Setting up Google Analytics goals
Posted: Thu Feb 20, 2025 9:14 am
But with a SaaS business, there are a few more hoops to jump through. If you use a freemium strategy, you need to know the conversion rate from trial user to paying customer. And you need to know the average customer lifetime value.
Then you need to set up different conversion points for free trials and paying customer signups.
How to Measure/Project Marketing Spending Effectiveness for SaaS Companies
If your average customer value is $180 and 20% of them become paying customers, on average a new trial user is worth $36.
Formula : Average Customer Lifetime Value X * 0, % of trial users who convert to customers = Average Trial User Signup Value.
Based on the example here, you can afford to spend up to $35.99 per trial user to convince them to become paying customers and still make a profit. At that point, you can set a Google conversion goal for trial users worth $36.
This metric will allow you to understand whether a campaign is likely to be profitable in the long run or not.
But that theory doesn't always apply , as test user conversion afghanistan phone number data rates can vary from channel to channel.
Measuring Channel-Specific Metrics
While it's essential to have an idea of the average CLV and conversion rates of trial users across all channels, it's also necessary to measure each channel individually.
If you use a CRM like Salesforce, you can automatically tag your customers with the medium or channel they visited from. You can do this with UTM parameters, for example.
You can also create separate landing pages with hidden fields on the signup forms that indicate the channel that sent them.
Why is this important? Because you could end up wasting tens of thousands of dollars on channels that don’t convert trial users into paying customers.
Dean McPherson, co-founder of Paperform.co , found this out the hard way. They were running Google search ads and converting clicks into trial users for just $4 each. When they calculated the ROI based on the average of trial users to paying customers, it made perfect sense to keep going.
Then you need to set up different conversion points for free trials and paying customer signups.
How to Measure/Project Marketing Spending Effectiveness for SaaS Companies
If your average customer value is $180 and 20% of them become paying customers, on average a new trial user is worth $36.
Formula : Average Customer Lifetime Value X * 0, % of trial users who convert to customers = Average Trial User Signup Value.
Based on the example here, you can afford to spend up to $35.99 per trial user to convince them to become paying customers and still make a profit. At that point, you can set a Google conversion goal for trial users worth $36.
This metric will allow you to understand whether a campaign is likely to be profitable in the long run or not.
But that theory doesn't always apply , as test user conversion afghanistan phone number data rates can vary from channel to channel.
Measuring Channel-Specific Metrics
While it's essential to have an idea of the average CLV and conversion rates of trial users across all channels, it's also necessary to measure each channel individually.
If you use a CRM like Salesforce, you can automatically tag your customers with the medium or channel they visited from. You can do this with UTM parameters, for example.
You can also create separate landing pages with hidden fields on the signup forms that indicate the channel that sent them.
Why is this important? Because you could end up wasting tens of thousands of dollars on channels that don’t convert trial users into paying customers.
Dean McPherson, co-founder of Paperform.co , found this out the hard way. They were running Google search ads and converting clicks into trial users for just $4 each. When they calculated the ROI based on the average of trial users to paying customers, it made perfect sense to keep going.