Extra Metrics to Monitor
The below metrics also may help monitor the customer’s reaction to your plugin price. For instance, if the LTV / CAC ratio is less than 0 or the churn rate is increasing, these are signals to rethink or optimize your current price and to double-check the product quality.
Customer Lifetime Value (LTV)
LTV is how much you will earn from each customer over the time they spend with your product: Average Monthly Revenue per Customer× (# months) Customer Lifetime = LTV.
Achieving an LTV / CAC ratio of > 1 is good, but not enough. According to Price Intelligence SaaS companies need an LTV/CAC ratio of at least 3:1 to run a successful business and have growth opportunities.
The Churn Rate Formula can be calculated as the number of churned customers divided by the total number of customers, where the number of churned customers is how many people have left your service / product over the period. You may be looking at customer churn over the period of a week, month, quarter, or year.