If you’re operating in the SaaS sector, it can often take longer to see a significant ROI (return on investment) than in other niches. You’re likely investing heavily in initial marketing, sales, and promotions without seeing that investment repaid quickly.
Because of this, it’s perhaps more essential to track and monitor SaaS KPIs and metrics than it might be with other business types. KPIs can point to longer term success and allow you to budget and plan accordingly. It’s also worth looking at how specialists such as accelerate agency can help improve these KPIs.
For a business that relies on monthly payments, this can be a major indicator of whether you’re doing things right or not. Keeping a close eye on the number of customers you lose lets you quickly identify issues.
Cash on hand is an essential measure of the performance of a SaaS business where it may take an extended period of time to see a good ROI. Once cash reserves start building even after covering monthly outgoings, your company is in good shape.
Along with churn rates, this is one of your most important metrics. It lets you see what your guaranteed monthly revenue from existing customers is. It can also be used to track up and cross-selling, new sales, and contract renewals.
Recurring revenue is the foundation of how you operate. By tracking both MRR and ARR, you can gauge your company’s capacity for growth. You can also experiment with different price tiers to see what customers are willing to pay.
Your C-suite will have one eye on current performance and another on future potential. LVR lets you look forwards to see how your organization is growing. It measures the amount of qualified leads you have in any given month.
Where this KPI helps is as a good measure of how well your marketing efforts are working. It’s a metric that’s easily trackable with free tools such as Google Analytics. This is an area where accelerate agency can produce significant increases in your traffic.
Many SaaS companies choose a self-service model to lower CAC (Customer Acquisition Costs). In those cases, signups to a free or discounted trial can be a good metric to measure success. You can boost signups by providing helpful and educational content.
Another important KPI, your CAC can show you how much it’s costing you to acquire a new customer. This should include all costs such as advertising, marketing, relevant salaries, and sales. It’s useful in determining whether you can spend more or have to cut costs.
This should always be examined in relation to CAC. If your CAC exceeds your CLV, then you have a problem. For SaaS models, you need to consider how long a customer has been with you as well as the length of contract that they’ve agreed to.
Monitoring the ROI on your traffic can dictate future advertising and marketing budgets. Organic traffic doesn’t cost you anything (technically), so ROI will always be positive. Non-organic traffic (such as PPC—Pay Per Click ads) costs money, so you should look closely at the results that paid channels produce.
NPS shows you the level of customer satisfaction with your brand and your products. It can help highlight any flaws in your products, services, or customer support so that you can adjust as needed.
Slightly different to MRR, this metric estimates your future revenue if you did no sales or marketing activities. CMRR anticipates changes including cancellations, churn, and up or downgrades, so it can provide a better overview of financial standing.
Identical to CMRR, but used by SaaS companies who offer annual rather than monthly subscriptions.
You’ll likely sell a number of different products and each of those products may have different pricing tiers (basic, gold, platinum, etc.). This metric allows you to measure, usually on an annual basis, what the average revenue per current customer is.
Tracking the number of leads generated and where they’ve come from allows you to see where your primary marketing efforts should be focused. accelerate agency not only helps to increase your traffic but more importantly, convert this traffic to qualified leads.
There’s little that beats old-fashioned word of mouth. You can track this metric by looking at the number of sales that come from direct recommendations from existing clients.
Always vital, conversion rates are also crucial in a SaaS business model. Your leads may come from a variety of sources including blog subscribers, website visitors, and salesperson leads. Track both conversion rates and their source.
Metrics aren’t always about the financial aspects of your business. Tracking the amount of support tickets issued can not only indicate how good your customer service is but also, any common issues or bugs that are occurring. Don’t just look at totals, look for any patterns on a daily, weekly, or monthly basis.
This measures the average response time between a request being submitted and one of your agents responding. Where this can be important is in scheduling agents to be able to handle fluctuations in requests and the ability to scale up.
Average resolution time shows you how well, and how quickly, your agents resolve issues. This metric has a strong correlation to customer satisfaction and can be tied to your NPS.
You may have X current subscribers, but are they all actively using your product? Knowing how many active users you have can be a good indication of the quality of your product and your company as a whole. However, depending on your product, there is no exact good or bad level of usage.
The flipside of your churn rate is your retention rate, a metric that lies at the heart of your company’s success. Identifying a healthy retention rate (whether on a monthly or annual basis) shows that people value your product and company.
PQLs are usually those leads that have taken up an offer to use your product on a free trial. By monitoring and tracking how your PQLs interact with your product, and what they think of it, you can see how many become fully paying customers.
When your SaaS business can upsell or cross-sell, it’s a good indicator that users like your products or services. Monitoring extra revenue from existing customers can be a good indicator of your products’ quality.
You may have segmented your customer base between products, sales channels, or other factors. By analyzing trends within those groups, it can help shape future strategies when it comes to things like marketing or product development.
Here at accelerate agency, we pride ourselves on our ability to provide sustained growth as a SaaS SEO agency through organic marketing channels for our clients. Get in touch using the calendar below to speak to one of our specialists who will be able to advise you as to the best course of action for your website.
Nick Brown is the founder & CEO of accelerate agency, a SaaS SEO agency. Nick has launched several successful online businesses, writes for Forbes, published a book and has grown accelerate from a UK agency to a company that now operates across US, APAC and EMEA and employs 160 people. He was also once charged at by a mountain gorilla