Why and how to audit the SaaS funnel! – WAU

SaaS (Software as a Service) businesses – also known as the subscription model -, which rely on a high volume of customers to succeed, know the importance of having an efficient sales funnel. Since each lead is precious, it is important to audit this funnel to find flaws that undermine […]

Business of the kind SaaS (Software as a Service) – also known as a subscription model -, who depend on a high volume of customers to succeed, know the importance of having an efficient sales funnel.

How each lead is precious, it is important to audit this funnel in order to find flaws that undermine your hard work and hinder business growth.

But, how to do a successful funnel audit and keep your SaaS business crisis-free?

Let’s show you everything you need to know about the subject!

Why worry about the SaaS funnel

For a SaaS business, having an optimized sales funnel is practically a matter of life and death. Why?

The subscription model focuses on generating revenue from monthly fees – often of low value, to attract customers.

So, the profit comes over time, as that clientele increases, unlike a company that gets a large client and already receives a large amount as payment.

In this case, the funnel needs to produce new customers all the time.

If this does not happen, a series of problems can gradually end the company’s health.

Failures in the generation of leads, in the transition from one step to another of the funnel or even in the final conversion of the customers represent only one thing: money being thrown away!

Since we don’t want this to happen, the solution is to do a full funnel audit.

It will show exactly what is the current situation of your business.

Then, based on the problems encountered, you will know what to do so that more customers stay inside and less are “thrown out” of your funnel.

The foundation of everything: KPIs

Since the idea of ​​an audit is to show how your SaaS is doing now, what is the best way to do this? Through KPIs, of course!

KPIs (Key Performance Indicators), or Key performance indicators, serve to show how the company is doing in some of the most important areas for its survival in the market.

There are several KPIs available, and different ways to track them as well.

You can be both generalist – using these indicators to look at the enterprise as a whole – and specific, in order to analyze only some aspects of the operation.

In our case, we will choose some of the best KPIs for a SaaS business and see how important they are to the audit.

The right indicators for your funnel audit

We already know that KPIs are crucial to understanding the real situation of your funnel, but there are so many that it can be difficult to choose.

Of course, the solution is not to try to analyze everyone.

In fact, the choice of few indicators that make the most sense for the type of business – in this case a SaaS – is what makes the difference.

See 4 KPIs that a SaaS business needs to monitor closely to avoid problems:

MRR – Recurring monthly revenue

Recurring monthly revenue, popularly known as Monthly Recurring Revenue (MRR), is about how much money comes in per month in your company with subscriptions.

You need to do an accurate MRR calculation to reflect what really happens.

You need to take into account 3 factors:

  • The revenue brought by new customers, who have just subscribed to the product or service;
  • Cross-selling or choice of better plans by existing customers;
  • Lost revenue from cancellations and return to simpler plans.

So, the calculation is simple:

MRR = New customers + cross-sell – lost revenue

LTV – Customer lifetime value

The customer’s lifetime value (or LTV only) helps to measure how much money will the company earn with each customer for as long as he uses the product.

To do this, just know the average ticket of your customers and the average time of using your product until they cancel the subscription.

For example, if the average ticket is R $ 100.00 / month and customers usually stay for 2 years with the company, the account looks like this:

100 (average ticket) x 12 (number of payments per year) x 2 (number of years) = 2,400.00

Your customers’ LVT would be R $ 2,400.00, that is, this is the total you should expect to receive from each customer, on average.

Take the opportunity to learn how to audit your marketing strategy!
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CAC – Cost of acquisition per customer

The cost of acquisition per customer, or CAC, makes it clear how much you are spending to get each subscriber.

The calculation is also simple:

CAC = total sales and marketing spend / number of customers won

For example, if you spend R $ 10,000 in 3 months and get 50 new customers in that period, you will have the following CAC:

CAC = 10,000 / 50

CAC = R $ 200.00

The ideal is to compare the values ​​of CAC with LTV, to find out if you are not spending too much to get customers and depleting your profit margin.

Bounce Rate

The bounce rate, or Churn, indicates the average cancellations of your product or service, and is critical to identifying problems in the funnel.

But, what does the number of dropouts have to do with the funnel?

The higher the churn, the more customers you need to convert just to balance the account.

Thus, taking care to keep the bounce rate low prevents too heavy a load from being thrown over the funnel and impairs its performance.

3 funnel mistakes you should avoid

Even with all the effort to create the best sales process possible, it is normal for mistakes to happen that end up leaving you farther from having an impeccable funnel.

Therefore, we have separated some funnel errors that you should keep an eye out for prevent valuable opportunities from being wasted.

Here are 3 of these common mistakes and how to avoid them:

Too many steps

The more you complicate the funnel’s operation by adding steps, the less results you will get.

Therefore, the rule is to simplify, dividing the funnel only in the 3 steps already known: top, middle and bottom.

In this way, you will be able to produce personalized content and create a strong relationship with at every step with the leads, until the sale is complete.

Failure to transition from one stage to another

Lead nutrition plays a key role in smoothly transitioning from one stage of the funnel to another.

But many fail because they don’t know what to do or take too long to act.

Knowing how each step of the funnel works will help you to have no doubts about what to do when guiding the lead through it.

Not having a recovery plan

It is inevitable to lose leads along the way.

Each person’s decision process is different, and however personalized your funnel may be, you will still see people giving up on the process.

However, this is no reason to give up.

Bet on remarketing to recover lost leads.

Just as they lost interest, they can be attracted again with the right incentive.

3 tips to get the most out of the funnel

By using good KPIs and paying special attention to the most common mistakes, you will already have good results, without a doubt.

But how can you further improve the funnel performance?

Some practical steps will help you get the most out of the leads you worked so hard to attract, and win more customers as a result. See 4 tips:

Stay focused on the persona

It is very important that you always revisit your personas and never lose focus when working with the funnel. After all, it is for them that you are directing each action.

Keeping the persona in mind at all times will not go off track, either when producing content, promoting it or performing any other marketing and sales action.

Chat with visitors and customers

Talking with customers is essential to get relevant ideas and opinions about your product and even about internal processes.

This kind of feedback helps to define changes– some subtle, others large – that will positively affect the profit of the operation.

In what ways can you do this?

From simple questionnaires on your website to brief interviews by email, message or video conference.

What really matters is listening to what customers and visitors have to say!

Bet on marketing automation

Marketing automation is one of the most incredible features when it comes to optimizing results and decreasing manual work.

Thinking about it, choose good tools and learn more about what is involved in marketing automation, to take your business even further.

When running a subscription business, making important decisions quickly is a must.

The funnel audit provides a basis for you to do this accurately, avoiding waste and frustration.

On the contrary, by following the tips we show you here, you will see your customer base increase every day.

And you, how do you usually take care of your sales funnel? Have you had success with any of the tips shown here? Tell us, leave your comment!