According to recent findings, 56% of companies worldwide use Software as a Service (SaaS) for everything from customer management to ERP and web hosting.
As the SaaS space grows and competition stiffens, you’ll need to sharpen your overall strategy and nail those SaaS marketing metrics to stay ahead.
This article is a great starting point for learning about important SaaS metrics and KPIs. Let’s get started.
TL;DR – 10 SaaS Metrics That Matter
The marketing metrics for SaaS you should measure are:
- Customer Acquisition Costs
- Customer Lifetime Value
- Customer Churn Rate
- Conversion Rate
- Unique Web Traffic
- Marketing Qualified Leads
- Monthly Recurring Revenue
- Net Promoter Score
- Lead-to-Customer Rate
- Marketing Sourced Revenue
If you’d like to review your current SaaS site before any next step, connect with us for a free, audit of your SaaS website’s SEO health. Our TrioSEO experts will look at your SaaS metrics, identify issues, and suggest a roadmap to boost your rankings and visibility on search results.
How is SaaS Marketing Different?
When it comes to SaaS marketing, considerations differ compared to traditional B2B marketing, as illustrated below:
| Factors | B2B Marketing | SaaS Marketing |
|---|---|---|
| Sales Cycle | Shorter cycle with single sales that repeat for new clients. | Longer cycle, with recurring monthly payments from the same customer. |
| Marketing Approach | Focuses on broad audience reach and quick results. | Relies on data to tailor strategies based on customer behavior. |
| Content Strategy | Uses sales and promotions to attract immediate interest and convert; limited focus on upselling. | Uses demos, tutorials, and support to help users understand the product; actively leverages upselling opportunities. |
| Role of Customer Feeback | Feedback plays a comparatively smaller role. | Proactively seeks and uses feedback to enhance the product. |
In fact, for SaaS websites, SEO – a specialized form of marketing – needs to center on the unique needs of SaaS businesses.
For example, your B2B SaaS SEO must leverage industry terms and niche keywords, including long-tail keywords.
10 Key SaaS Marketing Metrics You Shouldn’t Miss
When checked regularly, SaaS growth metrics help you identify what’s working and what needs a relook to boost your SERPs.
Here are ten essential marketing metrics for SaaS websites:
1. Customer Acquisition Costs (CAC)
One of the key metrics for SaaS companies to monitor is the cost of attaining a new customer so you can decide how much to spend on marketing and sales.
To illustrate, it’s poor business sense to pay $5,000 to acquire a new customer who’ll only spend $500 with your business over time.
2. Customer Lifetime Value (CLV)
It shows how much revenue you can expect from a customer over the course of their time with you. Typically, enterprise customers with big contracts have a higher CLV than smaller businesses with short-term contracts.
While knowing CAC is valuable, understanding CLV indicates if it’s worth the spend.
So, if your CAC is $100 and your CLV is $1,000, you’ll be gaining much more than you spend.
3. Customer Churn Rate
It’s a common SaaS metric to measure the percentage of customers who cancel or don’t renew their subscriptions.
The average annual churn rate for SaaS companies ranges around 5%.
So, if you had 100 customers in May and lost 10 by June, your churn rate is 10%. In sum, lower churn rates mean you have more recurring revenue and happier customers.
You can reduce churn by improving customer support, loyalty programs, and incentives, and offering discounts. Using customer data can also help you tailor communications for audiences.
4. Conversion Rate
This SaaS marketing metric helps evaluate how your landing pages or ads enable visitors to take desired actions, such as signing up for a subscription or free trial.
For example, if 100 people click on your page and 8 fill out your form, your conversion rate is 8%. Enhancing headlines or design may improve this rate.
The ideal conversion rate varies across industries and the phases of the buyer journey.
For example, the best demo conversion rate for SaaS startups is around 10%- 20%.
5. Unique Web Traffic
Tracking unique site visits shows how effectively your site reaches and engages your audience. Based on that, you can gauge your SaaS SEO strategy and lead-gen efforts, and strategize how to optimize these processes to increase the number of unique visitors.
Google Analytics helps you see where visitors come from and how they interact with your site. This metric counts each person only once, even if they visit multiple times.
6. Marketing Qualified Leads (MQL)
Determines prospects who fit your customer profile by showing strong interest, such as filling out a form or downloading a guide. Tracking MQLs lets you see if your marketing strategy is helping you reach the right people.
You can boost your MQLs by nurturing leads with tailored content for different funnel stages and by adding more distribution channels.
7. Monthly Recurring Revenue
MRR is a key SaaS marketing analytics metric showing the monthly growth of your subscription revenues. It helps you comprehend how you attract, retain, and upsell customers.
A positive rate means the revenue and customer base is growing.
8. Net Promoter Score
A metric that demonstrates customer satisfaction, it involves asking customers to rate different product aspects using online survey tools.
You can then categorize their responses into three groups:
- Promoters (9-10): Love your product,
- Passives (7-8): Satisfied but not excited,
- Detractors (0-6): Unhappy and may harm your reputation.
The responses help you assess your business’s health and identify areas for improvement.
9. Lead-to-Customer Rate
Measures how well your prospects turn into paying customers. A higher rate indicates your sales process is working well, while a lower rate might signal issues in your sales funnel.
10. Marketing Sourced Revenue (MSR)
This is a SaaS marketing metric that indicates the profitability of each marketing channel. It helps you understand which efforts, such as organic or paid search, are bringing in the most revenue.
As with other marketing aspects, analyzing key metrics is an important process that helps refine your SaaS product and strategy.
Additionally, SEO processes, including on-page SEO, keyword research, and tracking, work hand in hand with SaaS metrics to boost your online visibility. Explore our processes, which include these best practices to enable smarter decisions for your SaaS business.
Why Measuring the Right SaaS Marketing KPIs is Vital
When you track the right SaaS metrics, you benefit in several ways, some of which include:
- Understand Customers: SaaS KPIs show how customers engage with your products, enabling you to adjust your strategies. For instance, using NPS can help understand customer loyalty and satisfaction.
- Enhance Conversions: Tracking SaaS marketing metrics, such as Conversions, can help identify and improve weak areas to improve conversions.
- Predict Revenues: Metrics such as MSR track revenue growth and support financial projections to ensure business sustainability.
- Track Marketing Effectiveness: Metrics like MQL help you understand the overall impact of your marketing initiatives on lead generation and optimize them accordingly.
Ultimately, when your SaaS company relies on subscription-based payments for revenue, monitoring the right metrics is crucial to fostering customer relationships and driving consistent growth.
Common Challenges in Tracking SaaS Marketing KPIs
Now let’s look at some common issues that SaaS marketers face when monitoring KPIs:
- Accessibility: Manual compilation of reports from various sources is time-consuming and error-prone, delaying important decisions.
- High Costs: Investing in separate reporting tools can be costly, as implementation, maintenance, and the growing volume of data add up quickly.
- Data Inconsistencies: Using multiple software applications for different functions often leads to inconsistent data and undermines the business overview.
- Limited Reporting Capabilities: While a broad overview isn’t enough, advanced reporting takes time and costs more, especially when data is scattered, making it hard to get detailed insights.
Understanding these factors will help you address them effectively and improve the tracking process. You can tackle these issues by adopting integrated tools to quickly and cost-effectively access accurate insights.
How an Agency Can Help With Your SaaS Marketing Strategy
If you’re struggling to manage your SaaS marketing effectively, partnering with an experienced SaaS SEO agency can make a huge difference.
At TrioSEO, our 10+ years of experience and expertise in SaaS SEO can boost your marketing by leveraging in-depth SEO audits and optimization, keyword research services, and analytics.
Reach out to us for our SaaS SEO services to drive targeted leads and high-intent visitors organically.
Frequently Asked Questions (FAQs)
Here are answers to some common questions about SaaS marketing metrics:
What Are the 5 C’s of SaaS?
The 5 essential C’s of SaaS include:
- Customer Acquisition Cost (CAC)
- Customer Lifetime Value (CLV)
- Churn Rate
- Committed Monthly Recurring Revenue (CMRR)
- Cash Flow
How Do You Determine Which Marketing Metrics to Prioritize for a SaaS Company?
When choosing which marketing metrics to use for your SaaS company, consider these factors to align with business goals and support long-term success:
- Stage of your company
- Stage of the buyer journey
- Goals
- Focus
How Often Should SaaS Businesses Review Their Marketing Metrics?
As SaaS subscriptions are usually monthly, check key metrics every month.
However, some metrics, like unique web traffic, may require more frequent monitoring.
How Do Marketing Metrics Support Long-term Growth for SaaS Companies?
SaaS marketing metrics monitor the performance of your marketing channels.
By identifying lead-generating channels and highlighting areas to improve, you can refine your strategy and boost profits in the long term.
Conclusion
Now that you know the key metrics and how to track them, you’re ready to optimize your SaaS website.
Nonetheless, if you choose to focus on your core SaaS product and are looking for experts, our TrioSEO team will provide a comprehensive website analysis, offer keyword ideas, and share the SEO strategy we’d implement. Schedule your free 30-minute consultation today.