SaaS Metrics: The BEST Guide to Software as a Service KPIs

And we are live. Welcome to today's And we are live. Welcome to today's episode of MicroCom on Air. As always, episode of MicroCom on Air. As always, episode of MicroCom on Air. As always, I'm your host, Rob Walling. Every other I'm your host, Rob Walling. Every other I'm your host, Rob Walling. Every other Wednesday at 1 p.m. Eastern, 10 a.m. Wednesday at 1 p.m. Eastern, 10 a.m. Wednesday at 1 p.m. Eastern, 10 a.m. Pacific, we live stream for about 30 Pacific, we live stream for about 30 Pacific, we live stream for about 30 minutes. We cover topics related to minutes. We cover topics related to minutes. We cover topics related to building and growing ambitious SAS building and growing ambitious SAS building and growing ambitious SAS startups that bring us freedom and startups that bring us freedom and startups that bring us freedom and purpose and allow us to maintain healthy purpose and allow us to maintain healthy purpose and allow us to maintain healthy relationships. We don't ask for relationships. We don't ask for relationships. We don't ask for permission to start companies. We build permission to start companies. We build permission to start companies. We build and ship real products that sell to real and ship real products that sell to real and ship real products that sell to real customers who pay us real money. Thanks customers who pay us real money. Thanks customers who pay us real money. Thanks so much for joining me again this week. so much for joining me again this week. so much for joining me again this week. I'm excited to cover this topic today. I'm excited to cover this topic today. I'm excited to cover this topic today. It's something I think some folks might It's something I think some folks might It's something I think some folks might feel is a little boring or it's feel is a little boring or it's feel is a little boring or it's something, you know, that they don't something, you know, that they don't something, you know, that they don't want to dig into. But the best SAS want to dig into. But the best SAS want to dig into. But the best SAS founders I know are looking at their founders I know are looking at their founders I know are looking at their metrics. Whether you call this SAS metrics. Whether you call this SAS metrics. Whether you call this SAS metrics, whether you call it my my metrics, whether you call it my my metrics, whether you call it my my numbers, whether you call it SAS KPIs, numbers, whether you call it SAS KPIs, numbers, whether you call it SAS KPIs, which I find jargony because I didn't which I find jargony because I didn't which I find jargony because I didn't know what KPIs were for for years. I know what KPIs were for for years. I know what KPIs were for for years. I thought of as this is MBA term but I'm thought of as this is MBA term but I'm thought of as this is MBA term but I'm going to define it here in a second. going to define it here in a second. going to define it here in a second. Whatever your thoughts are on this I Whatever your thoughts are on this I Whatever your thoughts are on this I have a framework the three high three have a framework the three high three have a framework the three high three low framework of the six SAS metrics you low framework of the six SAS metrics you low framework of the six SAS metrics you should be covering. So today's topic is should be covering. So today's topic is should be covering. So today's topic is SAS metrics the best guide to software SAS metrics the best guide to software SAS metrics the best guide to software as a service KPIs.

as a service KPIs. as a service KPIs. So, if you've heard of Peter Ducker, he So, if you've heard of Peter Ducker, he So, if you've heard of Peter Ducker, he is a management expert, management guru is a management expert, management guru is a management expert, management guru who has written a ton of books and um who has written a ton of books and um who has written a ton of books and um you know has educated a lot of folks on you know has educated a lot of folks on you know has educated a lot of folks on how to run and build companies. And how to run and build companies. And how to run and build companies. And something that he is famous for saying something that he is famous for saying something that he is famous for saying is what gets measured gets managed. And is what gets measured gets managed. And is what gets measured gets managed. And in a SAS app, like any company, we do in a SAS app, like any company, we do in a SAS app, like any company, we do need to know some numbers. And what I need to know some numbers. And what I need to know some numbers. And what I found is that some folks get overwhelmed found is that some folks get overwhelmed found is that some folks get overwhelmed by it, right? They get overwhelmed to by it, right? They get overwhelmed to by it, right? They get overwhelmed to the point where they're trying to track the point where they're trying to track the point where they're trying to track 30 different numbers and keeping those 30 different numbers and keeping those 30 different numbers and keeping those numbers, you know, not keeping them in numbers, you know, not keeping them in numbers, you know, not keeping them in your head, but keeping the allowable your head, but keeping the allowable your head, but keeping the allowable ranges in your head. Um, too many things ranges in your head. Um, too many things ranges in your head. Um, too many things can be too distracting is really what it can be too distracting is really what it can be too distracting is really what it is. So, what I'm going to talk about is. So, what I'm going to talk about is. So, what I'm going to talk about today is my three high, three low today is my three high, three low today is my three high, three low framework for SAS metrics. And obviously framework for SAS metrics. And obviously framework for SAS metrics. And obviously in the title of this video, you know, I in the title of this video, you know, I in the title of this video, you know, I talked about the best guide to software talked about the best guide to software talked about the best guide to software as a service KPIs. So you might be as a service KPIs. So you might be as a service KPIs. So you might be thinking, what is a KPI? That's just a thinking, what is a KPI? That's just a thinking, what is a KPI? That's just a simple acronym for key performance simple acronym for key performance simple acronym for key performance indicator. And key performance indicator. And key performance indicator. And key performance indicators are the things that we are indicators are the things that we are indicators are the things that we are going to monitor. So again, whatever you going to monitor. So again, whatever you going to monitor. So again, whatever you call them, even if you don't have to use call them, even if you don't have to use call them, even if you don't have to use the term KPI, you can use the term the term KPI, you can use the term the term KPI, you can use the term metrics, you can say our most important metrics, you can say our most important metrics, you can say our most important numbers, our northstar metrics, any of numbers, our northstar metrics, any of numbers, our northstar metrics, any of these things work. KPI is just a term these things work. KPI is just a term these things work. KPI is just a term that a lot of folks use and understand.

that a lot of folks use and understand. that a lot of folks use and understand. So with that said, let's dive into the So with that said, let's dive into the So with that said, let's dive into the three high, three low framework. three high, three low framework. three high, three low framework. And we're I'm going to start with the And we're I'm going to start with the And we're I'm going to start with the three low. So these are three SAS three low. So these are three SAS three low. So these are three SAS metrics that you should be tracking. You metrics that you should be tracking. You metrics that you should be tracking. You should know these numbers by heart. And should know these numbers by heart. And should know these numbers by heart. And you should know the the realistic range you should know the the realistic range you should know the the realistic range for your app, where it usually is, where for your app, where it usually is, where for your app, where it usually is, where it usually falls, and you should know it usually falls, and you should know it usually falls, and you should know where it should be in the broader, you where it should be in the broader, you where it should be in the broader, you know, SAS ecosystem. know, SAS ecosystem. know, SAS ecosystem. kind of the rules of thumb that I often kind of the rules of thumb that I often kind of the rules of thumb that I often talk about, you know, um, you know, the talk about, you know, um, you know, the talk about, you know, um, you know, the the state of independent SAS survey and the state of independent SAS survey and the state of independent SAS survey and report that we do every year has ranges report that we do every year has ranges report that we do every year has ranges and has a histogram of how many and has a histogram of how many and has a histogram of how many companies fall into, you know, which companies fall into, you know, which companies fall into, you know, which bands for a lot of these metrics as well bands for a lot of these metrics as well bands for a lot of these metrics as well as if you have experience with across as if you have experience with across as if you have experience with across multiple SAS companies, um, you or multiple SAS companies, um, you or multiple SAS companies, um, you or you're in Microsoft Connect, you can ask you're in Microsoft Connect, you can ask you're in Microsoft Connect, you can ask opinions. I'm always happy to weigh in opinions. I'm always happy to weigh in opinions. I'm always happy to weigh in on on rules of thumb. um you know on on rules of thumb. um you know on on rules of thumb. um you know knowing these metrics and then knowing knowing these metrics and then knowing knowing these metrics and then knowing the kind of the rule of thumb ranges you the kind of the rule of thumb ranges you the kind of the rule of thumb ranges you should be in this this is what you want should be in this this is what you want should be in this this is what you want to do if you want to optimize and grow to do if you want to optimize and grow to do if you want to optimize and grow your SAS company faster. So let's take a your SAS company faster. So let's take a your SAS company faster. So let's take a look at the three low. We'll start with look at the three low. We'll start with look at the three low. We'll start with the first one. It's the cost to acquire the first one. It's the cost to acquire the first one. It's the cost to acquire a customer. It's often pronounced CAC a customer. It's often pronounced CAC a customer. It's often pronounced CAC because it's CAC.

because it's CAC. because it's CAC. This number in a perfect world you want This number in a perfect world you want This number in a perfect world you want to be low. And now what you'll notice is to be low. And now what you'll notice is to be low. And now what you'll notice is that a lot of these KPIs are in that a lot of these KPIs are in that a lot of these KPIs are in opposition to each other. their opposition to each other. their opposition to each other. their intention. So, right now I'm going to intention. So, right now I'm going to intention. So, right now I'm going to say cost to acquire a customer should be say cost to acquire a customer should be say cost to acquire a customer should be low or you want it to be as low as low or you want it to be as low as low or you want it to be as low as possible. Um, and then when we talk possible. Um, and then when we talk possible. Um, and then when we talk about things that we want to be high, about things that we want to be high, about things that we want to be high, I'll talk about, you know, annual I'll talk about, you know, annual I'll talk about, you know, annual contract value needing to be high. And contract value needing to be high. And contract value needing to be high. And oftent times the higher that is, the oftent times the higher that is, the oftent times the higher that is, the higher it is to acquire a customer higher it is to acquire a customer higher it is to acquire a customer because they're worth more. So, you will because they're worth more. So, you will because they're worth more. So, you will see that these things are intention. But see that these things are intention. But see that these things are intention. But again, in a perfect world, the three again, in a perfect world, the three again, in a perfect world, the three high, three low framework has three of high, three low framework has three of high, three low framework has three of these you you're trying to push up. you these you you're trying to push up. you these you you're trying to push up. you want them as high as possible and three want them as high as possible and three want them as high as possible and three that you're trying to move you move that you're trying to move you move that you're trying to move you move lower. So the cost to acquire customer, lower. So the cost to acquire customer, lower. So the cost to acquire customer, what are some ways that you can what are some ways that you can what are some ways that you can essentially lower it? And I don't just essentially lower it? And I don't just essentially lower it? And I don't just mean little tactics, but like if you're mean little tactics, but like if you're mean little tactics, but like if you're deciding whi which app to build or what deciding whi which app to build or what deciding whi which app to build or what industry to build in, that can have a industry to build in, that can have a industry to build in, that can have a major impact on your cost to acquire a major impact on your cost to acquire a major impact on your cost to acquire a customer. So, one way to have a low CAC customer. So, one way to have a low CAC customer. So, one way to have a low CAC is to enter a large market with an is to enter a large market with an is to enter a large market with an incumbent, usually a large incumbent incumbent, usually a large incumbent incumbent, usually a large incumbent where people are looking to switch away where people are looking to switch away where people are looking to switch away from that incumbent. Maybe that from that incumbent. Maybe that from that incumbent. Maybe that incumbent has raised their prices so incumbent has raised their prices so incumbent has raised their prices so much over time that people don't feel much over time that people don't feel much over time that people don't feel like they're getting the value and they like they're getting the value and they like they're getting the value and they it just feels outrageously expensive for it just feels outrageously expensive for it just feels outrageously expensive for what they're getting. Maybe that what they're getting. Maybe that what they're getting. Maybe that incumbent is not innovating anymore and incumbent is not innovating anymore and incumbent is not innovating anymore and their product is lagging. Maybe the their product is lagging. Maybe the their product is lagging. Maybe the product is really buggy. Maybe the sales product is really buggy. Maybe the sales product is really buggy. Maybe the sales process is annoying and people just have process is annoying and people just have process is annoying and people just have a bad taste in their mouth.

a bad taste in their mouth. a bad taste in their mouth. You can imagine uh examples with a big You can imagine uh examples with a big You can imagine uh examples with a big incumbent like Salesforce, right? It's a incumbent like Salesforce, right? It's a incumbent like Salesforce, right? It's a big company started 20 years ago I think big company started 20 years ago I think big company started 20 years ago I think now. And so the product is obviously now. And so the product is obviously now. And so the product is obviously kind of kind of tough to work with. It's kind of kind of tough to work with. It's kind of kind of tough to work with. It's very expensive. The sales process is very expensive. The sales process is very expensive. The sales process is ownorous. It's all the things that make ownorous. It's all the things that make ownorous. It's all the things that make people dislike a company and not want to people dislike a company and not want to people dislike a company and not want to use their software. So you can imagine use their software. So you can imagine use their software. So you can imagine Pipe Drive and Close.com which are Pipe Drive and Close.com which are Pipe Drive and Close.com which are Salesforce um competitors. They've they Salesforce um competitors. They've they Salesforce um competitors. They've they probably have a pretty easy time picking probably have a pretty easy time picking probably have a pretty easy time picking away people, refugees I used to call away people, refugees I used to call away people, refugees I used to call them. They're they're Salesforce them. They're they're Salesforce them. They're they're Salesforce refugees who really want to get out and refugees who really want to get out and refugees who really want to get out and they are looking to switch actively they are looking to switch actively they are looking to switch actively because when people are not looking to because when people are not looking to because when people are not looking to switch, it's harder to find them. With switch, it's harder to find them. With switch, it's harder to find them. With Drip, which was an ESP that I built and Drip, which was an ESP that I built and Drip, which was an ESP that I built and sold in 2016, we looked at Infusionoft sold in 2016, we looked at Infusionoft sold in 2016, we looked at Infusionoft and Entreport, which were these and Entreport, which were these and Entreport, which were these marketing automation platforms, and marketing automation platforms, and marketing automation platforms, and people did not like them. The software people did not like them. The software people did not like them. The software was awful. It was buggy. The sales was awful. It was buggy. The sales was awful. It was buggy. The sales process was rough. They were expensive. process was rough. They were expensive. process was rough. They were expensive. It's all the things that you wanted and It's all the things that you wanted and It's all the things that you wanted and we found it very easy to pull refugees we found it very easy to pull refugees we found it very easy to pull refugees from them. You can imagine uh intercom from them. You can imagine uh intercom from them. You can imagine uh intercom these days. I think intercom's product these days. I think intercom's product these days. I think intercom's product offering is still really good, but I get offering is still really good, but I get offering is still really good, but I get the feeling and I'm hearing, you know, the feeling and I'm hearing, you know, the feeling and I'm hearing, you know, the kind of the word on the street is the kind of the word on the street is the kind of the word on the street is that their pricing feels a little high.

that their pricing feels a little high. that their pricing feels a little high. Their pricing feels a lot high to a lot Their pricing feels a lot high to a lot Their pricing feels a lot high to a lot of SAS founders and they're looking to of SAS founders and they're looking to of SAS founders and they're looking to switch away and figure out intercom switch away and figure out intercom switch away and figure out intercom replacements. And so a company like user replacements. And so a company like user replacements. And so a company like user list who does part of what intercom does list who does part of what intercom does list who does part of what intercom does is is reaping the benefit of that. is is reaping the benefit of that. is is reaping the benefit of that. Right? So this is one way to have uh low Right? So this is one way to have uh low Right? So this is one way to have uh low cost to acquire a customer. Another way cost to acquire a customer. Another way cost to acquire a customer. Another way is to really double down on organic on is to really double down on organic on is to really double down on organic on content and organic search. Organic content and organic search. Organic content and organic search. Organic search and ranking in whether it's search and ranking in whether it's search and ranking in whether it's Google, whether you rank in Amazon, Google, whether you rank in Amazon, Google, whether you rank in Amazon, whether you rank in WordPress plug-in whether you rank in WordPress plug-in whether you rank in WordPress plug-in repo, whether you rank in YouTube. repo, whether you rank in YouTube. repo, whether you rank in YouTube. Organic search is a way to get free Organic search is a way to get free Organic search is a way to get free traffic. And I put free in quotes traffic. And I put free in quotes traffic. And I put free in quotes because really it's free except for your because really it's free except for your because really it's free except for your time. You know, I'm assuming you're a time. You know, I'm assuming you're a time. You know, I'm assuming you're a founder, you're early stage, you're founder, you're early stage, you're founder, you're early stage, you're going to be doing a lot of this going to be doing a lot of this going to be doing a lot of this yourself. Organic search is actually yourself. Organic search is actually yourself. Organic search is actually quite expensive if you have to hire a quite expensive if you have to hire a quite expensive if you have to hire a team to do it, but there are companies team to do it, but there are companies team to do it, but there are companies um in Tiny Seed, the startup accelerator um in Tiny Seed, the startup accelerator um in Tiny Seed, the startup accelerator that I've run, who have really mastered that I've run, who have really mastered that I've run, who have really mastered the art of SEO and are ranking very high the art of SEO and are ranking very high the art of SEO and are ranking very high for terms that apply to their business. for terms that apply to their business. for terms that apply to their business. And one example of that is, and they've And one example of that is, and they've And one example of that is, and they've been very public about this, is Scraping been very public about this, is Scraping been very public about this, is Scraping B. And they have um they are now a B. And they have um they are now a B. And they have um they are now a seven-figure business. Again, they're seven-figure business. Again, they're seven-figure business. Again, they're public about this. um and they have done public about this. um and they have done public about this. um and they have done a tremendous amount of that through a tremendous amount of that through a tremendous amount of that through content and SEO and they have a low cost content and SEO and they have a low cost content and SEO and they have a low cost to acquire a customer because of it.

to acquire a customer because of it. to acquire a customer because of it. When you get into things like When you get into things like When you get into things like pay-per-click ads, you know, Adwords and pay-per-click ads, you know, Adwords and pay-per-click ads, you know, Adwords and such, um that is where things get such, um that is where things get such, um that is where things get expensive. I'm not saying you shouldn't expensive. I'm not saying you shouldn't expensive. I'm not saying you shouldn't do them, but I am saying your cost to do them, but I am saying your cost to do them, but I am saying your cost to acquire uh will go up. In a lot of acquire uh will go up. In a lot of acquire uh will go up. In a lot of spaces, having a high cost to acquire is spaces, having a high cost to acquire is spaces, having a high cost to acquire is a necessity, right? If you're marketing a necessity, right? If you're marketing a necessity, right? If you're marketing into construction uh firms or you're into construction uh firms or you're into construction uh firms or you're marketing into government or education, marketing into government or education, marketing into government or education, you know, there's a lot of things where you know, there's a lot of things where you know, there's a lot of things where the cost acquire is going to be really the cost acquire is going to be really the cost acquire is going to be really high. Um, but another way to keep your high. Um, but another way to keep your high. Um, but another way to keep your cost to acquire low is to enter a space cost to acquire low is to enter a space cost to acquire low is to enter a space with lots of online chatter. There's a with lots of online chatter. There's a with lots of online chatter. There's a lot of forums, there's a lot of Facebook lot of forums, there's a lot of Facebook lot of forums, there's a lot of Facebook groups, etc. that are already talking groups, etc. that are already talking groups, etc. that are already talking about them. If people are already about them. If people are already about them. If people are already online, they can tend to be easier to online, they can tend to be easier to online, they can tend to be easier to reach if you hang out in those groups reach if you hang out in those groups reach if you hang out in those groups and you have conversations. And the and you have conversations. And the and you have conversations. And the fourth way that I was uh as I was fourth way that I was uh as I was fourth way that I was uh as I was brainstorming this uh to have lowcost brainstorming this uh to have lowcost brainstorming this uh to have lowcost acquire is if there are people with acquire is if there are people with acquire is if there are people with audiences talking about the problem that audiences talking about the problem that audiences talking about the problem that your tool solves. your tool solves. your tool solves. So there are a lot of people already So there are a lot of people already So there are a lot of people already with podcast audiences, YouTube with podcast audiences, YouTube with podcast audiences, YouTube audiences, you know, blog followings audiences, you know, blog followings audiences, you know, blog followings that are talking about marketing, that are talking about marketing, that are talking about marketing, entrepreneurship, startups. And so if entrepreneurship, startups. And so if entrepreneurship, startups. And so if you have a tool for one of those you have a tool for one of those you have a tool for one of those audiences, you can get in front of their audiences, you can get in front of their audiences, you can get in front of their audience. It's other other people's audience. It's other other people's audience. It's other other people's other people's audiences, right? That is other people's audiences, right? That is other people's audiences, right? That is a way to kickstart or quickly get a lot a way to kickstart or quickly get a lot a way to kickstart or quickly get a lot of customers at low cost. You know that of customers at low cost. You know that of customers at low cost. You know that there are many fewer big audiences there are many fewer big audiences there are many fewer big audiences podcasts and such with audiences of like podcasts and such with audiences of like podcasts and such with audiences of like CEOs of large construction firms or CEOs of large construction firms or CEOs of large construction firms or heads of government agencies. I'm sure heads of government agencies. I'm sure heads of government agencies. I'm sure they exist but you know that it's not they exist but you know that it's not they exist but you know that it's not going to be as easy to reach those folks going to be as easy to reach those folks going to be as easy to reach those folks and therefore the cost to acquire is and therefore the cost to acquire is and therefore the cost to acquire is going to be higher. So that was cost to

going to be higher. So that was cost to going to be higher. So that was cost to acquire. That's our first one. Second acquire. That's our first one. Second acquire. That's our first one. Second one is sales effort. This is when we one is sales effort. This is when we one is sales effort. This is when we want to keep low. So I'm defining sales want to keep low. So I'm defining sales want to keep low. So I'm defining sales effort as both like how many calls, how effort as both like how many calls, how effort as both like how many calls, how many touch points you have to make in many touch points you have to make in many touch points you have to make in order to make a sale and how long the order to make a sale and how long the order to make a sale and how long the sales cycle is. So it's duration plus sales cycle is. So it's duration plus sales cycle is. So it's duration plus effort or it's duration plus uh number effort or it's duration plus uh number effort or it's duration plus uh number of touch points and I'm calling that of touch points and I'm calling that of touch points and I'm calling that sales effort. How can we keep this low? sales effort. How can we keep this low? sales effort. How can we keep this low? What are ways to to keep it low? So the What are ways to to keep it low? So the What are ways to to keep it low? So the first one is to enter a space where you first one is to enter a space where you first one is to enter a space where you can have selfservice sign up and can have selfservice sign up and can have selfservice sign up and onboarding. I often call this lowtouch onboarding. I often call this lowtouch onboarding. I often call this lowtouch or no touch sales process. And so or no touch sales process. And so or no touch sales process. And so examples of this are lowcost tools like examples of this are lowcost tools like examples of this are lowcost tools like snappa.com snappa.com snappa.com which does social media images. And I've which does social media images. And I've which does social media images. And I've interviewed the founder Chris Gimmer and interviewed the founder Chris Gimmer and interviewed the founder Chris Gimmer and he said, "Yeah, our churn is higher than he said, "Yeah, our churn is higher than he said, "Yeah, our churn is higher than we'd like it to be, but it's really easy we'd like it to be, but it's really easy we'd like it to be, but it's really easy to get new customers. It's not to get new customers. It's not to get new customers. It's not expensive. They going back to that low expensive. They going back to that low expensive. They going back to that low cost to acquire. They're really good at cost to acquire. They're really good at cost to acquire. They're really good at SEO and they have a self-serve signup SEO and they have a self-serve signup SEO and they have a self-serve signup and onboarding process." And so Snappa and onboarding process." And so Snappa and onboarding process." And so Snappa has taken advantage of really low sales has taken advantage of really low sales has taken advantage of really low sales cost. Squadcast.fm, cost. Squadcast.fm, cost. Squadcast.fm, which is where I record all three of my which is where I record all three of my which is where I record all three of my podcasts. It's podcast recording podcasts. It's podcast recording podcasts. It's podcast recording software. And while they do have big software. And while they do have big software. And while they do have big enterprises coming for, you know, enterprises coming for, you know, enterprises coming for, you know, multi,000 deals, they also have $9 a multi,000 deals, they also have $9 a multi,000 deals, they also have $9 a month, $14 a month plans. And so they've month, $14 a month plans. And so they've month, $14 a month plans. And so they've built out self-service signup and built out self-service signup and built out self-service signup and onboarding.

onboarding. onboarding. another way to hey, you know, if you another way to hey, you know, if you another way to hey, you know, if you can't do there's spaces where you just can't do there's spaces where you just can't do there's spaces where you just can't do self-s serve sign up and can't do self-s serve sign up and can't do self-s serve sign up and onboarding, it's just not going to work. onboarding, it's just not going to work. onboarding, it's just not going to work. But a lot of spaces um and a lot of But a lot of spaces um and a lot of But a lot of spaces um and a lot of industries and a lot of customer types, industries and a lot of customer types, industries and a lot of customer types, you can do a one call close and trying you can do a one call close and trying you can do a one call close and trying to get to the point where the the to get to the point where the the to get to the point where the the decision is not made by committee. Maybe decision is not made by committee. Maybe decision is not made by committee. Maybe it's made by a founder or a developer or it's made by a founder or a developer or it's made by a founder or a developer or a single developer manager. That's when a single developer manager. That's when a single developer manager. That's when you can do a one call close. If the you can do a one call close. If the you can do a one call close. If the decision is made by multiple people and decision is made by multiple people and decision is made by multiple people and they can't all be on one call, then it's they can't all be on one call, then it's they can't all be on one call, then it's always going to be a call and a back and always going to be a call and a back and always going to be a call and a back and forth and you you needing to provide forth and you you needing to provide forth and you you needing to provide more sales material, usually a second more sales material, usually a second more sales material, usually a second call, and that's when sales effort call, and that's when sales effort call, and that's when sales effort increases. So again, I'm not saying that increases. So again, I'm not saying that increases. So again, I'm not saying that you can't succeed if you don't have a you can't succeed if you don't have a you can't succeed if you don't have a one call close because there are many one call close because there are many one call close because there are many companies that I'm intimately familiar companies that I'm intimately familiar companies that I'm intimately familiar with that do, but they spend a lot of with that do, but they spend a lot of with that do, but they spend a lot of their time trying to shrink that sales their time trying to shrink that sales their time trying to shrink that sales effort because it's expensive and it's effort because it's expensive and it's effort because it's expensive and it's timeconuming. timeconuming. timeconuming. All right, the third uh metric, third All right, the third uh metric, third All right, the third uh metric, third KPI in our three low category is churn.

KPI in our three low category is churn. KPI in our three low category is churn. Churn is the percentage of people that Churn is the percentage of people that Churn is the percentage of people that are cancelling each month. Right? This are cancelling each month. Right? This are cancelling each month. Right? This churn is is the Achilles heel of SAS. It churn is is the Achilles heel of SAS. It churn is is the Achilles heel of SAS. It is what kills SAS apps. And is what kills SAS apps. And is what kills SAS apps. And how do you know how do you get your how do you know how do you get your how do you know how do you get your churn low? That's a huge goal. If you churn low? That's a huge goal. If you churn low? That's a huge goal. If you can get your churn low, you can grow can get your churn low, you can grow can get your churn low, you can grow infinitely. Just incredible. Um, and infinitely. Just incredible. Um, and infinitely. Just incredible. Um, and you know, you can get your turn low by you know, you can get your turn low by you know, you can get your turn low by having product market fit, which I know having product market fit, which I know having product market fit, which I know is not helpful because that feels like is not helpful because that feels like is not helpful because that feels like more jargon, but product market fit is more jargon, but product market fit is more jargon, but product market fit is that you've built something that people that you've built something that people that you've built something that people really want and are willing to pay for. really want and are willing to pay for. really want and are willing to pay for. And once you hit that point and then And once you hit that point and then And once you hit that point and then you're finding the right people and you're finding the right people and you're finding the right people and you're turning away the wrong people, you're turning away the wrong people, you're turning away the wrong people, oftentimes with positioning or with oftentimes with positioning or with oftentimes with positioning or with raising your prices or with even a raising your prices or with even a raising your prices or with even a qualification process, a demo only. You qualification process, a demo only. You qualification process, a demo only. You know, I've seen companies do all kinds know, I've seen companies do all kinds know, I've seen companies do all kinds of things. of things. of things. You can uh drive your churn down You can uh drive your churn down You can uh drive your churn down overall, but there's some other ways to overall, but there's some other ways to overall, but there's some other ways to do it, too. There is um like having do it, too. There is um like having do it, too. There is um like having exceptional onboarding that gets people exceptional onboarding that gets people exceptional onboarding that gets people to that aha moment quickly. So, if you to that aha moment quickly. So, if you to that aha moment quickly. So, if you go to useronboard.com, you can see go to useronboard.com, you can see go to useronboard.com, you can see Samuel Hulich reviewing a bunch of uh Samuel Hulich reviewing a bunch of uh Samuel Hulich reviewing a bunch of uh big, you know, onboarding flows and you big, you know, onboarding flows and you big, you know, onboarding flows and you can get some best practices from there.

can get some best practices from there. can get some best practices from there. I call it the minimum path to awesome, I call it the minimum path to awesome, I call it the minimum path to awesome, MPA. And it's what's the minimum path to MPA. And it's what's the minimum path to MPA. And it's what's the minimum path to where that customer is basically getting where that customer is basically getting where that customer is basically getting value out of your product. Um because if value out of your product. Um because if value out of your product. Um because if people don't onboard, they're going to people don't onboard, they're going to people don't onboard, they're going to churn, right? That's the first step. churn, right? That's the first step. churn, right? That's the first step. Product market fit will give you low Product market fit will give you low Product market fit will give you low churn over the long term. Like it will churn over the long term. Like it will churn over the long term. Like it will it will it means people won't leave in 6 it will it means people won't leave in 6 it will it means people won't leave in 6 months, 12 months, 18 months. You have a months, 12 months, 18 months. You have a months, 12 months, 18 months. You have a very long lifetime value of that very long lifetime value of that very long lifetime value of that customer. But if they're not getting customer. But if they're not getting customer. But if they're not getting onboarded in the first place, product onboarded in the first place, product onboarded in the first place, product market fit doesn't help you very much. market fit doesn't help you very much. market fit doesn't help you very much. It helps you a little because people It helps you a little because people It helps you a little because people will be motivated to try, but if your will be motivated to try, but if your will be motivated to try, but if your onboarding isn't good, you're still onboarding isn't good, you're still onboarding isn't good, you're still going to have churn. So having things going to have churn. So having things going to have churn. So having things like easy setup, couple clicks to import like easy setup, couple clicks to import like easy setup, couple clicks to import from their old tool, they don't need a from their old tool, they don't need a from their old tool, they don't need a consultant to get set up. These are ways consultant to get set up. These are ways consultant to get set up. These are ways that you can cut that first 60 or 90day that you can cut that first 60 or 90day that you can cut that first 60 or 90day churn, and then having, you know, churn, and then having, you know, churn, and then having, you know, product market fit really gets you that product market fit really gets you that product market fit really gets you that post 60 to 90 days. So there's two post 60 to 90 days. So there's two post 60 to 90 days. So there's two different factors in there. different factors in there. different factors in there. Last one I thought of for keeping churn Last one I thought of for keeping churn Last one I thought of for keeping churn low is having product innovation so that low is having product innovation so that low is having product innovation so that you don't become that stodgy incumbent you don't become that stodgy incumbent you don't become that stodgy incumbent that I mentioned above. As much as you that I mentioned above. As much as you that I mentioned above. As much as you know we want to raise prices over time know we want to raise prices over time know we want to raise prices over time with SAS, I mean that's like a a great with SAS, I mean that's like a a great with SAS, I mean that's like a a great secret. Um it's that's like a great secret. Um it's that's like a great secret. Um it's that's like a great secret of SAS. You also don't want to secret of SAS. You also don't want to secret of SAS. You also don't want to become the the company or the app who's become the the company or the app who's become the the company or the app who's raising prices and not innovating raising prices and not innovating raising prices and not innovating because you will come and get chewed you because you will come and get chewed you because you will come and get chewed you you get chewed on from below the you get chewed on from below the you get chewed on from below the innovator's dilemma and people will will innovator's dilemma and people will will innovator's dilemma and people will will take you know take advantage of that.

take you know take advantage of that. take you know take advantage of that. All right. So, those were our three All right. So, those were our three All right. So, those were our three high. I'm sorry, those were our three high. I'm sorry, those were our three high. I'm sorry, those were our three low. And now we're going to look at um low. And now we're going to look at um low. And now we're going to look at um our three high, which are the three our three high, which are the three our three high, which are the three metrics, KPIs that we want to increase. metrics, KPIs that we want to increase. metrics, KPIs that we want to increase. The first is ACV, The first is ACV, The first is ACV, annual contract value. Way to keep your annual contract value. Way to keep your annual contract value. Way to keep your ACV high is to sell to businesses. And ACV high is to sell to businesses. And ACV high is to sell to businesses. And usually it's the larger the better. And usually it's the larger the better. And usually it's the larger the better. And so this is one of those that I was so this is one of those that I was so this is one of those that I was talking about is intention with cost to talking about is intention with cost to talking about is intention with cost to acquire a customer because usually acquire a customer because usually acquire a customer because usually selling to larger customers requires selling to larger customers requires selling to larger customers requires more sales effort and you know has uh more sales effort and you know has uh more sales effort and you know has uh requires more um a higher cost to requires more um a higher cost to requires more um a higher cost to acquire but selling to businesses not acquire but selling to businesses not acquire but selling to businesses not consumers. Um and then you know the consumers. Um and then you know the consumers. Um and then you know the larger the businesses are usually the larger the businesses are usually the larger the businesses are usually the the more they're able to afford um to to the more they're able to afford um to to the more they're able to afford um to to pay more. There's a balance here because pay more. There's a balance here because pay more. There's a balance here because if you do want to go self-s serve and if you do want to go self-s serve and if you do want to go self-s serve and you know you want that one call close, you know you want that one call close, you know you want that one call close, well, you can't you can't sell to well, you can't you can't sell to well, you can't you can't sell to massive Fortune 5,000 500 companies, massive Fortune 5,000 500 companies, massive Fortune 5,000 500 companies, right? Because they're not going to not right? Because they're not going to not right? Because they're not going to not going to be doing it. Another way to going to be doing it. Another way to going to be doing it. Another way to keep your ACV high, annual contract keep your ACV high, annual contract keep your ACV high, annual contract value high is to price based on value value high is to price based on value value high is to price based on value metrics. And that of course is the high metrics. And that of course is the high metrics. And that of course is the high the more value the customer gets out of the more value the customer gets out of the more value the customer gets out of your product, the more they should pay your product, the more they should pay your product, the more they should pay you. And usually with let's say an ESP, you. And usually with let's say an ESP, you. And usually with let's say an ESP, an email service provider, this is based an email service provider, this is based an email service provider, this is based on the number of subscribers they have.

on the number of subscribers they have. on the number of subscribers they have. Or if you're using CRM software, it's Or if you're using CRM software, it's Or if you're using CRM software, it's based on the number of seats, number of based on the number of seats, number of based on the number of seats, number of salespeople because the more sales salespeople because the more sales salespeople because the more sales people you have, you're likely getting people you have, you're likely getting people you have, you're likely getting more value from the software. So pricing more value from the software. So pricing more value from the software. So pricing based on value, pricing based on value based on value, pricing based on value based on value, pricing based on value metric is another ways another way to metric is another ways another way to metric is another ways another way to raise ACV. raise ACV. raise ACV. And as every micro ever has told you, And as every micro ever has told you, And as every micro ever has told you, and hopefully I've told you this enough and hopefully I've told you this enough and hopefully I've told you this enough over the years, you should raise your over the years, you should raise your over the years, you should raise your prices over time. That's just the prices over time. That's just the prices over time. That's just the natural progression of SAS. It's a natural progression of SAS. It's a natural progression of SAS. It's a natural progression of the economy, natural progression of the economy, natural progression of the economy, right? That money becomes less valuable right? That money becomes less valuable right? That money becomes less valuable over time. So even uh you know the over time. So even uh you know the over time. So even uh you know the dollar store is going to raise their dollar store is going to raise their dollar store is going to raise their prices to a buck 25 for everything prices to a buck 25 for everything prices to a buck 25 for everything because because you just have to because because because you just have to because because because you just have to because even small amounts of inflation will do even small amounts of inflation will do even small amounts of inflation will do that. And uh not only that but SAS is that. And uh not only that but SAS is that. And uh not only that but SAS is evolving and getting better over time evolving and getting better over time evolving and getting better over time and so you you you are providing more and so you you you are providing more and so you you you are providing more value and therefore um you should raise value and therefore um you should raise value and therefore um you should raise prices. So ACV was the first in my um in prices. So ACV was the first in my um in prices. So ACV was the first in my um in my three high expansion revenue is the my three high expansion revenue is the my three high expansion revenue is the second one. So every business wants second one. So every business wants second one. So every business wants subscription revenue because it is the subscription revenue because it is the subscription revenue because it is the business cheat code. This is my my business cheat code. This is my my business cheat code. This is my my quote. I've been saying this in all my quote. I've been saying this in all my quote. I've been saying this in all my pricing talks. Every business wants pricing talks. Every business wants pricing talks. Every business wants subscription revenue because it's the subscription revenue because it's the subscription revenue because it's the business cheat code. But we get that for business cheat code. But we get that for business cheat code. But we get that for free with SAS because we have free with SAS because we have free with SAS because we have subscription revenue built in. In SAS subscription revenue built in. In SAS subscription revenue built in. In SAS expansion revenue is the cheat code.

expansion revenue is the cheat code. expansion revenue is the cheat code. That's the thing that we aspire to do. That's the thing that we aspire to do. That's the thing that we aspire to do. The way to get expansion revenue is that The way to get expansion revenue is that The way to get expansion revenue is that as customers get more value out of your as customers get more value out of your as customers get more value out of your product that automatically poof they pop product that automatically poof they pop product that automatically poof they pop up into a higher tier or they pay you a up into a higher tier or they pay you a up into a higher tier or they pay you a little more. Right? So this comes back little more. Right? So this comes back little more. Right? So this comes back to the value metric I talked about to the value metric I talked about to the value metric I talked about earlier. But you can do it with a value earlier. But you can do it with a value earlier. But you can do it with a value metric, you can do it with feature metric, you can do it with feature metric, you can do it with feature gating or you can use uh both. And in gating or you can use uh both. And in gating or you can use uh both. And in fact I just gave a talk about this fact I just gave a talk about this fact I just gave a talk about this that'll we'll probably have up on that'll we'll probably have up on that'll we'll probably have up on YouTube um here in the next couple YouTube um here in the next couple YouTube um here in the next couple months. But um there's a lot more to go months. But um there's a lot more to go months. But um there's a lot more to go into. Obviously, I don't have time to to into. Obviously, I don't have time to to into. Obviously, I don't have time to to talk about now, but um the fact is you talk about now, but um the fact is you talk about now, but um the fact is you want to charge more. You want to charge want to charge more. You want to charge want to charge more. You want to charge more to your customers, but you want to more to your customers, but you want to more to your customers, but you want to charge more to your right customers. And charge more to your right customers. And charge more to your right customers. And you have different segments of customers you have different segments of customers you have different segments of customers that are willing to pay more. And for that are willing to pay more. And for that are willing to pay more. And for those folks, um you got to figure out those folks, um you got to figure out those folks, um you got to figure out what is that value metric or the feature what is that value metric or the feature what is that value metric or the feature gate to get them there. And lastly, the gate to get them there. And lastly, the gate to get them there. And lastly, the sixth KPI, it's the third and the three sixth KPI, it's the third and the three sixth KPI, it's the third and the three high is referrals. And so you want there high is referrals. And so you want there high is referrals. And so you want there to be a lot of referrals because that to be a lot of referrals because that to be a lot of referrals because that natural flywheel of virality or of of natural flywheel of virality or of of natural flywheel of virality or of of constant referrals is a huge it can have constant referrals is a huge it can have constant referrals is a huge it can have huge conversion rates and in fact word huge conversion rates and in fact word huge conversion rates and in fact word of mouth at over time can become one of of mouth at over time can become one of of mouth at over time can become one of your biggest drivers and one of your biggest drivers and one of your biggest drivers and one of certainly one of your highest converting certainly one of your highest converting certainly one of your highest converting drivers. So with referrals like truly drivers. So with referrals like truly drivers. So with referrals like truly having a viral loop is best. So, if you having a viral loop is best. So, if you having a viral loop is best. So, if you uh you know, if you know of Savvy Cow, uh you know, if you know of Savvy Cow, uh you know, if you know of Savvy Cow, it's a Calendarly competitor. Truly, if it's a Calendarly competitor. Truly, if it's a Calendarly competitor. Truly, if you I'm I I'm a customer of Saval, and you I'm I I'm a customer of Saval, and you I'm I I'm a customer of Saval, and when I send out my SavvyCal link to when I send out my SavvyCal link to when I send out my SavvyCal link to people to book time on my calendar, they

people to book time on my calendar, they people to book time on my calendar, they look at it and they think, "Oh, I wonder look at it and they think, "Oh, I wonder look at it and they think, "Oh, I wonder if I could use Savvy, right? They're on if I could use Savvy, right? They're on if I could use Savvy, right? They're on a page. It says powered by Savvy." Like, a page. It says powered by Savvy." Like, a page. It says powered by Savvy." Like, that is a true like built-in virality. that is a true like built-in virality. that is a true like built-in virality. It's pretty cool. Same thing with It's pretty cool. Same thing with It's pretty cool. Same thing with Signwell, uh which used to be called Doc Signwell, uh which used to be called Doc Signwell, uh which used to be called Doc Sketch, but it's electronic signature Sketch, but it's electronic signature Sketch, but it's electronic signature app. you send out the link and people go app. you send out the link and people go app. you send out the link and people go to sign it and they say, "Oh, this is a to sign it and they say, "Oh, this is a to sign it and they say, "Oh, this is a really nice app. Maybe I'll try it." really nice app. Maybe I'll try it." really nice app. Maybe I'll try it." Right? So, having that built in is Right? So, having that built in is Right? So, having that built in is pretty incredible. If you can't do that, pretty incredible. If you can't do that, pretty incredible. If you can't do that, if there's no way for you to get some if there's no way for you to get some if there's no way for you to get some type of virality, um you can ask for type of virality, um you can ask for type of virality, um you can ask for referrals. Usually, if you see people referrals. Usually, if you see people referrals. Usually, if you see people converting and being really happy with converting and being really happy with converting and being really happy with your product, getting onboarded um at 60 your product, getting onboarded um at 60 your product, getting onboarded um at 60 to 90day range, then within a few weeks to 90day range, then within a few weeks to 90day range, then within a few weeks of that, I would have an automated email of that, I would have an automated email of that, I would have an automated email that goes out and says, "Hey, we you that goes out and says, "Hey, we you that goes out and says, "Hey, we you know, so much of our business and is is know, so much of our business and is is know, so much of our business and is is based on referrals. If you're really based on referrals. If you're really based on referrals. If you're really enjoying it, could you please refer a enjoying it, could you please refer a enjoying it, could you please refer a customer, could you please pass this customer, could you please pass this customer, could you please pass this along? Could you please make an, you along? Could you please make an, you along? Could you please make an, you know, you get figure out your ask there? know, you get figure out your ask there? know, you get figure out your ask there? Um, there is a way to measure virality Um, there is a way to measure virality Um, there is a way to measure virality and it's the viral coefficient, right? and it's the viral coefficient, right? and it's the viral coefficient, right? It's a number of new customers generated It's a number of new customers generated It's a number of new customers generated by one satisfied customer. A lot of by one satisfied customer. A lot of by one satisfied customer. A lot of businesses, hard to bake the virality businesses, hard to bake the virality businesses, hard to bake the virality in, but um but that that's where we are.

in, but um but that that's where we are. in, but um but that that's where we are. So again, the six SAS metrics KPIs you So again, the six SAS metrics KPIs you So again, the six SAS metrics KPIs you should be tracking. There's the three should be tracking. There's the three should be tracking. There's the three low, which are cost to acquire customer, low, which are cost to acquire customer, low, which are cost to acquire customer, sales effort, and churn. And then the sales effort, and churn. And then the sales effort, and churn. And then the three high is annual contract value, three high is annual contract value, three high is annual contract value, expansion, revenue, and referrals. expansion, revenue, and referrals. expansion, revenue, and referrals. Thanks so much. We have some great Thanks so much. We have some great Thanks so much. We have some great questions from the live stream audience. questions from the live stream audience. questions from the live stream audience. Chris from microcom connect. Yeah, if Chris from microcom connect. Yeah, if Chris from microcom connect. Yeah, if you're not in micro connect, you should you're not in micro connect, you should you're not in micro connect, you should head to microcom connect.com. There's a head to microcom connect.com. There's a head to microcom connect.com. There's a microcom on air channel and that's where microcom on air channel and that's where microcom on air channel and that's where we are hanging out and producers is we are hanging out and producers is we are hanging out and producers is monitoring for questions. I think if monitoring for questions. I think if monitoring for questions. I think if you're also watching live on YouTube, you're also watching live on YouTube, you're also watching live on YouTube, you can post um comments or there's a you can post um comments or there's a you can post um comments or there's a chat there. All right. So, Chris asks, chat there. All right. So, Chris asks, chat there. All right. So, Chris asks, "What's a good tool for calculating one, "What's a good tool for calculating one, "What's a good tool for calculating one, three, and six month churn?" So, any of three, and six month churn?" So, any of three, and six month churn?" So, any of the major metrics dashboards should do the major metrics dashboards should do the major metrics dashboards should do this for you. Um, profit well, um, bare this for you. Um, profit well, um, bare this for you. Um, profit well, um, bare metrics, chart mogul are the three most metrics, chart mogul are the three most metrics, chart mogul are the three most common. And common. And common. And yeah, if you're using, especially, you yeah, if you're using, especially, you yeah, if you're using, especially, you know, if you're using the Stripe know, if you're using the Stripe know, if you're using the Stripe subscriptions, I wouldn't build this subscriptions, I wouldn't build this subscriptions, I wouldn't build this myself anymore. We we with my last SAS myself anymore. We we with my last SAS myself anymore. We we with my last SAS app, we did build it oursel. Um, what app, we did build it oursel. Um, what app, we did build it oursel. Um, what you really want, you don't just want you really want, you don't just want you really want, you don't just want one, three, and six month churn. You one, three, and six month churn. You one, three, and six month churn. You actually want a churn grid or a actually want a churn grid or a actually want a churn grid or a retention grid where you see, you know, retention grid where you see, you know, retention grid where you see, you know, each week people signed up and then how each week people signed up and then how each week people signed up and then how many people are left or sometimes it's many people are left or sometimes it's many people are left or sometimes it's done monthly. And you start to get done monthly. And you start to get done monthly. And you start to get familiar with that and uh and learn to familiar with that and uh and learn to familiar with that and uh and learn to to do that. I'm not sure that all three to do that. I'm not sure that all three to do that. I'm not sure that all three of those metrics dashboards that I named of those metrics dashboards that I named of those metrics dashboards that I named have that, but I know two of them do and have that, but I know two of them do and have that, but I know two of them do and I don't remember which one. Sorry. Come I don't remember which one. Sorry. Come I don't remember which one. Sorry. Come into Microsoft Connect and ask what into Microsoft Connect and ask what into Microsoft Connect and ask what people are using or how you can get a

people are using or how you can get a people are using or how you can get a churn grid. All right. Leo for Microsoft churn grid. All right. Leo for Microsoft churn grid. All right. Leo for Microsoft Connect. Presumably, most people use a Connect. Presumably, most people use a Connect. Presumably, most people use a spreadsheet initially, but at what point spreadsheet initially, but at what point spreadsheet initially, but at what point do you need a tool to help you manage do you need a tool to help you manage do you need a tool to help you manage your metrics? When you were running your metrics? When you were running your metrics? When you were running Drip, what did you use? Yeah, that's a Drip, what did you use? Yeah, that's a Drip, what did you use? Yeah, that's a great question. So, most of these like, great question. So, most of these like, great question. So, most of these like, yeah, cost to acquire would be a yeah, cost to acquire would be a yeah, cost to acquire would be a spreadsheet, sales effort is going to be spreadsheet, sales effort is going to be spreadsheet, sales effort is going to be a spreadsheet, churn is going to be a spreadsheet, churn is going to be a spreadsheet, churn is going to be metrics dashboard, right? You're going metrics dashboard, right? You're going metrics dashboard, right? You're going to wire up Stripe. Uh, annual contract to wire up Stripe. Uh, annual contract to wire up Stripe. Uh, annual contract value will be metrics dashboard, value will be metrics dashboard, value will be metrics dashboard, expansion revenues, metrics dashboard. expansion revenues, metrics dashboard. expansion revenues, metrics dashboard. They should all report on that. And then They should all report on that. And then They should all report on that. And then referrals would be a spreadsheet if if referrals would be a spreadsheet if if referrals would be a spreadsheet if if you're able to track it well. So we did you're able to track it well. So we did you're able to track it well. So we did use spreadsheets. We also built a custom use spreadsheets. We also built a custom use spreadsheets. We also built a custom dashboard um that we call I think we dashboard um that we call I think we dashboard um that we call I think we call yeah it was called faucet um call yeah it was called faucet um call yeah it was called faucet um because drip get it funny they so we because drip get it funny they so we because drip get it funny they so we used we built a custom thing to pull used we built a custom thing to pull used we built a custom thing to pull what data we could when we couldn't get what data we could when we couldn't get what data we could when we couldn't get it from our other metrics but um yeah it from our other metrics but um yeah it from our other metrics but um yeah that's that's where it is. So that's that's where it is. So that's that's where it is. So spreadsheets is where you start with. Um spreadsheets is where you start with. Um spreadsheets is where you start with. Um Chris from Micro Connect said that Chris from Micro Connect said that Chris from Micro Connect said that profit well doesn't do the 136 month profit well doesn't do the 136 month profit well doesn't do the 136 month churn so it must be um chart mogul or churn so it must be um chart mogul or churn so it must be um chart mogul or bare metrics if you're looking for that.

bare metrics if you're looking for that. bare metrics if you're looking for that. Zach from YouTube says with a B2B SAS Zach from YouTube says with a B2B SAS Zach from YouTube says with a B2B SAS that just started out and at around $600 that just started out and at around $600 that just started out and at around $600 MR that wants to apply to tiny seed. MR that wants to apply to tiny seed. MR that wants to apply to tiny seed. What KPI metrics are most important? What KPI metrics are most important? What KPI metrics are most important? That's funny. Nice way to tie that in. That's funny. Nice way to tie that in. That's funny. Nice way to tie that in. Um, yeah, the first pass, honestly, when Um, yeah, the first pass, honestly, when Um, yeah, the first pass, honestly, when I look through applications, I look through applications, I look through applications, all I look at are numbers. I I'll click all I look at are numbers. I I'll click all I look at are numbers. I I'll click through to the homepage and be like, through to the homepage and be like, through to the homepage and be like, okay, I get get a feeling. I want to okay, I get get a feeling. I want to okay, I get get a feeling. I want to make sure this is B2B. Like, if you're make sure this is B2B. Like, if you're make sure this is B2B. Like, if you're really serving consumers, you you get a really serving consumers, you you get a really serving consumers, you you get a ding against you. I don't think we've ding against you. I don't think we've ding against you. I don't think we've we've funded a company yet that is we we we've funded a company yet that is we we we've funded a company yet that is we we do have some very like VSB very small do have some very like VSB very small do have some very like VSB very small business uh oriented but um so the most business uh oriented but um so the most business uh oriented but um so the most important K KPIs that I look at are important K KPIs that I look at are important K KPIs that I look at are churn growth over the past six months churn growth over the past six months churn growth over the past six months because we ask you about that churn because we ask you about that churn because we ask you about that churn and average revenue per user we ask for and average revenue per user we ask for and average revenue per user we ask for it per month but in in essence I multip it per month but in in essence I multip it per month but in in essence I multip I usually multiply my head to get ACB I usually multiply my head to get ACB I usually multiply my head to get ACB Right. Uh expansion revenue we don't ask Right. Uh expansion revenue we don't ask Right. Uh expansion revenue we don't ask for because a lot of people don't track for because a lot of people don't track for because a lot of people don't track but that is something I ask about in the but that is something I ask about in the but that is something I ask about in the interviews. Um yeah so really the six interviews. Um yeah so really the six interviews. Um yeah so really the six things I've listed here I either look at things I've listed here I either look at things I've listed here I either look at in the application or I usually ask in in the application or I usually ask in in the application or I usually ask in the interviews. So if you have high the interviews. So if you have high the interviews. So if you have high lifetime value that means you have low lifetime value that means you have low lifetime value that means you have low churn. If you have high average revenue churn. If you have high average revenue churn. If you have high average revenue per user that means you can potentially per user that means you can potentially per user that means you can potentially run ads and get a payback. That makes run ads and get a payback. That makes run ads and get a payback. That makes sense. Um, low churn and I think is that

sense. Um, low churn and I think is that sense. Um, low churn and I think is that it? I mean there's number of customers it? I mean there's number of customers it? I mean there's number of customers and growth and all that but those are and growth and all that but those are and growth and all that but those are kind of some yeah you know it it all kind of some yeah you know it it all kind of some yeah you know it it all ties into one another right because ties into one another right because ties into one another right because lifetime value is just calculated from lifetime value is just calculated from lifetime value is just calculated from the monthly price and churn and the the monthly price and churn and the the monthly price and churn and the monthly price calculates um your average monthly price calculates um your average monthly price calculates um your average revenue per user calculates to annual revenue per user calculates to annual revenue per user calculates to annual contract value right by multiplying by contract value right by multiplying by contract value right by multiplying by 12. So, the numbers are all related, but 12. So, the numbers are all related, but 12. So, the numbers are all related, but that was a good question, Zach. See if that was a good question, Zach. See if that was a good question, Zach. See if we have any additional questions at this we have any additional questions at this we have any additional questions at this point. point. point. No, I think that's it. I think we uh it No, I think that's it. I think we uh it No, I think that's it. I think we uh it was a good show. I'm enjoying these was a good show. I'm enjoying these was a good show. I'm enjoying these formats. We've done a this is the second formats. We've done a this is the second formats. We've done a this is the second one we've done now where it's more of a one we've done now where it's more of a one we've done now where it's more of a teaching teaching teaching deep dive into something. We don't have deep dive into something. We don't have deep dive into something. We don't have a guest. We haven't had him on the last a guest. We haven't had him on the last a guest. We haven't had him on the last couple couple um live streams, but I'm couple couple um live streams, but I'm couple couple um live streams, but I'm able to really dig into a topic and able to really dig into a topic and able to really dig into a topic and essentially just talk about it in a way essentially just talk about it in a way essentially just talk about it in a way that I think wouldn't necessarily make that I think wouldn't necessarily make that I think wouldn't necessarily make sense to do. Maybe it'll make sense on sense to do. Maybe it'll make sense on sense to do. Maybe it'll make sense on the podcast, but oftent times like, you the podcast, but oftent times like, you the podcast, but oftent times like, you know, that gets a little dry for people. know, that gets a little dry for people. know, that gets a little dry for people. Um, but I do like the idea and the Um, but I do like the idea and the Um, but I do like the idea and the concept of having these more teachable concept of having these more teachable concept of having these more teachable uh videos every now and again. I do uh videos every now and again. I do uh videos every now and again. I do still think we'll have some some guests still think we'll have some some guests still think we'll have some some guests on as well. But with that, let's Oh, no.

on as well. But with that, let's Oh, no. on as well. But with that, let's Oh, no. Another question. Oh, saved by the bell. Another question. Oh, saved by the bell. Another question. Oh, saved by the bell. Yeah, we still have four minutes, so I Yeah, we still have four minutes, so I Yeah, we still have four minutes, so I was going to wrap early. All right. Red was going to wrap early. All right. Red was going to wrap early. All right. Red Tooth from YouTube said, "Is dunning Tooth from YouTube said, "Is dunning Tooth from YouTube said, "Is dunning important for lowering churn rate or important for lowering churn rate or important for lowering churn rate or it's more about product market fit that it's more about product market fit that it's more about product market fit that leads to lower churn?" It's a real good leads to lower churn?" It's a real good leads to lower churn?" It's a real good question, Red Tooth. I'm glad you question, Red Tooth. I'm glad you question, Red Tooth. I'm glad you brought it up. brought it up. brought it up. It's both. So, Dunning is is saves you It's both. So, Dunning is is saves you It's both. So, Dunning is is saves you from um what's it called? It's from um what's it called? It's from um what's it called? It's involuntary turn. And so, yes, set involuntary turn. And so, yes, set involuntary turn. And so, yes, set setting up Dunning is a is a no-brainer, setting up Dunning is a is a no-brainer, setting up Dunning is a is a no-brainer, right? You can use there's Churn Buster. right? You can use there's Churn Buster. right? You can use there's Churn Buster. I think Barometrics has an offering. I think Barometrics has an offering. I think Barometrics has an offering. Profit well. Um, these things are all Profit well. Um, these things are all Profit well. Um, these things are all great. That's involuntary churn. That's great. That's involuntary churn. That's great. That's involuntary churn. That's when it's like, oh, my credit card when it's like, oh, my credit card when it's like, oh, my credit card expired, you know, and I didn't come expired, you know, and I didn't come expired, you know, and I didn't come back and and add it. So, that's a back and and add it. So, that's a back and and add it. So, that's a no-brainer, but that doesn't save you no-brainer, but that doesn't save you no-brainer, but that doesn't save you from like the broader if you don't have from like the broader if you don't have from like the broader if you don't have product market fit, Dunning isn't going product market fit, Dunning isn't going product market fit, Dunning isn't going to save you. If you don't have product to save you. If you don't have product to save you. If you don't have product market fit, onboarding improvements are market fit, onboarding improvements are market fit, onboarding improvements are not going to save you. You know, it's not going to save you. You know, it's not going to save you. You know, it's like they'll get you a little better. like they'll get you a little better. like they'll get you a little better. Like they get a few more people to Like they get a few more people to Like they get a few more people to convert or a few few fewer people to convert or a few few fewer people to convert or a few few fewer people to cancel their account because oh, they cancel their account because oh, they cancel their account because oh, they did get reminded and they came and did get reminded and they came and did get reminded and they came and updated their credit card. But if you updated their credit card. But if you updated their credit card. But if you don't have product market fit, you're don't have product market fit, you're don't have product market fit, you're going to lose them eventually anyway.

going to lose them eventually anyway. going to lose them eventually anyway. And so that is why, you know, product And so that is why, you know, product And so that is why, you know, product market fit is so um such a necessity, market fit is so um such a necessity, market fit is so um such a necessity, I'll say. But I'm glad you I'm glad you I'll say. But I'm glad you I'm glad you I'll say. But I'm glad you I'm glad you brought that up because it's definitely brought that up because it's definitely brought that up because it's definitely something folks should have set up. We something folks should have set up. We something folks should have set up. We built our own dunning. Of course, built our own dunning. Of course, built our own dunning. Of course, showing my age. I don't think any of showing my age. I don't think any of showing my age. I don't think any of these tools had Dunning built in. I'm these tools had Dunning built in. I'm these tools had Dunning built in. I'm pretty sure there was none of Maybe pretty sure there was none of Maybe pretty sure there was none of Maybe Churn Buster was the only one that was Churn Buster was the only one that was Churn Buster was the only one that was there because they've been around the there because they've been around the there because they've been around the longest, but we built our own with Drip. longest, but we built our own with Drip. longest, but we built our own with Drip. Um Leo from Micro uh for MicroM YouTube, Um Leo from Micro uh for MicroM YouTube, Um Leo from Micro uh for MicroM YouTube, how do metrics requirements change as how do metrics requirements change as how do metrics requirements change as you grow? you grow? you grow? Yeah, that's interesting. Usually, Yeah, that's interesting. Usually, Yeah, that's interesting. Usually, usually in the early days, usually in the early days, usually in the early days, in the early days, your churn is high in the early days, your churn is high in the early days, your churn is high because you don't have product market because you don't have product market because you don't have product market fit. Your cost to acquire can be fit. Your cost to acquire can be fit. Your cost to acquire can be tremendous because it doesn't matter. tremendous because it doesn't matter. tremendous because it doesn't matter. You're just trying to scrape and claw You're just trying to scrape and claw You're just trying to scrape and claw and get enough customers that you can and get enough customers that you can and get enough customers that you can have some type of data. Your sales have some type of data. Your sales have some type of data. Your sales effort might be through the roof because effort might be through the roof because effort might be through the roof because the founder might spend 20, 30, 40 hours the founder might spend 20, 30, 40 hours the founder might spend 20, 30, 40 hours closing a sale because you're just closing a sale because you're just closing a sale because you're just trying to learn from these customers. trying to learn from these customers. trying to learn from these customers. You know, an annual contract value might You know, an annual contract value might You know, an annual contract value might be low because you don't have a brand. be low because you don't have a brand. be low because you don't have a brand. No one knows who you are. And so your No one knows who you are. And so your No one knows who you are. And so your your average, you know, your pricing is your average, you know, your pricing is your average, you know, your pricing is low when you start out. It doesn't have low when you start out. It doesn't have low when you start out. It doesn't have to be, but the these are ways like your to be, but the these are ways like your to be, but the these are ways like your metrics can be really ugly the first, metrics can be really ugly the first, metrics can be really ugly the first, you know, six months of a product or a you know, six months of a product or a you know, six months of a product or a year until you start getting more people year until you start getting more people year until you start getting more people in and then you are able to um start e in and then you are able to um start e in and then you are able to um start e edging that pricing up, right? and you edging that pricing up, right? and you edging that pricing up, right? and you learn how to sell it better and you learn how to sell it better and you learn how to sell it better and you learn, oh, we can do a one call or a learn, oh, we can do a one call or a learn, oh, we can do a one call or a zero call close or we only do calls with zero call close or we only do calls with zero call close or we only do calls with people who are going to pay us at least people who are going to pay us at least people who are going to pay us at least 500 a month and everyone else goes 500 a month and everyone else goes 500 a month and everyone else goes straight to um you know a video demo

straight to um you know a video demo straight to um you know a video demo where they they self onboard where they they self onboard where they they self onboard and and then you learn some channels and and and then you learn some channels and and and then you learn some channels and you start building them where your cost you start building them where your cost you start building them where your cost to acquire goes down. Oh, we our to acquire goes down. Oh, we our to acquire goes down. Oh, we our content's starting to catch. We we're content's starting to catch. We we're content's starting to catch. We we're getting a little SEO love, you know, getting a little SEO love, you know, getting a little SEO love, you know, organic love from Google. Suddenly our organic love from Google. Suddenly our organic love from Google. Suddenly our cost to acquire goes down. So that's cost to acquire goes down. So that's cost to acquire goes down. So that's usually what happens if things are going usually what happens if things are going usually what happens if things are going right. If they're going wrong, then they right. If they're going wrong, then they right. If they're going wrong, then they don't change and it stays a mess. Like don't change and it stays a mess. Like don't change and it stays a mess. Like it stays a hot bag of garbage uh the it stays a hot bag of garbage uh the it stays a hot bag of garbage uh the whole time and you just can't you kind whole time and you just can't you kind whole time and you just can't you kind of can't pull them out. But what you'll of can't pull them out. But what you'll of can't pull them out. But what you'll find is that if you know, let's say we find is that if you know, let's say we find is that if you know, let's say we have these six metrics and if um most of have these six metrics and if um most of have these six metrics and if um most of them are moving in the right direction, them are moving in the right direction, them are moving in the right direction, most of them are getting better, you can most of them are getting better, you can most of them are getting better, you can build a pretty good business. And if all build a pretty good business. And if all build a pretty good business. And if all of them are getting better really of them are getting better really of them are getting better really quickly, that's when you we're able to quickly, that's when you we're able to quickly, that's when you we're able to build a rocket ship. You know, it's build a rocket ship. You know, it's build a rocket ship. You know, it's where you tap into, boy, my cost to where you tap into, boy, my cost to where you tap into, boy, my cost to acquire just plummeted because we're acquire just plummeted because we're acquire just plummeted because we're just nailing killing it with SEO. just nailing killing it with SEO. just nailing killing it with SEO. Everyone's self onboarding. We have Everyone's self onboarding. We have Everyone's self onboarding. We have product market fit, so there's no churn, product market fit, so there's no churn, product market fit, so there's no churn, and we're e, you know, edging our and we're e, you know, edging our and we're e, you know, edging our pricing up. So, our ACV is going up and, pricing up. So, our ACV is going up and, pricing up. So, our ACV is going up and, uh, we have expansion revenue. It's like uh, we have expansion revenue. It's like uh, we have expansion revenue. It's like that's that's a rocket ship, right? And that's that's a rocket ship, right? And that's that's a rocket ship, right? And virality add to that. Um, very few virality add to that. Um, very few virality add to that. Um, very few businesses hit all of those. And you businesses hit all of those. And you businesses hit all of those. And you don't have to you don't have to to build don't have to you don't have to to build don't have to you don't have to to build a great business. You know, can you a great business. You know, can you a great business. You know, can you build a half a million dollar million build a half a million dollar million build a half a million dollar million dollar SAS company without all of these?

dollar SAS company without all of these? dollar SAS company without all of these? Absolutely you can. Uh without, you Absolutely you can. Uh without, you Absolutely you can. Uh without, you know, without all these being in really know, without all these being in really know, without all these being in really good shape, you can. Um but it just good shape, you can. Um but it just good shape, you can. Um but it just these m these will help you grow faster these m these will help you grow faster these m these will help you grow faster is really what the the end result is. is really what the the end result is. is really what the the end result is. Thanks to Leo, Chris, Zach, and Red Thanks to Leo, Chris, Zach, and Red Thanks to Leo, Chris, Zach, and Red Tooth for your questions. Those were Tooth for your questions. Those were Tooth for your questions. Those were awesome. Um it's just helpful to hear awesome. Um it's just helpful to hear awesome. Um it's just helpful to hear things that I missed, you know, because things that I missed, you know, because things that I missed, you know, because I put together this outline out of my I put together this outline out of my I put together this outline out of my own head, but it's it's these are really own head, but it's it's these are really own head, but it's it's these are really good and helpful questions and and I good and helpful questions and and I good and helpful questions and and I appreciate you uh showing up and I appreciate you uh showing up and I appreciate you uh showing up and I appreciate you asking them. So with that appreciate you asking them. So with that appreciate you asking them. So with that we are going to wrap for the day. I have we are going to wrap for the day. I have we are going to wrap for the day. I have um a couple videos I want to recommend um a couple videos I want to recommend um a couple videos I want to recommend for you if you want to dig more into for you if you want to dig more into for you if you want to dig more into this topic. The first is called stay on this topic. The first is called stay on this topic. The first is called stay on top of your SAS metrics know what to top of your SAS metrics know what to top of your SAS metrics know what to measure to maintain sustainable growth. measure to maintain sustainable growth. measure to maintain sustainable growth. That's from Craig Hewitt. This is in the That's from Craig Hewitt. This is in the That's from Craig Hewitt. This is in the micro YouTube channel. If you're not micro YouTube channel. If you're not micro YouTube channel. If you're not already subscribed you should head to already subscribed you should head to already subscribed you should head to youtube.com/microcom youtube.com/microcom youtube.com/microcom and hit the like button on this video and hit the like button on this video and hit the like button on this video for sure if you're watching it if it was for sure if you're watching it if it was for sure if you're watching it if it was helpful and then subscribe to our helpful and then subscribe to our helpful and then subscribe to our channel. Um, and oh, both these video channel. Um, and oh, both these video channel. Um, and oh, both these video I'm going to recommend two videos. Both I'm going to recommend two videos. Both I'm going to recommend two videos. Both the names are in the show notes as well the names are in the show notes as well the names are in the show notes as well for this episode. Second one is lessons for this episode. Second one is lessons for this episode. Second one is lessons from SASmetrics of 1,500 companies and from SASmetrics of 1,500 companies and from SASmetrics of 1,500 companies and that's from Patrick Campbell, the that's from Patrick Campbell, the that's from Patrick Campbell, the founder of Profit Well. Videos are in founder of Profit Well. Videos are in founder of Profit Well. Videos are in the show notes. We are having a Black the show notes. We are having a Black the show notes. We are having a Black Friday sale. Black flat Black Friday is Friday sale. Black flat Black Friday is Friday sale. Black flat Black Friday is just two days from now. Our Microconf just two days from now. Our Microconf just two days from now. Our Microconf Europe videos from what is this? Just Europe videos from what is this? Just Europe videos from what is this? Just two months ago, one month. Yeah, it was two months ago, one month. Yeah, it was two months ago, one month. Yeah, it was from last month. Man, time's going so from last month. Man, time's going so from last month. Man, time's going so fast. They are going on sale on Friday.

fast. They are going on sale on Friday. fast. They are going on sale on Friday. They're not previously available. And They're not previously available. And They're not previously available. And you can get 10 talks covering topics you can get 10 talks covering topics you can get 10 talks covering topics from hiring, growing to 5 million AR in from hiring, growing to 5 million AR in from hiring, growing to 5 million AR in two years, pricing strategies, and more. two years, pricing strategies, and more. two years, pricing strategies, and more. Head over to microcom.com to get on the Head over to microcom.com to get on the Head over to microcom.com to get on the mailing list and you will get an email mailing list and you will get an email mailing list and you will get an email for 50% off the videos on Friday. Again, for 50% off the videos on Friday. Again, for 50% off the videos on Friday. Again, those are not available today. We are those are not available today. We are those are not available today. We are literally launching them on Friday with literally launching them on Friday with literally launching them on Friday with a 50% off sale. And then once Black a 50% off sale. And then once Black a 50% off sale. And then once Black Friday is done, they're going to double. Friday is done, they're going to double. Friday is done, they're going to double. They're going to double in price They're going to double in price They're going to double in price essentially. So, if you want those essentially. So, if you want those essentially. So, if you want those videos, I'd recommend it. And as always, videos, I'd recommend it. And as always, videos, I'd recommend it. And as always, thank you to Hey and Stripe. They are thank you to Hey and Stripe. They are thank you to Hey and Stripe. They are our headline partners. They were our our headline partners. They were our our headline partners. They were our headline partners in 2020. They're headline partners in 2020. They're headline partners in 2020. They're headline partners in 2021. And we look headline partners in 2021. And we look headline partners in 2021. And we look forward to continuing to work with them forward to continuing to work with them forward to continuing to work with them again throughout 2022. And their again throughout 2022. And their again throughout 2022. And their sponsorships allow us to to pay for sponsorships allow us to to pay for sponsorships allow us to to pay for salaries and and tools to do live salaries and and tools to do live salaries and and tools to do live streams like this. Obviously, the live streams like this. Obviously, the live streams like this. Obviously, the live stream is free. The YouTube videos, all stream is free. The YouTube videos, all stream is free. The YouTube videos, all the, you know, the those are free. And the, you know, the those are free. And the, you know, the those are free. And so, um, we really thank our headline so, um, we really thank our headline so, um, we really thank our headline partners for supporting independent SAS partners for supporting independent SAS partners for supporting independent SAS founders. It's great talking to you founders. It's great talking to you founders. It's great talking to you again this week. Hope you enjoyed it and again this week. Hope you enjoyed it and again this week. Hope you enjoyed it and we will be back again next week.

we will be back again next week. we will be back again next week. Actually, we'll have another episode. Actually, we'll have another episode. Actually, we'll have another episode. So, talk to you then.