Important SaaS Marketing Metrics You Must Know

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Important SaaS Marketing Metrics You Must Know
At a Glance

Merely creating an impressive marketing plan is not enough for a SaaS enterprise. Regular monitoring of the plan through measurement of SaaS marketing metrics holds the key as it will provide quantifiable data for making the necessary changes. To ensure effective monitoring of a SaaS marketing plan, there are various important SaaS marketing metrics that you must constantly track and monitor.

Reaching the inbox isn’t your goal; engaging people is.

Matt Blumberg

During the refinement of their marketing efforts Darren Chait, COO of Hugo faced a serious problem. The online integrative meeting notes platform was facing issues with its email marketing campaign as the efforts were being made only on an elementary level. But after the management created a goal-oriented campaign that monitored open rates, sign-ups, and conversion rates, it came to realize that some substantial changes are required to make the email marketing campaign more effective.

By introducing refinements through engagement metrics, segmentation metrics, and personalization metrics, the company could send customized and personalized emails to the customers, yielding a significant improvement in the results. Within one month, the company was able to 2x the number of its active users. In a nutshell, Hugo enjoyed a significant improvement in its marketing efforts by undertaking a personalized marketing approach powered by email-based metrics.

Important SaaS Marketing Metrics For SaaS Enterprises

As a SaaS enterprise, you need not focus on everything and try to get everything on board because there are many things that need to be considered. Some companies have their dashboard littered with numbers, and the probability of using them is next to nil. Then there are those SaaS companies that do not have any data or information. They know that the revenue is slowly moving, but they are not sure where exactly the opportunity lies.

So, to enhance the efficiency of your marketing plans, you need to get some clarity and focus, which is possible only through monitoring key metrics. Here are some of the most important SaaS KPI metrics that you just need to monitor to enhance your marketing plans’ efficiency.

Cash Position

Cash is the money in your bank account minus the amount of money that you owe to other people, i.e., the net cash in hand. That is your cash position, which will directly determine the budget for your marketing plan. It is very important to understand this number because if you know the cost to grow and undertake marketing for your business, you need to ensure that your cash position can support these endeavors. Without adequate financial resources to support your marketing campaigns, you cannot expect to achieve the desired results.

Daily Active Users And Unique Users

Whether you are an established SaaS enterprise or a new start-up, you must have a tab on the number of daily active users and unique users accessing the platform. The customers’ activity is determined through the several important actions such as the number of trial logins, interactions in the app, the number of users added to the trial account, etc. You must also consider unique users, as they determine the growth of the company monthly. Unique users can be so much more than just a simple metric. Finding out how you are getting the new unique users will help you concentrate more on marketing for that avenue and get a better return on your marketing spend.

Number Of Trials

Trial sign-ups are one of the most important SaaS marketing metrics. It must be considered as one of the top 3 metrics to monitor. By considering the number of trial users signing-up for your SaaS product, you can plan and expect a certain number of sales. This will help you determine if you are getting the desired results with your marketing efforts. Along with the number of trial sign-ups, you must also monitor the user interaction with the SaaS product to ascertain the features that are being most frequently used. This will allow you to direct your marketing campaigns accordingly.

Lead Velocity Rate

Growth is another important SaaS marketing metric. After all, the entire premise of your marketing campaigns is to generate growth. Lead Velocity Rate helps you measure if your marketing strategies are inspiring growth or not. First of all, deduct the number of qualified leads generated last month from the total qualified leads generated for the present month. Then multiply this number by 100 and divide it by the number of qualified leads generated last month. This will give you the LVR in percentage form.

Retention Rate

It is very important to keep a note of the customer retention rate as it will allow you to calculate a customers’ lifetime value. This will help you estimate the maximum cost per acquisition that you are incurring and make any necessary changes in the marketing strategy.

Churn Rate

There are several different types of churn rates that you must monitor. The easiest one to measure is the last month to this month, i.e., how many customers you have lost in a month, your monthly churn. There are start-ups with higher churn rates, which is a direct indicator of trouble. With a higher churn rate, it becomes difficult to acquire a new customer than to keep one. Therefore, reducing the churn rate is essential to ensure that you hold on to your old customers while getting new ones.

Average Order Value

To calculate the lifetime value, you must find out the average order value of your product. With SaaS, you must make sure the order value increases gradually as the customer moves from essential to premium subscription and is also inclined to sign-up to gain access to other useful features.

Customer Lifetime Value /Lifetime Value (LTV)

After you find out the Retention and Average Order Value, you can now easily calculate your LTV by multiplying those two. Your marketing efforts should always be designed to maximize the customer lifetime value.

Cost Per Acquisition (CPA) / Customer Acquisition Cost (CAC)

 What does it cost to get a customer? All you must know is –

–          The number of paid customers will include the commissions paid to partners, the amount spent on paid ads, and the affiliates’ commission.

–          The number of organic customers will include the customers acquired directly through the website and unpaid marketing efforts.

Add up the total money spent on marketing for the period and divide it by the sum of both the types of customers to determine the CAC/CPA. Many SaaS companies use the 1/3 rule as they allocate 1/3 of LTV to CPA. Funded start-ups can allocate 100% – 150% of ARR for CPA.

Customer Monthly Recurring Revenue /Annual Run Rate (CMRR/ARR)

One of the most important metrics is your Monthly Recurring Revenue or Annual Run Rate. This does not include a one-time setup fee; it does not include equipment; it does not have any other monthly transactions. It can help you determine all the growth rates and get a clearer perspective of your revenue.

Number Of Sales

You must have a track of the users who have upgraded from a trial to a paid plan. This one is an essential metric for your SaaS marketing strategy.

Monitoring these critical SaaS marketing metrics is exceptionally essential for the success of your marketing plans. Use these metrics to draw actionable insights and incorporate them in the marketing plan to achieve long-term growth in the highly competitive market.

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