Why Tracking The Right SaaS KPIs Will Help You Scale More Quickly

 

 

SaaS KPIs are one of the most important things to monitor when transitioning from a product idea to building an early-stage startup. Not only is it important to track basic marketing metrics and the Key Process Indicators (KPIs); but you need to make sure investor capital is protected!

KPIs for early-stage startups are often neglected by founders who focus on product development and team building.

Typically, an early-stage startup has created a minimum viable product and is actively seeking seed funding to successfully enter the growth stage. Failure in finding investors will most probably mean the death of the startup. But to get access to funding, venture capitals (VCs) or private investors will want to see hard data and analyses that show proven growth potential.

The analytics challenge in SaaS KPIs

At the same time, marketing analytics for an early-stage startup is a major challenge. That is, firstly, because startups are not likely to have a budget for expensive analytics software. Secondly, and most importantly, a SaaS KPIs startup doesn't typically have a large customer base or a variety of advertising campaigns to compile a set of meaningful metrics. In other words, there's not enough data to track because the product is still in a beta or testing phase.

In the case of early-stage startups, SaaS KPIs, website analytics, and in-app analytics are of utmost importance and difficult to track at the same time. Before discussing the best way to tackle this issue, let's briefly see what exactly is important to seed and early-stage start-ups.

Seed and early-stage investments

Early-stage SaaS KPIs startups or seed tech startups are typically exploring funding opportunities to invest in product development, infrastructure, customer acquisition strategies, and building a team. Early-stage companies have few users testing a beta product while fine-tuning their product, and also working on their go-to-market strategy and devising an outbound strategy.

An early-stage startup is usually focused on customer acquisition and actively seeking customer feedback and its first outside investors through angel investors or VCs.

In most cases, a startup won't be profitable until they expand their customer base. Some SaaS KPIs might hinge around trying to reach breakeven cash flow.

Why startup metrics matter

First and foremost, startups need to set goals, and metrics can be seen as business goals. Without pre-defined KPIs, it would be impossible to set SMART (Specific, Measurable, Achievable, Relevant, Time-limited) goals and measure the progress. KPIs are needed so that the management team can track progress and motivated the early-stage development team.

Data also helps founders make smart, informed decisions about their new business. Even with a small customer base, they might be able to identify patterns, problem areas, and achievements, and strategize on potential next steps.

Of course, tracking SaaS KPIs, website analytics, and marketing data is also important when startups are talking with a VC or angel investor. Investors will typically want to see indicators of product validation. Specifically, they will require proof that the go-to-market strategy works and that the company has a solid monetization strategy in place.

In reality, the only thing that makes a great idea is the numbers. If a startup founder is not able to get to the point where they acquire paying customers, the idea will die. As they say, an idea is only as good as its execution. So an early-stage startup should be able to demonstrate specific growth and success metrics.

It's important to understand why metrics matter. Without data and analysis, a founder won't know how far they have progressed and won’t know when the startup is ready two scales or is in trouble.

Oftentimes, decisions are made based on entrepreneur intuition but there is nothing more solid than metrics, especially when a third-party will be involved as a funding source.

Marketing metrics and analytics for early-stage SaaS startups

Let's assume your startup follows the freemium model (I know - not a GREAT way to monetize in terms of SaaS KPIs).

Freemium is a pricing strategy by which a SaaS KPIs product has a basic free tier and then it also provides premium paid plans for users to get access to additional features.

In this case, a lead refers to free signup while a customer is anyone who converts to a paid plan.

It's worth to mention that there are three keys to success in SaaS:

1. Acquiring Leads
2. Converting Leads into Customers
3. Monetizing Customers

Here are the most important metrics KPIs for early-stage startups you need to track consistently.

Free download: Excel Template with KPIs for early-stage startups - SaaS Metrics 2.0 Dashboard

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A. Growth metrics to track for early-stage startups

Monthly unique visitors

Monthly unique visitors is an important one for SaaS KPIs. It's the number of different users visiting your website each month. If a single person is visiting the site multiple times within a given time, they will be considered as one unique visitor. That is of course as long as they use the same browser for the visits and do not clear the browser cookies. Use this metric along with the source of traffic, to know more about how effective you paid or SEO campaigns are. Monthly unique visitors is a good reflection of the size of the audience and is a good measure of your brand reach.

Use tools like Google Analytics to estimate monthly unique visitors.

Monthly new leads

This metric also referred to as lead acquisition rate, shows how many new leads or free signups a SaaS KPIs company acquires per month. It makes sense to track the sources of leads, whether they're through paid channels or word of mouth and SEO.

Not every SaaS KPIs business offers a free trial or a self-service option. Many established companies require you to schedule a demo with a sales rep before getting access to the software. But, self-service user signup and activation is perhaps the best way to lower the cost of acquiring a customer and increase the lead acquisition rate for a small SaaS startup.

For self-service SaaS companies in their early stage, the number of signups per month is probably the most important growth metric, since they're still building up their user base. Some times, CEO's are interested in acquiring as many leads as possible before even finding an optimized formula to convert those people into paid users.

Google Analytics can help you with calculating some of the SaaS KPI's such as new leads and comparing data to the previous month.

Customer acquisition rate

Whether you are offering a free trial or a free pricing plan, your ultimate goal should be to convert free users into paying customers. It is a misconception that a high number of trial users will eventually generate considerable revenues.

SaaS startups need to put a well-thought onboarding and lead nurturing plan into action if they want to be able to boast when in meetings with VCs.

Similar to lead acquisition rate, the customer acquisition rate is the number of new revenue-generating users over some time, normally a month.

Your billing or accounting platform will help you find the number of new customers and the revenue they generated every month.

Churn rate

Churn measures a drop in the customer base of a SaaS startup. Churn is all about how much the service has lost within a certain period, which might be longer than a month. It's one of the most meaningful indicators in forecasting business continuity. As a startup founder, you need to know if customers want to stick with your product or abandon it because they see no value.

So, keep a sharp eye on the customer churn rate and identify the reasons for it.

For most SaaS companies, 3% or lower churn is considered to be normal.

Now, in terms of revenue lost because of churn. As an early-stage startup that is focused on revenue growth, your goal should eventually be to earn more from new customers than lose from abandoning customers. In other words, you need to accomplish a negative revenue churn. Your biggest bet is to prevent paid users from unsubscribing while at the same time finding ways to retain existing customers if not sell more to them.

To calculate churn, you must use data from your accounting or billing and/or CRM software. Ideally, these platforms should be integrated, so that you can cross-check and pull data from either place.

Churn Rate = ( Users at Beginning of Period - Users at End of Period ) / Users at Beginning of Period

Average use per user per month

Average use per user per month is a KPI to measure the quality of your active users. This is an important ratio if you want to know how long users spend working with your app. It is a qualitative number that reveals how important your app is to their daily life. It doesn't explicitly measure qualitative data, like passion and frequency of use but it provides a good metric to highlight the relationship of the average user with your app.

If you manage to hook customers to your SaaS KPIs product and get them to revisit repeatedly, then your app becomes a habit and the users are more likely to continue using it and also talk to their peers about it.

Use built-in app functionality to measure this important metric for early-stage startups, and install Intercom if you want a more accurate portrayal of each user's journey and behavior.

B. Conversion KPIs for early-stage startups

Visitor-to-lead rate

In most cases and according to different marketers, the number of website visitors that become leads is very low. And we're talking about the conversion rate of the total number of website visitors, not a particular landing page. On average, more than 95 percent of new visitors will leave your website without signing up for your app or subscribing to your newsletter. Instead, very effective landing pages coupled with targeted inbound traffic can give a conversion ratio of as high as 60%.

How to calculate the visitor-to-lead rate. Take your total number of people that converted to leads (subscribers to the free plan and email leads) for any given month, divide it by the total number of unique visitors, and multiply the result by 100. For example, 500 leads in a month with 10,000 website visitors would result in a 5% visitor-to-lead rate.

If you still feel that something is wrong with your funnel, you may want to watch our three-part video course. In this free course, you will learn the 3 steps to fix your sales funnel and conversion rates, so you finally make more money out of your current traffic. Click here for instant access.

Lead-to-customer rate

Every SaaS KPIs startup in its early stages wants to convert free or trial users into paid customers. This number describes how many leads convert into paying customers per month. In other words, it shows whether your sales process and lead-nurturing methods are working or not. The lead-to-customer rate is about how fast you’re turning free subscribers into customers. Generating sales-ready leads is a challenge, and this metric shows you how good you're at it.

The lead-to-customer rate is pretty straightforward to calculate. Take the number of newly-acquired customers for any given month, divide it by the number of new leads, and multiply that number by 100, to get your percentage. For example, 15 customers in a month when you scored 500 new leads would result in a 3% lead-to-customer rate.

Use Google Analytics goals to track conversions and other paid tools which can come in handy, like Intercom.

C. Marketing and other basic KPIs for SaaS startups

Cost per lead

Cost per lead (CPL) is a number that shows you how much it costs your company to acquire a new user that is interested in your SaaS product. In other words, CPL is how much you need to spend on average to have a new lead subscribe to your newsletter or sign up for your free plan. When compared to the cost per click (CPC), CPL is more important as a KPI for decision making. CPL measures the true cost of a real business asset, which is a real person who engages with your business and decides to come aboard your app.

How to calculate cost per lead. CPL is calculated if you divide total ad spend by the number of new leads for a given time. While you can use the total ad spend over the total number of leads, it is best practice to attribute lead generation to an ad. So, CPL should be calculated separately for each channel, campaign.

CPL = Total Ad Spend / Total Attributed Leads

Customer acquisition cost

Customer acquisition cost (CAC) describes how much it costs your SaaS startup to acquire a new paid customer.

Calculating CAC is somewhat more complicated. Divide your total marketing spend (including personnel) by the total number of new users who purchased a plan within a period usually longer than a month. If you calculate CAC for a single month you might not take into account your sales cycle, which is typically longer than a month for a less-known SaaS product.

CAC = Total Cost of Sales & Marketing / Number of Deals Closed

For example, if you spent $80,000 over three months, and you added 400 new customers, your CAC would be $200.

When combined with customer lifetime value (CLV), this metric helps companies calculate ROI and prove that their business model is viable.

Monthly revenue and monthly recurring revenue

Revenue for early-stage SaaS companies is important but what's even more worth concentrating on is a recurring cash inflow. Monthly recurring revenue (MRR) is a simple but powerful metric that tracks the net value of renewals, a new subscription, and up-sells minus churns every month.

If you want to calculate the new monthly recurring revenue use this formula:

Net New MRR = New MRR + Expansion MRR – Churn MRR

MRR helps your early-stage SaaS KPIs startup predict its business future more accurately, thus MRR can gauge the value you bring to the table for a funding round.

The average revenue per account

The average revenue per account (ARPA) is a measure of the average revenue generated per user typically per month where more than one pricing tiers exist. It represents the average revenue per customer since a customer should be signed up for a single account.

A simple way to calculate ARPA is to divide the total MRR you have at the end of a month and divide it by the number of active customers at that time, like so:

ARPA = MRR / Total Number of Customers

A good practice is measuring ARPA for new and existing customers separately, to have a sense of how your ARPA is evolving or if new customers behave differently compared to existing ones.

D. Expenses

Monthly expenses

When it comes to expenses, one of the most significant tasks from a SaaS startup P& L perspective is the proper classification of costs. The two main categories of expenses are the costs of goods sold (COGS) and operating expenses. Both categories of expenses are important for analytics, benchmarking, and investor analyses.

For example, revenue minus COGS gives you a gross profit margin. This is one of the simplest but most powerful ratios that investors will look at when considering funding your early-stage SaaS startup.

From a managerial point of you, you need all in all to keep an eye on COGS and operating expenses that are usually high in tech startups, like staff wages, technology expenses, and marketing costs.

Cost of goods sold

COGS is the direct costs attributable to the production and delivery of the product.

In the case of a SaaS company, COGS will include any of the following: developer wages; hosting; cloud and database fees; support personnel and customer care costs; third-party fees that are directly attributable to product creation and delivery; and customer onboarding costs.

Operating expenses

On the flip side, operating expenses are those costs incurred by an organization through its day-to-day business operations. This category of expenses would include other staff salaries, rent, advertising, legal & professional fees, etc.

Your accountant will be able to help you with the appropriate cost structure for your early-stage SaaS startup to comply with the law and, at the same time, be able to reach conclusions from a managerial perspective.

Free download: SaaS Financial Model - Simple Template For Early-Stage Startups

E. Other marketing metrics that matter

Traffic per channel and campaign

You already know the importance of consistent streams of traffic to your site. Unique visitors and traffic sources (per channel and campaign) are also really important SaaS KPIs. And they should already be visible in your Google Analytics account; however, as a SaaS startup, it’s important to dive deeper into your traffic analytics.

Most SaaS websites have a way for users to log in. The log-in link is usually in the top navigation bar. As the users of your cloud-based software increase, you will get a lot of repeat visitors to your homepage. These users come back to find the log-in link. This can yield false traffic data.

An artificial increase in your overall traffic might be misinterpreted as business growth due to marketing campaigns. You need to tackle this issue with the help of a Google Analytics expert.

Customer lifetime value

Customer lifetime value (CLV) is one of the most important SaaS KPIs! It's the average amount of income each customer will generate for your business. It is wrong to associate the value of each user with a month's value of the plan they purchased. Also, it's wrong to calculate the ROI of your marketing efforts based on a customer's first purchase. Instead, what you need to do is take into account the sum of revenue that you have on average from the lifetime of a customer.

Here's how to calculate CLV.

CLV = ( 1 / Churn Rate ) x ARPA

First, calculate your customer lifetime rate by dividing the number 1 by your customer churn rate. For instance, if your monthly churn rate is 2%, your customer lifetime rate would be 1 / 0.02 = 50.

Then, you need to figure your average revenue per user (ARPA) by dividing the total revenue by the total number of paid users. If your revenue was $50,000, divide it by 100 customers and your ARPA would be $50,000 / 100 = $500.

Finally, find the lifetime value of your customer by multiplying the customer lifetime rate x ARPA. In this example, your SaaS company CLV would be $500 x 50 = $25,000.

This value translates into the expected revenue from a single customer for the lifetime of your relationship. It is what every user is worth. It is an important piece of data that you'd want to display to funding parties.

Brand reach

Turning to pure marketing ratios, brands, or market reach is very important to a tech startup. In its simplest form, brand reach is the estimated size of the audience you reach through your marketing campaigns over some time, usually a month.

Market reach allows tech startups to determine whether the cost of a marketing campaign is worth the revenue that could potentially be brought in by new customers.

To measure this metric, you would usually look at the total number of people who visited your site (monthly unique visitors), saw your Facebook or Google Ads, opened your email, and so on. Observe the number as it grows month after month to make sense out of this SaaS metric over a longer period.

Sales cycle

For most SaaS products, the sales cycle will depend on the type of product you’re selling, the reputation of the product, and the price tag.

An early-stage startup usually struggles to create buzz around their name so that they make it easier for people to make a purchase decision.

Even if you have a long sales cycle, it's important to track how it changes over time, so you can always improve. Either you have salespeople who pick up the phone, or you have an automated sales sequence in place, focus on effective onboarding, and nurturing the leads in your funnel, to shorten the sales cycle.

And remember: Acquiring a new customer is 4-10 times harder than retaining an existing one. So keep building your relationships with newly acquired customers and make sure you improve your engagement KPIs.

How does your startup score against other SaaS companies?

Tracking analytics and data might make more sense if you look at them as standalone numbers and rates. First, it's important to look for trends over time and, second, you might want to benchmark against other SaaS and tech companies. If you're wondering what is the typical KPIs for a SaaS company, look at the following survey of over 400 private SaaS companies which represents deep benchmarking data and insights on the growth and operations of private SaaS companies.

Survey part 1
Survey part 2

These benchmark metrics will help you see how you're doing and create a detailed business plan for your startup. Such a business plan can help you present your business in front of VCs for funding or just set business goals.

The importance of data-driven decisions for SaaS startups

To make an early-stage SaaS company successful, you can’t just build a great product or change your software subscription model and assume that hordes of customers will come. You need to have a thoughtful marketing strategy and run some sort of marketing and sales campaigns to make people aware of your SaaS product and attract your target market.

The SaaS economic model is unique from almost any other. It relies on small amounts of recurring revenues to support growth. To make rational, data-driven decisions when it comes to your marketing, sales, and services operations you need to track important metrics and KPIs from day one of your early-stage startups.

Free download: SaaS Cohort Analysis Model - KPIs for early-stage startups

Video Transcript:

Hey, what's up? This is Jason Drohn. Welcome to today's presentation. This is GSDdaily, number 59. Today's topic we're going to talk about metrics, namely KPIs. For those of you who don't know what KPIs are, it's key performance indicators. Usually, a business, a company, tracks a couple of them. So two, three, four, they have like the numbers that they watch. For instance, YouTube, one of their big, early on one of their big KPIs that they started tracking was the number of hours watched. The number of hours watched was a much more meaningful metric than the number of video views. So it was just something that they did and it has served them very well. And the KPIs really what it does is it lets you know the health of your business by just a glance, by just looking at dashboards.

One of the things that we're doing lately with clients is setting up in kind of personalized dashboards with their KPIs so that they can see what numbers are important to them. You know, what numbers are important to their business? What are we looking at in optimizing for them, you know? So it has worked out well that way. But the point of today's article or the point of today's video is to introduce you to this idea of KPIs and get you thinking about what you need to look at to figure out how your business is progressing. To figure out how healthy your business is.

So for those of you who don't know who I am. My name is Jason Drohn. I'm the creator of doneforyou.com. We specialize in three things, creating offers. So creating offers, creating sales funnels, and then also marketing automation. And putting together the entire system from the offer up to traffic that will drive your business forward into this new digital decade, if you will.

Today we're going to dive into some KPIs. Now I'm going to throw in ... So this blog post we wrote, basically the blog, the purpose of the article was really to kind of talk about ... It was to talk about the SaaS KPIs or software as a service KPIs. So SaaS KPIs is a form of hosted software. I have SaaS software that my team builds and that we sell and that we use for clients. So basically it is all the cloud-hosted software. So if you pay per month for a piece of software that you don't have like a physical CD any more, nobody sends out physical CDs to install it on your computer. Everything is online. So, that is all SaaS software. It's cloud-based software.

Now SaaS KPIs software has a very mature business model because of venture capital, because of all the money that has been put into it over the last 20 years. So typically SaaS KPIs companies, they look at data differently than the rest of us. They're way far ahead of where we are or where most digital businesses are because they're forced, they've been forced to be that way because so much of their world runs around venture capital and agile funds and everything else. So oftentimes when you're looking for how to use data, the best place to look is in that software category.

So for SaaS KPIs, there's a lot of early-stage startups and late-stage startups. And this is really for any business. Every stage of business kind of has its fundamental metrics that they're looking for. So there's always this challenge around KPIs and that's what number is more important than others. So for early-stage SaaS KPIs startups and tech startups, they're not profitable until they are always in. Sometimes it's subscriber growth. Sometimes they have to do free trials and stuff so there's a lot of loss leaders out there. They don't make that money back until month two, month three.

So the metrics that a startup measures matter quite a great deal. Here are some of the things that, some of the KPIs that you can think about measuring when you're early stage. Or I mean, and they're pretty simple, your ad agencies talk about this stuff all the time. So monthly unique visitors, how many new leads. Lead generation is a metric that we watch day in and day out. I mean, it's how many new leads came into our business because we know that we're going to monetize the leads at some point.

Monetizing leads earlier is better, but at some point, we're going to end up generating revenue from those leads that are coming in. It's inevitable when you have the email sequences and everything else. It might take six months for a lead to come in and buy something, but they will buy something eventually. Your customer acquisition rate, your churn rate, the average use per user per month. That's a software thing. So it's how I was talking about YouTube. So YouTube doesn't track video views. They don't care how many times a video is viewed. What they care about is the number of hours watched. And even if you look at some of their internal documentation for their partner, their YouTube partners, when you become an approved YouTube partner and you get paid for video views and stuff, it's 4,000 hours, you know? So 4,000 hours within one year, within a one year chunk of time, and you have to have 1,000 subscribers, so you have to be doing it for a while.

Usually, it takes between 100 and 200 videos to get to those numbers. That's at least the metric, the average. If you look it up online you'll see a bunch of research, they pulled 100,000, 120,000 YouTubers together. And that's how many videos somebody had to publish on average to get to the 4,000 hours of video content viewed yearly and 1,000 subscribers. So it's a meaningful metric for YouTube. Your meaningful metric might be something different. So if you have a software app, it might be downloaded, it might be log-ins, it might be hours used, minutes used. It might be daily unique visitors, like that kind of thing.

So the conversion metrics, once you start getting into the sales funnel, the conversion metrics they start to make ... Those tend to be the KPIs that you kind of you gravitate towards. So your visitor to lead rate or your lead conversion. So the opt-in that we're running, the funnel factor opts-in. We talked yesterday, we talked a little bit about optimizing sales funnels and you saw that just one little test we ended up having a 16% increase in conversion on a lead page. So that is the numbers to track, the numbers to be cognizant of is the conversion that you have when somebody changes to a lead.

Lead to customer rate, or customer acquisition is another phrase for it. So how many, what is the percentage of somebody who is a lead turns into a customer or a prospect turns into a customer? So what is that conversion rate? It's something you need to be aware of as well. Some other like dollar amount kind of KPIs cost per lead is a big one. How much does it cost per lead? Sometimes it's three bucks, four bucks. Sometimes it's $6. Sometimes if it's a webinar it's 10 or 12 or 13 or whatever. But what is that cost per lead standpoint? Like in our funnel factor, funnel right now, I think we're spending $7 per lead, $7 per email lead, and then 14% of them are turning into customers. So every funnel has its own cost per lead number.
It has its own customer acquisition cost. Sometimes it cost $30 for us to acquire a customer, sometimes it cost 80. It ends up being right around 50 or $60, but that's also depending on the funnel, depending on how somebody moves through. Sometimes some of our clients have a $5,000 coaching package, and it might cost $700 to get a sale. So we spent $700 to get that new sale. But when the sale happens, it's $5,000. So return on ad spend is quite a bit higher.

Let's see, monthly revenue, monthly recurring revenue, MRR, yearly recurring revenue, YRR, monthly recurring revenue tends to be the standard, like the stalwart standard of how businesses end up kind of valuing themselves. And communicating how big they are or how much they're growing tends to be MRR, monthly recurring revenue. And then average revenue per account is another one. So if a customer is worth $120 to you, or a customer is worth $17,000 to you, it just depends on that's a number that you should be watching too.

A lot of times what ... In all of these numbers, they're influenced by something. So they might be influenced by your ... So your average revenue per account is more influenced by the upsells and the offers that you put in front of them when they're going through your sales cycle, or in the life cycle that they are with you. That tends to be how your customer lifetime value or your average revenue per account, whatever you want to call it, that tends to be how you influence that number. So every number is influenced by different things.

Cost per lead. I mean, it's going to be landing page. Landing page and then lead quality, like click quality, something coming from an ad. Customer acquisition cost, that's going to be how good is your sales material? How good is the landing page? How good is the sales page? Yesterday, as I said, we talked about how one, just one little tiny sub-headline influenced the sales. It actually, one sub-headline it decreased the number of leads coming in from a lead magnet, but it increased the number of sales. So it was like, do you want to take that front end hit to get the backend revenue? Of course, you do. So there are all kinds of really interesting things like that when you start getting into data and start being very aware of your numbers.

Expenses are pretty self-explanatory. Monthly expenses, cost of goods sold, operating expenses. So you need to at least know what those are and then other marketing metrics that matter. So traffic per channel and campaign, customer lifetime value kind of works in with that average revenue per account. Then we have brand reach and sales cycle. So those are all numbers that you want to pay attention to. It's actually on this there's a free download and Excel template here. So you can go ahead and download that once you click through this. I just realized I didn't put it in the comments it's in the ... There we go. All right, cool. Well, this is a dry topic for all of you to be liking and viewing this. That's pretty cool, thank you.

I was like, "Well, this blog post hadn't been updated in a while, and the information is good." And I usually what I do is, so when a blog post starts getting a lot of traffic, it starts getting ranking well on Google I go back through it and I update it. And oftentimes I update it with a video and that's some of what the purpose of the GSDdailies is. So then I get it transcribed and then we add it to the blog post. And by now you know the deal because you've been watching. But this particular blog post is well ranked for a lot of different keyword phrases. And it's particularly dry. I mean, it is, you can't get all excited about metrics and numbers, unless you're like, well some people can, but most people can't.

I don't, but I tend to geek out on this stuff, but it's hard to talk about. It's easier to internalize than it is to talk about it. Do you know what I mean? So, this is just monthly lead cost, customer acquisition rate, churn rate. Churn rate is a big one. I was just talking to a friend about this and basically, your churn rate is how long somebody stays a member. Every membership has a churn rate. So you might have a membership that's $67 a month. And the churn rate is in seven months. So after seven months on average people stop paying, people stop becoming members with you. If it's a mastermind, maybe it's four years or five years, or maybe you don't know what it is because you haven't been in business long enough to see what the end of that churn, that lifecycle looks like.

But churn rate is important, especially in software memberships, anything recurring, because on average if somebody stays with you for three months, which is normal, which is the average for memberships in subscription programs, it's three months. If you're doing better than three months, you're doing well. If you're doing less than three months, you need to improve. Three months is about average. But churn rate directly impacts, it correlates to your revenue. Because if your churn rate is $67, let's say you charge 100 bucks a month, then you get a new client for 150. So that first month you are in the whole 50 bucks immediately. And then you have to wait for 30 days for it to rebill, and then you make the $50.

So it's, you generate 200 in revenue and you paid 150 for the sale and then month three it rebuilds again. So it's 300 and that's all, that's free money technically because you already got them in your process. So you spent 150, you made 300 and then they cancel. So of course you want them to stay as long as possible. But if your churn rate is only one month or is two months, then you're cutting it close to being profitable on that transaction. So it's just something to think about when you're kicking through this.

And then Mars is on. What's up Mars? All right, I've got churn rate, average use per user, conversion KPIs, visitor lead rate, blah, blah, blah. Mars knows all this stuff. Software metrics, or just metrics in general, operating expenses, traffic per channel. We kind of talked about all this stuff, sales cycle, the importance of data. So the important part is you got to know your numbers. A cool tool. So there's something that I have been playing around with. So there's a piece of software that I have been using for years called Cyfe. So Cyfe, C-Y-F-E.com. This isn't an affiliate link or anything.

I watched these guys grow up and I don't know how much it is now. I know I only pay like, that's actually what I pay, 29 bucks a month. So they haven't increased their prices, which I don't know why, because it's awesome software. But the dashboards you can create, you can build dashboards that will give you insight into your business. All your ad spend, your Facebook spends, your Google spends, your ... So some of the things that I track. I track revenue, I track website traffic, I track SEO traffic so that I know how many users we're generating every month to Done For You, to all of our properties, but like all of our SEO traffic. It graphs it all for you.

So right now, because of this podcast organic traffic thing, I'm experiencing a 50% growth in month over month organic traffic, which is awesome. So in the last, since the beginning of March, we've doubled, and then we doubled again in organic traffic. So in two months, in 59, we're in episode 59, so two and a half months now. Ad spends, clicks, conversions, leads, revenue. So these dashboards will help you build all that stuff. You can end up, you have a dashboard just like what's up on the screen here. You have a dashboard you can add your widgets in, and then you can plot them and you can track, all I care about is Facebook video views. All I care about is YouTube views. I care about search rankings. I care about the overall traffic. I care about invoices paid versus invoices sent.

So just real quick you can just throw up a dashboard, boom, boom, boom. I check it every morning, see how the previous day was. And then every once in a while I'll like ... There'll be a blog post that pops off. So it's like, all right, I'm going to go figure out why it did or ... So it's a great tool for keeping a top-level view of your business and the numbers in your business without being overrun by data. Without having to just be crushed by it. Do you know what I mean?

So there are some other good tools, but Cyfe tends to be the one that I refer people to. I mean, we've been putting ad specific dashboards together for our clients, but this is the one I use for tracking all of our internal stuff. And it works out nicely. It takes a little bit to set up, but it's nice. So if you have any questions at all, just let me know. If you would like to talk about setting up a sales funnel or putting together an offer or building marketing automation and running traffic to your business so that you get more leads and convert more clicks into clients and customers then go to doneforyou.com/start. And we can put all of this together, all of this to work for you. And that's about it for today.

I don't think we have any comments here. I think we're good. Sweet. So tomorrow is Friday, tomorrow is the last day we got, I'm not sure what we're talking about. I think we're going to talk about some Facebook ads, some optimization at 10, and then at 11 Aaron Parkinson and I are jumping on with sales system experts. And we're going to talk about something else conversion-related.

So I'll talk to you soon, right? Thanks. Bye.