How Benchmarking Against Industry Standards can Help Improve Retention and LTV?

Read time: 3 minutes.

Welcome to the 37th edition of The Growth Elements Newsletter. Every Monday, I write an essay on growth metrics & experiments and business case studies.

Today’s piece is for 5,100+ founders, operators, and leaders from businesses like Shopify, Google, Sage, Hubspot, Servcorp, Zoho, Apollo, and more.

Happy Monday!

Benchmarking against industry standards and peers helps assess performance.

► Once the user/customer is acquired, retaining and increasing the LTV over time is essential.

► Thus, it is vital to monitor retention metrics and industry benchmarks daily, weekly, and monthly and adapt retention strategies to sustain growth.

► Note: these benchmarks must align with your startup growth stage and industry.

Let’s look at the retention metrics first:

[1] For SaaS startups, standard metrics include Monthly Active Users (MAU), Daily Active Users (DAU), and Churn Rate.

[2] In e-commerce, metrics like Repeat Purchase Rate and Customer Lifetime Value are crucial.

[3] Early-stage startups may focus on user engagement and stickiness metrics.

[4] Mature companies should prioritise reducing churn and increasing loyalty.

► Earlier this year, I came across Varos software and have been using it for a while now.

► Their platform gives key insights, benchmark comparison and data signals around key metrics.

► Using that, I can build multiple hypotheses, test, validate and capitalise on growth opportunities.

► It helps me see how the performance stacks up against our competitors.

► It also helps compare KPIs anonymously and securely with companies in the same vertical and spend level as ours.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintan Maisuria