SaaS Customer Lifetime Value Calculator

SaaS Lifetime Value Calculator

What is SaaS Customer Lifetime Value?

Customer Lifetime Value (LTV) is a powerful metric used by SaaS businesses that gives you a clear indication of how valuable a customer is to your company by estimating the average gross revenue a customer will generate before they churn (cancel). Analyzing and understanding this metric can help SaaS businesses develop strategies to acquire new customers and retain existing ones, while also helping making sure the profit margins are maintained.  

Why Should You Care About LTV?

LTV can help businesses align their sales, marketing, and product management processes, which can benefit customers and increase net profits. 

Measuring LTV is also important for measuring ROI for every new customer when used in conjunction with Customer Acquisition Cost (CAC) to estimate sales and marketing budgets. If you are spending more on acquiring a customer than you anticipate to earn from the customer in revenue – that’s bad news. 

How to Maximize Customer Lifetime Value?

Fine-Tune Onboarding

In the life of SaaS businesses, first impressions happen during the onboarding process. Onboarding allows your customers to gain first-hand experience of the product in real time. Roughly 23% of customer churn happens because of poor onboarding. Here are some tips on how to optimize the onboarding process:

  • Keep it simple, easy, and fast.
  • Personalize the onboarding process by collecting user information beforehand.
  • Use guided product tours, interactive videos, etc.
  • Conduct A/B tests to create the best onboarding process for your customers.

Personalized Drip Email Campaigns

Personalized emails can meet and greet customers at any stage in their customer journey. The key is to provide information that helps educate customers on how they can better use the product for maximum benefit or to put their doubts to rest. This can include links to important knowledge base articles, blog links, and case studies of customers who have used the software in innovative ways. 

Omnichannel Customer Support

Offering world-class customer support is one of the best ways to keep customers engaged and satisfied with your product. In today’s world, omnichannel customer support is critical. This means offering support through a variety of channels. For example, live chat, email, phone, app, etc. Live chat is considered one of the most popular and customer satisfying support channels. It provides easy access for customers and allows support reps to help several customers simultaneously.

Ask for Customer Feedback

You won’t learn about what you need to improve if you don’t ask your customers. They can provide quality insights into ways to make the product better, streamline workflows, and make their lives easier overall. 

Once you get customer feedback, act on them! Acting on collected feedback will show customers that you care and may give fleeting customers a reason to stay longer.

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