Five SAAS Business Metrics You Should Care About

How to grow your SaaS business

The software-as-a-service industry, popularly known as SaaS, has seen massive growth in recent years, and it does not look like it will slow down any time soon. However, that doesn’t mean your SaaS business is invincible. Check out the following essential five business metrics you should care about, so you can grow your SaaS business into a more profitable company.

1. Qualified Marketing Traffic

Every business knows the importance of traffic to their website. But you must ensure it is qualified web traffic. That means knowing the visitors to your site are real people who are genuinely interested in your product, rather than paid professionals or bots visiting your site for other reasons. You must generate reports on unique visitors and traffic per channel to ensure you have statistics about qualified traffic, and to target those visitors specifically. But to get visitors to your website in the first place, you need to make sure you follow the best practices for SaaS sites, including creating a unique experience for your target customer. By creating a customer journey strategy and a content strategy, you can target potential visitors much more effectively. 

It is equally vital to make use of advertising technology so you can deliver targeted advertising to your qualified traffic appropriately. AdTech helps you to monetize on customer data by leveraging it for target advertisement placements within online publications, on social media platforms, and other sites.

You might also consider utilizing techniques such as pragmatic marketing to help generate qualified leads. This approach attempts to build products almost precisely as specified by customers, with feedback collected at various stages during product development.  

Although all of those tools are important, you will need to dig a little deeper if you want to stand out of the crowd to gain more traffic. For example, the majority of SaaS websites use log-in links, which means users need to revisit your site each time. That can yield false data regarding traffic growth. It is, therefore, essential you track returning customers independently.

2. Customer Churn

Just because it is essential to obtain new customers to your business, do not overlook your existing customers. Maintaining your current customer base is equally as important. The customer churn rate is one of the most critical metrics in tracking the daily vitality of your business. The rate measures how much business you have lost over a specified period. Following your customer churn rate can save your company from a complete disaster.

3. Revenue Churn

To evaluate the outside impact, some of your customers may have on others; you must measure revenue churn rates alongside customer churn rates. If some customers generate more income than others, the revenue rate can be vastly different from the customer churn rate.

4. Customer Lifetime Value

 The customer lifetime value is the average amount of money your customers spend during their engagement with your business. You can, therefore, obtain an accurate portrayal of their growth by utilizing this metric. To work out your customer lifetime value, divide the number one by your customer churn rate figure.

5. Customer Acquisition Cost

 This metric shows precisely how much it costs to obtain new customers and how much value they bring to your business. By combining the customer acquisition cost with the customer lifetime value metric, you can ensure your business model is viable. To calculate your customer acquisition cost, divide the figure for your total sales and marketing spending by the total number of customers you have acquired within a specific period.