8 SaaS Marketing Metrics Every SaaS Marketer Needs to Know

February 16, 2017 Andy Beohar

SaaS.jpgMost SaaS companies are familiar with tracking SaaS metrics or key performance indicators (KPIs) for their business, but marketing KPIs are a different story. Establishing and tracking the right marketing KPIs for your business is vital for understanding and improving the success of your marketing campaigns.

Below are 8 important SaaS marketing metrics that every SaaS Marketer should know about (and every SaaS company should track):

1. Unique Visitors

Some companies make the mistake of reporting traffic instead of tracking unique visitors. While traffic shows you the number of visits, unique visitors show the number of unique individuals who are coming to your website in a given period of time, which gives you a better understanding of your overall traffic.

Though this metric does not give you any indication of whether or not these are quality visitors, it does allow you to understand a little more about the accessibility of your website. This SaaS metric also allows you to see how visitors are getting to your site, which is helpful in optimizing your digital marketing strategy. For instance, you can track how many unique visits are coming from organic search, direct traffic, social media, email campaigns, or paid media efforts.

With this information in our hands, we can then identifying which of these channels works the best and which work the worst. We can also identifying which methods are performing best and use the data centric approach to further refine them. For example, say we have a new email campaign that is outperforming all the others. By analyzing the content and topic of the email, and the subject line, and then comparing that to our other campaigns, we can start to point out which elements contributed to its success. Alternatively, if we find out that a certain social platform works better than the others, we can run paid search campaigns to further solidify results.

2. Leads

Leads is a broad term, and it really is up to your team to determine what the difference between a “lead” and a “qualified lead” is for your company.

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Typically, “qualified  leads” (either Marketing Qualified Leads or Sales Qualified Leads) are hot leads because they are closer to the bottom of the marketing funnel.  These individuals have been nurtured by the sales or marketing team and are close to converting. We’ll talk more about qualified leads in the next section.

A regular lead is a warm prospect.  These people have interest in your brand but have not yet shown direct interest in your service. For instance, they may have read some of your blog posts, watched your videos, or checked out different pages on your website, but they have yet to reach out or fill out a form.

3. Qualified Leads

In addition to tracking all the leads at the top of the funnel, you will also need to track and measure your qualified leads. These are typically broken down into two groups – Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs):

  • MQLs are leads that have taken further steps to show their interest in your brand such as visiting your website a specific number of times or downloading a certain number of materials. These leads have identified themselves as ideal prospects.

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  • SQLs are even more qualified than MQLs as they are past the research stage and have already started to evaluate different software that may meet their needs. These are individuals who the sales team has determined are ready for a direct follow-up from sales.

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Again, it is up to your marketing and sales teams to determine what an MQL and an SQL looks like. Consider what types of actions taken by the customer might constitute them ready for targeted marketing content or a direct sales follow-up, and use those for tracking MQLs and SQLs. Tracking these leads will help you best nurture them in a manner that’s appropriate to their individual conversion stages.

4. New Customers

Though revenue is typically the more important of the SaaS metrics than new customers, tracking how many new customers sign up to use your service is still helpful. This metric allows you to see how often you are able to close the sale and just how addressable your market is.

You can track new customers for the month, quarter, and year. Then compare new customer acquisition across periods of time to determine if your team is improving month over month, quarter over quarter, and year over year. This metric is also vital to understanding seasonal or cyclical trends.

5. Unique Visitor to Qualified Lead Rate

Earlier, we discussed the importance of tracking unique visits to your page. It is also important to look at how many of your website’s  monthly unique visitors  actually interact with your site and become qualified leads. Do these visitors look at one page and abruptly leave? Or do they stay to look at multiple pages and return later for more information?

Once you have determined the percentage of unique visitors that turn into qualified leads, you can start A/B testing to see which factors may influence your conversion rate. This can help you improve the user experience and allow you to find ways to move customers through the funnel more efficiently and quickly.

6. Qualified Lead to Customer Rate

The ultimate goal of your overall marketing efforts is to drive customers. The qualified lead to customer rate allows you to see how well you are doing this. This SaaS marketing metric will show you how well you are generating sales-ready leads over time.

Just as tracking how many unique visitors convert into qualified leads can help you find ways to improve conversion rates, so can tracking the number of qualified leads that become customers. If you start to see improvements or declines over time, this could be an indication that your team needs to revisit their tactics and see what is going well (and not so well).

7. Churn

Churn is a vital metric for SaaS companies to measure. This metric shows you how much business your company has lost over a certain period of time. Churn is often expressed in terms of customers or revenue. To measure your churn rate based on customers, take the number of customers that you had at the beginning of the month and subtract those you lost during that month.

Though churn rate certainly impacts more than one area of your business, such as customer service or development, this metric is also important for your marketing team. If marketing is focusing on marketing to consumers who don’t really need your service, this will increase your churn rate and could be disastrous for your business. Churn is a natural part of any business, regardless of industry. However, a high churn rate may indicate that there are important issues your company needs to address.

8. Customer Lifetime Value

The customer lifetime value (CLV) is the average amount of money that your customers pay over the course of their relationship with your company. This metric can help you better understand if you have an effective strategy for business growth. This is also an important metric to use when looking for investors as it helps show the value of your company.

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To determine this metric, start by calculating your average customer lifetime: 1/customer churn rate (in month or years). Then, once you have the average customer lifetime, you multiply this number by your average revenue per account (ARPA) over a given period of time. The ARPA can be fund by dividing your total revenue by the total number of customers. Finally, multiply the customer lifetime by the average revenue per account and you have your customer lifetime value.

Conclusion

Monitoring these eight SaaS marketing metrics will help you better understand the changes in your website’s data and figure out how to better control them. In just a matter of time, you’ll start to notice the positive changes in your number of leads and in your ROI. For any company in any industry that wishes to achieve a high level of success, these aren’t just tips—they’re necessities.

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