SaaS companies are often highly driven by data. This can only be a good thing, of course, unless the company is focused on irrelevant KPIs or key performance indicators. There are a variety of KPIs that a company can track. They could come from the company website, social media, sales benchmarks, and more. It’s important for SaaS companies to use KPIs to drive growth because growth keeps them competitive. Market saturation is a critical component of successful SaaS companies and key metrics can help point the way towards success.
But companies need to be careful not to get distracted by irrelevant KPIs. Instead, they should focus on metrics that relate to conversion and revenue on a deeper strategic level. Here are the KPIs that SaaS businesses should prioritize as growth drivers and strategic signposts.
Number of Qualified Leads by Stage
Your funnel has several stages, including marketing qualified lead and sales qualified lead. During each stage of the customer lifecycle, your team should be reporting on the number of qualified leads in each category. This is a complex KPI because it relies so much on customer action. They have to request a demo or a free trial or an eBook, for instance. Refining your funnel is an ongoing pursuit for SaaS businesses. Nurturing leads is a long-term strategy that every business should employ, as studies show that lead-nurturing emails get more than 10x the response rate that standalone emails do.
But weekly and monthly reports on qualified leads, segmented by stage, can help businesses better understand how their funnel is working. If one offering isn’t netting as many leads, then it might be time to focus on something else. These KPIs offer unarguable sources of data that can help guide marketing teams in the right direction. Everybody has had the experience where they create something, get attached to the content, and have to let it go because it’s not performing well. KPIs can help convince marketers that they need to pivot in a new direction.
Most people know that it costs more to acquire a new customer than it does to retain an existing customer. Customer churn is a rate that can be calculated on a daily basis to understand how much business you are losing. If you focus this research on a specific time period or customer segment, you can begin to understand how business choices might be affecting customer retention.
Don’t treat customer turnover as a monthly static KPI. Instead, see how intricately it can be broken apart by time period and by product. Look for trends related to customer persona or demographics. See if there were any seasonal factors that affected the churn rate. It’s a good idea to bring together various departments to share insights and analyze the churn rate. Less churn is good for everyone, and each team plays a role in affecting this KPI.
Customer Engagement Scores
If you have any social media strategists on your team, they are probably reporting back on a weekly basis with engagement metrics. This might include likes, comments, shares, saves, or other statistics from platforms like Instagram, LinkedIn, Twitter, and more. The truth is that some of these metrics matter more than others. It all depends on the strategic purpose of that social media platform in your larger brand strategy.
For instance, Instagram might be a brand awareness project for your company. In this case, likes and impressions are the most valuable metrics. For other companies, Instagram is a key driver of traffic and they expect customers to complete purchases from their mobile phones. As a result, CTR or click-through-rate would be the most important KPI for these companies. Gallup showed that fully engaged customers represent a 23% higher share in revenue, profitability, and relationship growth.
Another aspect of customer engagement is how often they are interacting with your software or product. You should be examining KPIs related to how frequently they log in, how long they stay logged in, and which tasks they complete. If customers use your software every day, they are more likely to stick around rather than churn and learn an entirely new product. This is especially true if they’ve already paid for a subscription. Any changes in customer engagement KPIs indicate a problem worth examining. Businesses can head off future problems by prioritizing engagement KPIs at the first sign of change.
All SaaS companies need to be paying close attention to their website traffic, especially because they’re frequently testing new webpages and copy. Ideally, SaaS should have a website that integrates with HubSpot so that all relevant website KPIs are easily visible on a dashboard. When your team has to go searching to calculate KPIs, it’s more than likely that they will miss a step or miscalculate.
Embedded solutions like HubSpot can help your team get the most accurate read on the company’s web traffic. This information can guide the sales team, web designers, and marketers. Remember, for SaaS companies the website is often the first place that the customer has the option to grow from awareness into consideration. Make sure you’re keeping an eye on website KPIs to maximize this sales opportunity.
These are the four major areas of KPIs that SaaS companies should focus on. There are other metrics like Customer Lifetime Value and Customer Acquisition Cost, but these come after you nail the four metrics listed above. By keeping a close eye on web traffic, customer leads by lifecycle stage, customer engagement, and customer churn, your SaaS business can anticipate any problems early on. Customers make your business possible, so let customer-driven KPIs guide your business strategy.
If you need a website that’s built to convert, talk to HubTheme about a HubSpot-integrated website for your SaaS business. We design with ROI in mind and make sure that clients have access to the KPIs that can drive their business to the next level.