As competition rises and innovations continue to persist in the ever-expanding field of SaaS, relying on data to make decisions has proved to be quintessential.
So, in SaaS companies, the marketing team has more tasks beyond lead generation;
It plays the role of supporting growth and retention and increasing the users’ LTV (lifetime value).
In SaaS marketing, detailed insight into engagement and customer interaction is required, along with high-level concepts such as the number of visitors to the website or the number of followers of the company’s social media page.
SaaS organizations are based on a subscription model and subscriptions lead to revenue;
Thus, it becomes essential to track churn along with new and revenue–existing customers to sustain growth in the market.
Any SaaS company must emphasize the following seven essential SaaS marketing metrics for growth.
Whether it is about reducing the customer acquisition costs, enhancing the retention of the existing customers or even underestimating the user lifetime value, these benchmarks can provide practical business choices in the overall marketing strategies.
Let’s reveal the opportunities for your SaaS business to grow!
CAC is the total amount of cost needed to get a customer from the sales and marketing process.
Customer acquisition is the first strategic process of any business, and therefore it has to be effectively developed.
It can help you evaluate the effectiveness of your investments to convert marketing sales to actual customers.
It is useful to maintain this metric so as to prevent the costs of acquiring new customers from getting out of hand as the enterprise grows.
To decrease the values of CAC, the strategies should adopt SEO, content marketing, and social media marketing.
While comparing high conversion opportunities and tuning the look of the sales funnel, several unproductive activities may be removed.
CLV metric represents the total net profit of any customer for the entire duration they are associated with your business.
Through CLV, it becomes possible to equate the cost of claiming new business with the revenue it brings.
CLV enables one to know where to allocate time and money with regard to customers.
To obtain the maximum CLV the work on retaining the customers should be enhanced and there should be changes in the onboarding process and services to be rendered.
It also goes hand in hand with developing long term customer relations as individuals or companies will trust the business.
Besides, focusing on strategies like upselling, cross-selling, and add-ons that align with the customers’ needs can increase revenue per customer.
In the similar manner, to keep the product in use constantly more attention should be paid to feedback received from customers.
Monthly Recurring Revenue or MRR focuses on the cash flow received from clients, and indicates how a business can expect payments from those clients with a subscription program for the next month.
MRR helps to identify multiple revenue sources in addition to assisting evaluate the effect of revenue increase in different advertising platforms.et
To optimize MRR, adopt a multi-tiered price structure to address more diverse clientele that enables you to take advantage of different market segments.
However, there is a need to dedicate more efforts to cross-sell higher-tiered plans to retain customers to upgrade to paid versions and proactively discuss customer challenges, as well as to lower attrition.
The churn rate is simply the percentage of customers who stopped using paid services provided by a particular business for a specific period.
High levels of churn rate reduce the worth of attaining new clients which creates a ceiling for business growth.
It also makes suggestions based on the ratio of customer satisfaction in order to meet the expectations for the intended product.
For effective churn reduction, it can start with relationship building and that can come from effective and efficient onboarding that will help the customer get value from the product within the shortest period of time.
Besides, consistently gather and analyse customers’ feedback regarding recurring issues to satisfy the customer by addressing their pain points.
Also, the idea to use subscription incentives as the method to encourage customer loyalty and their long-term commitment can be an effective idea.
Conversion rate is calculated as a ratio between clients who used a certain web page and made a desired action, including registration for a certain service or making an order, and the total number of people who visited that certain web page.
When you see the conversion rate, you are able to understand how your marketing ideas, landing pages, and sales funnels work for you.
Every percent increase in conversion can have a noticeable positive impact on your business income.
To optimize conversion rates, make signup forms easier to complete so that they do not take much of the customer’s time to fill in the details, and use persuasive writing and specific calls-to-action (CTAs).
It is also good to be diverse with regards to the format of the landing page in a manner that would assist to define which format is optimum for the target audience.
NPS only depicts how satisfied and loyal your customers can be based on the likelihood of the customer spreading the word about your product or service.
Customers with high NPS mean they are happy and can refer others to you hence important in expanding your business.
It also provides the customer’s attitude toward the product and gives recommendations on where you should work to retain your customers.
To improve your NPS, focus on providing great customer service by promptly providing resolution to their issues.
Apart from that, to understand and meet the customer’s needs, regular communication is essential.
Also, it can encourage your consumers to recommend your product to their friends and acquaintances as they get incentives for that.
This metric keeps the record of the number of customers who use your product or service along with the visitors who visit the product’s page at least once a day or a month.
Through active user metrics, it is convenient to understand user engagement as well as retention.
These levels reflect positive product attributes and customer benefits, eventually both of them give a high product value.
It is a necessity to regularly update your product services to keep users engaged and active.
During notifications, campaigns, or in-app messages, you should persuade users about the benefits of the system and how they can help your product by making them use the application regularly.
Also if there are any drawbacks that may hinder satisfactory operation by the customers then they have to be addressed.
The existence of an effective SaaS marketing metrics framework and prior knowledge on how to work on it for improvements is essential for the attainment of growth.
Even though each SaaS development company has different specific objectives or KPIs, global metrics such as CAC, CLV, and MRR give insight into marketing and sales efficiency.
However, these metrics are not independent of each other.
For instance, a reduction in customer turnover or churn and an increase in NPS can develop a compounded effect to contribute to long-term business revenue growth.
In the same way, improving the active user metrics provides an understanding of user engagement as well as retention.
Combined together, the above-listed metrics provide a clear end-to-end check on your SaaS business.
