9 Essential SaaS Marketing Metrics You need to measure
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SaaS, i.e., Software as a Service, enables you to utilize cloud-based applications via internet connectivity. It allows you to subscribe to or rent the apps you require for your organization. As the SaaS service provider handles both the Software and the hardware part and takes care of the security and accessibility of apps, it helps your organization run a process at an affordable cost.
SaaS marketing refers to a SaaS provider’s strategies to promote and generate leads for SaaS products. While there are several SaaS marketing metrics or marketing KPIs that you can track to evaluate the output of your SaaS strategies, you must only track the metrics that matter to your business. These SaaS marketing metrics should help you analyze all the aspects that are in or not in favor of your business. Here are the nine essential SaaS marketing metrics to track for reaching your ultimate target of business growth and revenue:
Customer Acquisition Cost
CAC is the cost to acquire leads or customers. You need to track the CLV (Customer Lifetime Value) metric and CAC to compare how much value customers bring to your business during their entire lifespan. The CAC indicates the money you need to spend to acquire one customer, while the CLV is the amount a customer pays you, excluding service costs.
The formula to determine CLV and CAC is given below:
CAC = (Total marketing cost + Total sales cost)/Customers acquired
CLV = Average revenue per account (ARPR)/Monthly Recurring Revenue MRR %
The number of users who have signed up for your SaaS offerings does not matter as long as they start using it. Activation is when customers start using your products and services and eventually develop trust. Therefore, it is one of the essential SaaS marketing metrics that help you evaluate the growth of your business.
Paid conversion rate
- 0 to 5 – These customers may damage your brand reputation, i.e., detractors by not speaking highly of your SaaS offerings.
- 6 to 8 – These customers may promote your products passively, or at least they will not damage your brand reputation.
- 9 to 10 – These are the promoters, i.e., customers, who will promote your brand and help you acquire better leads in the future.
Annual Contract Value
Marketing Sourced Revenue (MSR)
Funnel metrics: Leads generated through Organic Traffic
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