos and training environments are important cornerstones of this approach, but neither can operate effectively without the most important pillar of all — data.
Why Customer Lifecycle Metrics Matter
To truly conquer the SaaS customer lifecycle, you need to start by focusing on the right metrics. These data points are everything. In addition to providing your organization with key insights into how customers interact with your company (and why), they can also help you in a multitude of other ways:
- Identifying pain points and bottlenecks in the customer lifecycle journey.
- Developing accurate revenue forecasts to help guide spending and budgeting.
- Identifying which marketing channels have the highest rate of success.
- Determining the overall return on investment of your customer lifecycle management efforts.
- Uncover opportunities for improvement in how your organization manages its customers.
- Improve your retention efforts and reduce churn.
15 Key Customer Lifecycle Metrics Every Business Should Track
Because the customer lifecycle’s stages span from sales through to retention, it should come as little surprise that there is an incredibly diverse selection of metrics on which your company can potentially focus. While certain metrics will be more or less valuable depending on your organization — and moreover, on what stage of the customer journey you’re assessing at a given time — the following are broadly applicable across multiple SaaS niches:
- Time to First Value. Measures how long a customer must use your product before it addresses their pain point and generates a positive return on investment.
- Customer Acquisition Cost (CAC). How much it costs your company to attract and onboard a new customer. Includes all sales, marketing, and onboarding efforts and expenses.
- Customer Lifetime Value (CLV). The estimated total revenue a customer will generate for your company.
- Customer Retention Rate. How many customers remain customers over a given timeframe. Typically expressed as a percentage, and directly opposed to churn rate.
- Churn Rate. There are actually two distinct types of churn. The first measures how many customers canceled their subscriptions over a given timeframe. The second measures the revenue loss that occurs as a result of those lost subscriptions.
- Activation Rate. The number of customers who complete your organization’s onboarding or registration process after making a purchase, expressed as a percentage of total registrations/sales.
- Referral Rate. The percentage of customers, both past and current, that successfully recommend your product to a friend or colleague. More than a metric, this is functionally another pipeline for customer acquisition.
- Net Promoter Score (NPS). Measures customer satisfaction, collected via a microsurvey that asks customers how likely they are to recommend your product to a colleague. Expressed as a number from one to ten, with ten being the best and one being the worst.
- Average Revenue Per User (ARPU). The amount of revenue your company typically generates from each individual subscriber.
- Monthly Recurring Revenue (MRR). Exactly what’s written on the tin — the revenue gained per month from paid subscriptions.
- Product Usage. Less an individual metric than a full category, product usage metrics measure how customers engage with both your proof of concept demos and your commercial software, allowing you to identify potential performance and usability issues in the process. Includes, but not limited to:
- Time to first primary action.
- Time spent on each key feature.
- Product adoption rate.
- Time spent idle.
- Number of helpdesk requests.
- User actions per session.
- Daily active users, monthly active users, and overall product stickiness.
- Online Sentiment. How customers feel about your company and brand on social networks and review communities.
- Upsell Rate/Cross-Sell Rate. How many existing customers purchase additional subscriptions, products, or services from your company after their initial purchase.
- Revenue from New Users. What percentage of your current monthly recurring revenue comes from new users versus existing subscribers.
- Customer Success Metrics. Another interconnected category, customer success metrics allow you to assess how well your organization supports customers both during and after onboarding, including both response time and success rate for customer support.
How to Optimize Your SaaS Business Strategy With Customer Lifecycle Metrics
Data is the bedrock of your organization’s SaaS business strategy. Without visibility into your customer journey, sales funnel, onboarding experience, and customer success efforts, you have no way of knowing where to direct your resources and attention. You’re essentially flying blind, fumbling in the dark and hoping that you eventually hit on something effective.
Yet even the right metrics can prove ineffective if they aren’t managed properly. To that end, you’ll want to divide your efforts and focus across four core umbrellas:
See How You Can Master Customer Lifecycle Management Through More Effective Education
By now, you’ve taken the first steps towards a more effective customer lifecycle management strategy. You know the metrics you need to track and the reason you need to track them. You have some idea of how each set of metrics fits into the overall customer journey.
There’s just one problem, though — you still have no idea how to align your customer education program with your customer lifecycle. You’ve got all this data, but you still aren’t quite sure what to do with it. That’s where we come in.
Jointly hosted by CloudShare and training industry veteran Brian Childs, our on-demand webinar Measuring Success: Create Effective Customer Education Across the Entire Lifecycle shows you exactly what you need to do in order to measure success with training — and exactly how you can leverage the data gathered from the metrics we discussed in this blog post.
You’ll also learn:
- The benefits of applying customer training to the entire customer lifecycle.
- How to align training programs and core KPIs.
- What constitutes a “customer-centric” approach to training, and how your organization can embrace one.
- Which business units gain the most benefit from customer-centric training programs and why.
Register now and let us show you how to truly evolve your customer training.