After processing over 400M in sales and being in a unique position to look under the hood of 600+ SaaS businesses, here's what I learned separates those with hockey stick growth/scalability and those that just pitter along…
First – I want to apologize as this is a bit of a RANT, but it’s been something that has been bothering me when I see uber talented Entrepreneurs and killer products that never make it mainstream.
So here we go…
#1. Focusing on Keeping the Customers They Have, Not Generating New Customers
It’s 6-7x more expensive to attract new customers, than maintaining an existing customer.
However, many feel that throwing advertising dollars against the wall to see what sticks, is a better use of company dollars.
The companies that I see creating hyper growth, are the ones who first focus on their existing customers – then worry about finding new customers.
Does it really make sense to continue to acquiring costly new customers when churn is 10-20% or your lifetime value is extremely low?
You end up in a vicious cycle of trying to replenish cancelled customers with new customers – never really moving the needing in your direction.
This leads me to my next point…
#2. Addressing Churn
Imagine if you could cut your churn down from 5% to 2%. While it may not seem like a lot, it can have a major impact on your bottom line.
Say you have 5,000 customers, each paying you $250/month. Assuming you didn’t generate... (More)