Saas Reporting Analytics - Guide to New Business Building
Tags: startup
Published: 2023-04-06 15:22:16

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**In today’s digital age, businesses generate vast amounts of data from multiple sources, including customer interactions, sales transactions, marketing campaigns, and website visits.**

However, more than data is needed to drive business success. It would be best to have robust reporting and analytics tools to make sense of the data and turn it into actionable insights. For instance, Churnfree has recently gained popularity as a SaaS reporting analytics tool. 

Churnfree provides businesses with real-time insights into their data, enabling them to make informed decisions, improve performance, and drive growth.

This article will explore the key best practices for implementing SaaS reporting analytics and how they can help you enhance your business intelligence.

SaaS Reporting Analytics and Growth Metrics You Should know
The best approach to prepare the best customer retention strategy is by knowing the basic knowledge of SaaS reporting analytics metrics and how they can help you enhance your business intelligence.

## Churn Rate
The churn rate is the percentage of customers who have stopped using a product or service over a given period. In SaaS, it is essential to track churn rate as it provides insights into customer satisfaction levels. 
To calculate the churn rate, divide the number of customers who have stopped using the product by the total number of customers.

Determine the number of customers who have canceled or not renewed their subscription within a given period. This can be a monthly or quarterly period, depending on the company’s preference.

For example, if a company had 1,000 customers at the beginning of the month and 50 of them canceled their subscriptions during the month, the churn rate for that month would be 5%.

SaaS companies use SaaS reporting tool to track their churn rate regularly and identify trends to take steps to improve customer retention. A high churn rate can indicate that customers are unsatisfied with the service, and the company may need to improve its product or customer support.

## Customer Lifetime Value (CLTV)

Customer Lifetime Value (CLTV) is the total value that a customer brings to a business over their lifetime. CLTV is a critical SaaS reporting analytics as it helps businesses understand each customer’s profitability. 

Calculating Customer Lifetime Value (CLTV) is essential for SaaS companies to understand the overall value a customer brings to their business over time. To calculate CLTV, multiply the average revenue generated per customer by the average customer lifespan. Here are the steps to calculate CLTV:

### Determine the average revenue per customer per month.

This can be calculated by dividing the total revenue earned in a given time period by the total number of customers during that same time period.

For example, if a company earned $100,000 in revenue in a month and had 1,000 customers during that same month, the average revenue per customer per month would be $100.

### Determine the average customer lifespan.

This can be calculated by analyzing historical data to determine how long the average customer stays subscribed to the service.

For example, if the average customer stays subscribed for 12 months, the average customer lifespan would be 12 months.

Multiply the average revenue per customer per month by the average customer lifespan.

Using the example above, the calculation would be $100 x 12, which equals $1,200.Subtract the cost of acquiring and servicing the customer from the result.

This includes all expenses related to acquiring the customer, such as marketing and sales costs, as well as all expenses related to servicing the customer, such as support and development costs.

For example, if the cost of acquiring and servicing the customer is $400, the final CLTV would be $800.

By calculating CLTV, SaaS companies can better understand the long-term value that each customer brings to their business and make informed decisions about marketing, sales, and customer retention strategies. It’s important to regularly review and update CLTV calculations as business conditions and customer behavior change over time.

## Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is the total cost incurred in acquiring a new customer. This cost includes all marketing and sales expenses. It is essential to track CAC as it helps businesses to determine the effectiveness of their marketing and sales strategies. To calculate CAC, divide the total marketing and sales expenses by the number of new customers acquired.

Determine the total sales and marketing expenses for a given period.

This includes all expenses related to sales and marketing, such as salaries, advertising, and promotional expenses.

For example, if a company spent $100,000 on sales and marketing in a month, the total cost of sales and marketing expenses would be $100,000.

Determine the total number of customers acquired during that same period.

This includes all new customers who signed up during the time period.

For example, if a company acquired 1,000 new customers in a month, the total number of customers acquired during that month would be 1,000.

Divide the total cost of sales and marketing expenses by the total number of customers acquired.

Using the example above, the calculation would be $100,000 divided by 1,000, which equals $100.

Read more: https://churnfree.com/blog/saas-reporting-analytics/