In my last post I wrote about the key SaaS metrics:
- Customer Monthly Recurring Revenue (CMRR),
- Cash Flow,
- Customer Acquisition Cost (CAC), and
- Customer LifeTime Value (CLTV).
It’s a big leap for a software business to go from thinking about Bookings as their main metric… to now these more services-based metrics.
Then that got me thinking… Aren’t these just the exact same metrics that apply to all subscription services businesses?
What about your local health club… that’s a subscription services business. I can’t say I’m an expert in the health club industry… but I bet they also track CMRR, Churn, Cash Flow, CAC and CLTV pretty closely. And similarly Bookings really aren’t what matters: who cares if you signed up 100 new members to the gym this month, if you also lost 150 member who didn’t resubscribe.
If you’re planning a SaaS business, but have more of a software/technology business background… then it might be a good idea to understand a little more about how these other service subscription businesses are run and managed. Come to think of it, I think I will too!
There just might be some really good lessons to be learned…