A data-driven analysis of a marketing funnel for a SaaS business, including conversion rate benchmarks, cost forecasting, and scenario modeling. This project involved calculating customer acquisition costs (CAC), retention rates, and realistic budgets to assess profitability. The findings helped the client make informed decisions and avoid unprofitable investments.
Objective
The client approached me to act as a fractional CMO, with the initial goal of managing and optimizing advertising efforts. Before executing their strategy, I conducted a thorough analysis of their marketing funnel, unit economics, and potential profitability to ensure the business model was sustainable.
Approach
I evaluated the entire funnel, from awareness to monetization, focusing on: — Conversion rates at each stage. — Average costs associated with user acquisition and retention. — Forecasted profitability based on realistic and industry-standard metrics. Using industry benchmarks and historical data, I calculated the costs of acquiring 1,000 paying users under three scenarios: pessimistic, optimistic, and realistic. This analysis covered: — Cost per impression, install, and retention. — Conversion rates at key stages (installation, retention, and monetization). — Total reach and budget required to achieve desired outcomes.
Conversion Metrics and Cost Analysis
Funnel Stages and Improvement Opportunities
Scenario-Based Forecasting for Customer Acquisition
Outcome
The analysis revealed that under the client’s current business model, profitability was not feasible in the foreseeable future. Using achievable conversion rates and moderate costs, the forecast estimated $333K to acquire 1,000 paying users. This insight allowed the client to reconsider their approach before investing heavily in advertising.