conversion rate optimizationgrowth hackingsaas growth hackingsaas marketingsaas metrics

List of SAAS Metrics to measure your SAAS growth and Marketing performance

By March 8, 2018 No Comments

SaaS startups are very complicated in comparison to the traditional form of businesses. For SaaS companies, measuring growth and their sales performance is not easy like it is for the regular companies. So the SaaS business owners keep on finding the practical ways of measuring its performance and value.

All the businesses are based on the customer behaviour and their commitment to the business services.  If the customer is satisfied, then they will stick around with the industry and helps in its growth whereas if in case the customer is not happy then they will increase the companies churn rate and make a loss to the business as the business will lose the investment they have made to acquire the customers.

SaaS businesses are also acting upon the three main principals, which are as follows customer acquisitions, customer retention, and customer monetization. Most of the SaaS companies also struggle to predict the growth and profitability of their business.

To make your SaaS Company successful, you just can’t rely on the various growth hacks or retaining strategies as you have to keep on measuring your business growth performance on timely basis. As you also have to implement some data-driven decisions in your marketing, sales and services management of business operations.

So, therefore, it is essential for the SaaS startup to measure their growth and performance at regular intervals, so that to take the necessary initiatives for converting the favors into their corner to make more profit or income.

For your ready reference, we have curated a list of key metrics which helps every SaaS startup to measure and track their growth and performance.

  1. Monthly Unique Visitors

A monthly unique visitor is a term which is used in Web analytics; it refers to an individual who visits a particular site during a given period. In regard to multiple visits in a month caused by a single individual to a  website by using the same devise and browser than it is still counted as one or unique visitor.

Analytical tools are used by the businesses to measure or track the unique monthly visits by refining the different dates and comparing it with the different time periods.

Such tracking also helps the marketers to understand the behaviour of the website users. It further makes them measure their marketing campaigns and its related activities efforts and performance.

It is one of the key metrics which is further classified under the marketing metric of an essentials business operation helps in converting the potential customers into the paying one.

The tools which are used to measure the monthly unique visits are:

  • Google analytics

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the monthly unique visitors, so few of them are:

–    By Improving the SEO pages

The Business should enhance and optimize the website content in the search engine and makes it more interesting, knowledgeable and useful for the users or visitors which attracts the maximum visitors.

–    By increasing the viral signups

Every site takes the necessary information from its visitors which involves the details like name and email address. But the business should experiment more with such subscriptions. As by introducing the viral signup forms which include the process of sharing the sign in forms of new signees with their friends. It provides an ample opportunity for your business to find the potential leads.

–    By generating video marketing

Video marketing is more efficient than any other form of marketing. As per research, it has been concluded that video put more impact on the audience’s mind than any text and images. An appealing video on the landing page of your business website helps in increasing the website traffic.

–    By generating interesting and fun surveys

Fun surveys are interesting for all. To create such exciting studies for the user’s which helps you to know your customer in a better way. It allows you to know about the interest, habits, styles, and approaches of the customers which further enables you to create a marketing program for your product.

  1. Free Trial Signups

Free trial signups are the website subscriptions offered by the particular site to the page visitor so that they can use the services they offer.

As it is one of the most critical and essential metrics used by such businesses to generate more traffic for their businesses as it provides a base for the company. It further helps in converting the prospects into the paid ones.

The marking tools powered by Google or Adobe are used to measure this metric. They help in tracking daily, weekly or monthly data of the site in measuring that how many visitors have further opted for the free trial signups on the site .It also helps in knowing the number of times visitors pay visits to a site too. It is one of the most important ways for the SaaS businesses to win leads which can further be converted into the paid customers.

The number of marketing automation tools used by the setups to measure their growth with the free trial sign-ups are:

  • Google Analytics
  • Adobe analytics
  • Hub Spot analytics
  • Mix panel

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the free trial signups, so few of them are:

–    By offering discounts to share

Social proof can be hard to come by – unless you incentivize it. To grow your social media following, and attract new visitors to your website, try offering a 5% or 10% discount for users that share your landing page on Twitter, or like your Facebook page.

–    By simplifying the sign-up form

Make your signup forms more simple and easier for the visitors instead of more detail and elaborate wordings. As it will convert the site visitors to take the free trial signups too.

–    By offering the limited period special offers

Make use of this growth strategy where offer a specialize offer to the visitor for the free trial. Such as “100 limited trial signups just for you.”

–    By offering chat assistance

Try to convert the visitor into the potential lead by offering chat assistance available at the homepage which helps in guiding the visitor thought trail sign up and also clear all their quires which resist them form signing up.

–    By generating viral contents

Promote your brand or product by building a viral content which stands out among all other related materials. So make content by researching the needs or demand of the users. It should be the one which helps the users to feel connected with and also convince them further to take up the free trial up subscriptions of the site.

  1. Paid Signups

Paid signups are the website subscriptions offered by the particular site to the page visitor so that they can use the services they provide by spending a substantial amount. As it is one of the most critical and essential metrics used by such businesses to generate more revenue for their companies as it provides a base for the company. It further helps in converting the paid-up customer into the customer lifetime value for the business.

The marking tools powered by Google or Adobe are used to measure this metric. They help in tracking daily, weekly or monthly data of the site in measuring that how many visitors have further opted for the paid signups on the site.It also helps in knowing the number of times accounts the user is taking the paid services to a website too. It is one of the most important ways for the SaaS businesses to earn or add benefits for a long time.

The number of marketing automation tools used by the setups to measure their growth with the paid sign-ups are:

  • Google Analytics
  • Adobe analytics
  • Hub Spot analytics
  • Mix panel

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the paid signups, so few of them are:

–    By sending Customer thank-you cards

Always make use of thank you for the customer whenever they make a purchase or interact with your service or products as it helps in making them related towards your brand. Use the innovative thank you note for this hack.

–    By sending Emails of business achievements

Send the emails across to your customer and leads to your business achievements. Take them always on loop, let them know about your growth which helps in building the trust about your product or brand on them.

–    By making efforts to delight your customers

Make more efforts in making your customer feel unique and essential by making all types of initiatives like providing them instant solutions of their problems, interacting them regularly, by sending them birthday wishes, customizing the discounts rate for them and more.

–    By using the Pricing hacks

Create a pricing page with the most expensive option which helps in making all the other possibilities more economical to the visitor’s which encourages them to spend more time on the website too.

–    By using Left digit anchoring pricing

Use the left-hand digit so that to set the reference for the rest number. As end the number of 9 than a 0 as it encourages more such as Rs. 99 instead of Rs.100 is most engaging for the consumers. So play with the customer’s mind.

–    By using the Decoy price technique

Frame the highest price points in your price structure in a most productive manner than just introducing useless price points into the price structure.    `

–    By shortening the free trial length

Reduce the length of open trails as it helps in increasing the close rates for your business. With an exception that your service or product is quite beneficial for the individuals which lock them to take even after the free trails.

–    By Using discount pricing strategy

Incorporate discounting into your pricing structure which helps in converting the leads. So decide by researching the market of your competition and redefine your pricing strategy.

  1. Product Qualified Leads (PQLs)

It is metric which is based on the product quality and its usage by the users. PQLs means the potential customers who have used the product and reached the predefined level of satisfaction and signifies a substantial likelihood to become a paid or revenue customer for the business. It helps the SaaS model business to pre-qualify the potential customers based on the quality of their product and its usage to them. PQLs are one of the essential metrics which is used by most of the SaaS startups.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the free trial signups, so few of them are:

–    By building a brand name with PR

Build a name for your business brand with the help of the PR’s. Better you should start pitching the service or product to the publicists in your related field with 4000 followers and each time you get a publication, double the count of your followers. Gain recognition for your brand name through the same.

–    By segmenting the press articles

By putting the story of your brand in the section of your segment will make a significant impact on your business growth. It involves writing a short press release, focusing more on your brand value, reaching out to the relevant journalists personally.

–    By offering free membership for bloggers

Involve the great bloggers in your industry to write an effective and efficient review of your product or service with their audiences, and this will bring or attract a bunch of potential traffic. All you need to do is offer them a free membership of your account in return for a review.

–    By introducing the Comment marketing

Make use of comment marketing as a tool for generating more traffic as it is an excellent way of building relations with the new audiences. Read the comments of the users and provide them with the solution of your brand or product.

–    By explaining the product qualities over YouTube channel

YouTube is the most accessible source which helps you to create traffic. Further, it is the 2nd largest search engine with the feature of a video. As we already explained the role and relevance of video marketing. Therefore considering or taking part in YouTube channels will guarantee in generating more traffic. So keep uploading till it gets recognition.

–    By building a Comparison page

Create a direct comparison in between your product and your competitor’s one. It helps in highlighting your strengths and their weaknesses which results in substantial leads as it inspires users to buy from you.

 

  1. Free to paid Conversion rate

Free to paid Conversion Rate is the percentage of users who are converted from the free or trial version of the account to be a part of the paying customer for the business.

It is further measured by dividing the number of new paid customers with the total number of signups recorded in the given period of time.

Which is referred as:

Free to paid conversion rate= Number of paid sign-ups customers/ total number of signups

For instance, if the company had around 3000 signups in a month and out of which 500 has been converted into the paid signs ups than the conversion rate would come around 16%.

500 / 3000 = 16%

It may also be measured on the basis of free trial-up sessions length, as it can be measured that how many users have converted their free trial up an account into the paid signups after the length of the free trial time.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the Free to paid conversion rates, so few of them are:

–    By sending Pop-up messages

If your pages are suffering from an early exists than use the offer technique as create pop up message to the users who click the back button. Hit them with a message promoting a free guide or resource which may help you get their details.

–    By Guiding the potential leads through your funnel

Try working on the customer engagement tools which guides you to do according to the user’s demand.

–    By Using scarcity hacks

Use the scarcity hack which operates in a manner that creates a limited period offer for the potential user’s which helps them to grab the item before it’s too late. So, therefore, increase the conversion rate through such hurry up, l21imited period offers type hacks.

–    By converting the Homepage sign up

Use the homepage as a landing page which explains about the unique value proposition of your product, with a testimonial, and channels the anonymous visitor toward a short but sweet signup form.

–    By implementing the Popup content upgrade

Give the users or people a compelling reason to part with their details or email address. Instead of promoting your daily blog content, use the blog subscription pop-up to develop an exclusive content. Buy generating guides and resources that help the blog subscribers to access too.

–    By customizing the social sharing icons

Social shares make it easy for the visitors to share the content, promote it further to their networks which attract new visitors.

–    By Pre-targeting Emails

Pre-targeting is the step which uses ad retarget so to introduce your brand to the mailing list. Use all your contacts email addresses so to find on social media to raise the awareness about your business.

– By trying from the Social Email pre-targeting

Seek out your mailing list members on the most favoured social media sites, where spend time following and engaging them with your brand account. So start liking or sharing their posts will start building relations with them. So when you target them through the emails, they consider those emails and don’t make them spam.

 

  1. LTV lifetime value of users

It is metric which is used to understand the customer preferences and their choice. All the essential business decisions are based on this metrics as product development techniques, business decisions, sales and marketing programs and more.  It is an estimated profit or average revenue generated by the customer over a specified period of time is measured under this metric. It is also an essential metric which helps in determining the capped value of CAC so to generate profit.

It is measured as:

Customer lifetime value (LTV) = 1/ customer churn rate

It explains as if there is a monthly churn rate than the lifetime is also be measured in months also.

For example- If the monthly customer Churn is 10%, then the Customer Lifetime is ten months (1 / 0.10). And further, if 25% annual customer churn rate is taken than the Customer Lifetime value will come as four years (1 / 0.25).

Further the Customer LTV is also measured by a formula as

LTV= ARPA/ Customer churn rate

For example: If the ARPA is 200 and the Customer Lifetime is ten months, we get the LTV which is 2000.

As the customer churn puts a direct impact on the LTV so if the churn rate is half than LTV will get double.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the LTV, so few of them are:

–    By sending regularly behaviour emails

Retain more customers by sending them the behaviour-based emails. Setup with some software like auto send who will help in tracking the user experience and based on that you can able to send the behavioural emails to your customers.

–    By offering Incentive referrals

Offer the lucrative deals to your customers, as the more they share, the more they get. It helps in generating more leads and traffic as well as helps in customer retention.

–    By tracking the various customers’ success milestones

Track your user’s milestones helps in engaging with them in a most grateful manner which assists in reinforcing the value of your business. It helps in proving that you care about their achievements.

–    By sending some lucrative and useful Physical gifts to users

Engage with your customer by offering them some gifts like t-shirts, etc. which helps in retaining them for a longer time as a customer will feel attached to your brand this way.

–    By attending the customer’s queries

By tracking your existing customers need and demand on time helps you in retaining them for a longer time. It may increase the churn rates for your business to build a specific team of experts who will work on this perspective for your company.

 

  1. Qualified Lead Velocity Rate (LVR)

After we have measured the PQL leads, it comes the LVR rate which shows the monthly achievements or leads of the business.

LVR ration helps in generating the quality business leads which will help in creating the more sales for the SAAS business in the coming years. LVR acts as an excellent tool for measuring or forecasting the future sales of the business.

To calculate LVR, use the following formula:

LVR (Qualified Lead Velocity Rate) = Qualified leads per month- qualified leads previous month/ qualified leads previous month x 100

For example, take 1,100 qualified leads for the month and 1,000 qualified leads from the last month, it shows that the LVR growth is at 10% from one to another. Then assume that the quality of the leads will remain the same for the coming months which helps in forecasting the sales revenue for the future months.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the LVR, so few of them are:

–    By Improving the UI/UX of the business sites

Use the UI/UX hacks by searching the competitor blogs, articles first as it helps you to provide you a better picture to use or improve your UI/UX as it is also a source which engages users.

–    By offering free shipping service to potential customers

Offer the free shipping hack for the users; it is one of the most fantastic marketing hacks for the e-commerce businesses. Set the minimum order amount for offering free shipping or else rise the price of your product so too find an equilibrium among the costs.

–    By becoming more trust-worthy for the leads

Most of the customers trust the online reviews more instead of the peer recommendation. So add more positive reviews about your brand as it creates sales for your business.

–    By sending the Marketing Campaigns emails to all the prospective leads

Stand out with the most innovative and inventive marketing campaigns are designed for the email marketing. And it should be the one who can seek the user’s attention and interests.

–    By lowering down the Contact information form fields

It plays a vital role in identifying the users, and also allows you to customize your marketing activity according to the individual needs. So lower is the contact form fields more will be the submissions rates.

  1. Organic vs. Paid Traffic Rate

Organic traffic is the site traffic which derives from the organic rank of the business on the search engines, and whereas the paid traffic is known as the traffic which derives from the Pay-Per-Click (PPC) ads, purchased ads and sponsored links.

But the main topic of discussion in between both of them is that which provides a more positive result to the business and helps in its growth.

Organic search results are considered as more trustworthy results than any other form. It takes some time and efforts to grow the organic traffic and even it also converts at a lower rate than the paid clicks.

So the SaaS investment depends on the type of results the company requires with the investment amount.

For instance: If the results are required early, and the company is having no budget issue than they should go for the paid search. But in case if the situation is different than the above, the company should focus more on the quality of the content by taking sufficient time and efforts, than organic traffic is a better option.

Whereas, as per the research it has been advised that for the long run of the business it is better to invest into the organic traffic as it is easily accepted by the users and is quite trustworthy among them too.

The business can also adopt the both the traffic generating techniques too.

Then the next step comes about measuring the volume of the traffic generated through the organic and paid traffic channel. For that, the business has to run a test on the keyword research and has to find out the keywords or ad campaigns which all are driving the better business results in the SaaS market.

The tools which can be used to track or measure the performance of these channels are:

  • Hub Spot analytics
  • Google Analytics

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the Organic vs. Paid Traffic Rate, so few of them are:

–    By publishing on Pinterest

If your product has a visual component than you can use a Pinterest platform to create a lot of traffic for your product. As it is a platform which provides an option for the readers to buy or see the product.

–    By Engaging with LinkedIn group

LinkedIn is a professional platform, so it is better to engage with those professionals toward your brand or product. As those are a hard-core professional, who love to share their view or interest to engage with them and let them write reviews on your product which creates traffic.

–    By implementing the WhatsApp’s marketing

Try advertising over WhatsApp regarding your product or brand. As there is an active professional group on the WhatsApp with more than 1 billion active users. And I am sure you are not advertising there. So try it today to generate traffic.

–    By creating attentive headlines

Generate a headline which helps in seeking the attention of all the potential users to come and look into for their details.

–    By integrating the product on social media apps

Try to integrate about your product or brand at the social media apps as such apps allow the API to the third party integration so use that for generating traffic for yourself.

–    By Creating Presentation

It is a hack where the already advantageous published content is republished again in the form of presentation as by using Slide share etc. modes to engage more traffic through such presentations

–    By republishing the material into new or same platforms

Try the content platform like LinkedIn articles, Tumbler, etc. to republish your content again for creating more traffic.

–    By submitting the content as an answer to questions

Answer the question raised on various platforms which are related to your product as it will help the people get an answer to their question and also create traffic regarding your brand too.

–    By creating the Facebook ad

Generate the Facebook ad which must be unique and innovative to engage the perfect users. So work accordingly on such ads. It must be very appealing to the users.

–    By Creating Ads on Google

Use google, the number one search engine to market for yourself, create a google ad for your products which should be very attentive for your user’s to engage their interest.

 

  1. Viral Coefficient

It is metric which term means a Word of mouth marketing method is in general. It is a value which shows the number of new leads can be generated through the referrals of the existing customer base. Through the customer referral program, an excellent product roadmap will be built and which produces more traffic or acquire the number of users for the business which directly supports their growth.

Whereas there is one point that a happy customer will only refer or recommends a product further, so the quality of the service or product do matters a lot in measuring such rate.

Hence, the product which will offer real value to its customers will automatically create more referrals for the business growth. Referrals are then connected with the customer retention too.

Viral Coefficient= Number of active users x average number of referrals x referral conversion rate/ Number of active users

For example, a viral coefficient of 0 implies that none of existing client refers your product further, whereas if a conversion rate of 20% and a viral ratio of 1 implies that on an average each of your existing customers has recommended the business service or product to minimum of their 5 friends or relatives or colleagues.

The same can also be measured as:

Viral coefficient = Invites x conversion percent

Whereas Invites means the no. of invitation, the average user sent.

Conversion percent means the percentage of invitees that convert to the business customer

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the viral coefficient, so few of them are:

–    By proving quality products or services

The business should focus on their product or service quality so that the customer will be satisfied and refers the same to their friends

–    By using multiple channels to get referrals

Use some other channels than only emails referrals to get more traffic as motivating your customer to refer your experience with their friends by phone, Facebook, snap chat or more platforms.

–    By implementing the Influencer marketing technique

Search for the influencer of your industry who can work wonders for you on the various social platforms like Instagram, create your profile which is attention seeker for them. As when an essential person of the industry speaks about your product, it will influence other.

–    By paying the influencers to refer your service to their followers

Use a hack of paying a lucrative amount to the industry influencers who can generate leads for your brand. As make them pretend that they love your product or service which will influence their followers to generate traffic.

–    By offering the incentive referrals programs

Offer the lucrative deals to your customers, as the more they share, the more they get. It helps in generating more leads and traffic as well as helps in customer retention.

  1. Customer Acquisition Cost

It is the cost which is incurred by the company for acquiring customers. In general term, we can say that it is cost related to the sales and marketing.

Whereas the customer referrals and viral customer coefficient are direct by products of exceptional product management and customer attaining strategy. So the revenue which is generated through such referral dilutes, marketing and sales acquisition cost.

The metric is the sum of all the sales and marketing costs which is born to acquire a new customer in also consists of the costs like staff salaries, advertising costs, commission, bonus, and overheads, etc.

To measure the acquisition cost the business has to aggregate all the cost from the QuickBooks and spreadsheets etc. and also include the no. of new paid users who acquire during the period.

It is measured as:

CAC= Total Cost of sales and marketing/ number of deals closed

So to reduce the acquisition cost the business should try using the A/B testing to improve the conversion rates which will maximize the profits.

A business model for the SaaS Company will come down to balance the following two variables:

1) Customer acquisition cost

2) LTV: Lifetime Value of a Customer.

So, in an unbalanced business model, the acquisitions cost will exceed the lifetime value and whereas in a balanced model the situation will be vice a versa.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the CAC, so few of them are:

–    By Improving the Conversion Rates

As the business should try more hard on converting their conversion rates as it helps in minimizing the acquisition cost.

–    By offering referrals

Try to get more referrals paid-up users which helps in minimizing the cost as on the value of one customer the business will acquire more customers.

–    By investing more in Support and on boarding

Try to spend more on the customer support and on boarding process which helps in more customer retention. And more retention will result in more incomes.

–    By using Marketing Automation techniques

Marketing automation helps to grow the businesses in multiple ways. Use the techniques like lead generation, email targeting, etc.

  1. Monthly Recurring Revenue

MRR is considered as a lifeline for the SaaS businesses. It is a metric which helps in measuring the predictable revenue streams that flow in through subscription and additional services.

It is measured by the taking into account the following parameters such as:

  • MRR from renewals
  • MRR from new acquisitions
  • MRR from expansion
  • Revenue Churn

Total MRR is calculated as:

MRR (monthly recurring revenue) = New MRR + MRR from renewals+ MRR from expansion- MRR churn

For example, there are eight customers. 4 are paying 100/month, three is paying 200/month, and one is paying 960/year. First, the yearly billing period needs to be converted into a monthly amount (dividing by 12, which is in this case 80/month). MRR in this example is 1080 ((4 x100) + (3x 200) + 80). Then the same will be divided by the total number of customers.

SaaS Company has to calculate the multiple MRR rates and number depends upon their business complexity. List of different MRR numbers which can be calculated are:

  • New MRR
  • Add-on MRR
  • Churn MRR
  • Net new MRR

So the net new will be measured as:

Net new MRR (Monthly recurring revenue) = New MRR + Add-on MRR- churn MRR

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the MRR, so few of them are:

–    By making efforts to Outreach to the initial customers

Make efforts to reach out to your initial business customers. It helps in retaining them for a longer time. As they are those essential customers, who create value for your business and brand.

–    By taking a follow-up with the every customer interactions

Always take a follow up with your customers after providing them a solution for their issues as it helps in delighting them towards your customer service.

–    By Building an interaction schedule with the customer

Timely conduct the customer interaction with your customer as a part of taking regular follow up from the customer towards the product performance. It also helps the customer to feel attached to the customer service.

–    By bringing Pro-activeness with problems

Always take the customer quires proactively instead of the type of the issues as it helps the customer to feel special instead of making them feel ignored at the time of issue persists.

–    By taking the regular and valuable feedback of user’s

After the purchase always motivates the customer to provide their feedback which results in more traffic and also retaining the existing customers as they feel motivated too.

–    By developing more qualities of product or services

Use the customer views as a source of developing your product or services for the better. It results in engaging the interest of the customers but also helps in building a customer-oriented product which automatically produces more sales.

–    By sending Analytical Emails

Sending a monthly, weekly or daily analytics email to the customer will help in getting them engaged towards your product.

–    By hosting Webinars

Regularly host the webinar to walk our customer through the features of a specification of your product or brand. Or just merely screen shares enough to improve the customer experience.

  1. Net Promoter Score

NPS is the metric which is used to measure customer satisfaction using the customer surveys. It is the most popular metric which measures customer loyalty. The customer rating is also equally important to measure the customer satisfaction rate.

NPS helps to know the likelihood of an existing customer that they will refer that product further or not. NPS is typically using the scale from 0-10, where 0 implies that they never ever recommend the product and 10 means they definitely would do. So it means the higher would be the NPS the happy is the business customer.

The customers are further categorized into 3 types such as:

  • Detractors which scales from 0 to 6 score,
  • Passives which scales from 7 or 8 scores and
  • Promoters which scales from giving a 9 or 10 score.

Whereas the NPS measurement is not as simple as calculating the rating.

The tools used to measure the NPS are:

  • Drift,
  • Delighted and
  • Promoter.io.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the NPS, so few of them are:

–    By Building an interaction schedule with the customer

Timely conduct the customer interaction with your customer as a part of taking regular follow up from the customer towards the product performance. It also helps the customer to feel attached to the customer service.

–    Being Proactive with the customer problems

Always take the customer quires proactively instead of the type of the issues as it helps the customer to feel special instead of making them feel ignored at the time of issue persists.

–    By taking user feedbacks

After the purchase always motivates the customer to provide their feedback which results in more traffic and also retaining the existing customers as they feel motivated too.

–    By educating your users

Providing your users with timely knowledge and expertise they must be requiring in their product use will benefit you in marinating their retention rate. As by recommending them blog posts, books or useful email tips, etc.

–    By improving mails

Improve the welcome email of your brand as it has to be one which makes the customer feel specials. So it has to be exciting and appealing to the customers which helps them to retain for a longer time.

–    By using multiple channels to get referrals

Use some other channels than only emails referrals to get more traffic as motivating your customer to refer your experience with their friends by phone, Facebook, snap chat or more platforms.

–    By providing good customer support

Always make efforts to listen or resolve every query of your customer. No matter how irrelevant it is. It helps in making your customers feel motivated toward your services.

  1. Time ON-Site

It is also a metric which is used to measure the time spent by an average user on the site.

The time people spent on the website is a clear indication of their experience at the business platform.

The value can be taken from two prospects as:

–    The customer is receiving what they are looking for then it directly turns into the favour of the business.

–    The customer behaviour may depend on the factors such as accessibility, usability, and speed; then the metric will help to signify that something is not going according to business plans.

–    If users are abandoning the site without spending enough time on the site that shows that there is something wrong there, which that needs to be fixed.

The tools which can be used to measure the task are:

  • Google analytics

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the time on site, so few of them are:

–    By Tiding Up the site Design

Convince the customer to spend more time on the site by improving the design which attracts them to stay longer.

–    By improving the content of the page

Provide knowledge and concise content which is short yet meaningful to the visitors and attracts them to read and stay at the site

–    By optimizing the images

Use the larger in pixels, pixel density, and file size which looks attractive to the visitors.

–    By adding video’s

Videos are more effective, interactive, and engaging form of content. So add to attract the visitors to stay.

  1. Churn Rate

Churn rate is the rate which measures the proportion of customer who left the business in a given time period. It is often implied as an indicator which explains the customer dissatisfaction.

The greater the churn, the more capital is required for the business just to maintain its revenue. Churn can quickly sink a SaaS company.

The customer acquisition process is far expensive than retaining existing ones. So, therefore the business needs to keep a sharp eye on the churn rate and has to identify the reasons for it.

And to calculate the churn rate, the businesses have to collect the data from all their accounting and CRM system. Based on the definition, the monthly churn can be measured as follows:

Churn rate = (Active cancellations+ passive cancellations) – Win backs/ Total number of paid subscribers at the beginning of the month

For example, if the business acquires 100 customers at the start of a monthly cycle and 10 of them don’t continue further the churn rate is 10%.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the churn rate, so few of them are:

–    By delighting the customers

Make more efforts in making your customer feel unique and essential by making all types of initiatives like providing them instant solutions of their problems, interacting them regularly, by sending them birthday wishes, customizing the discounts rate for them and more.

–    By learning from the churned customers

Make efforts to know the reasons behind the cancelled customer and make necessary solutions so to reduce the same in future.

–    By sending personalized emails to the churn customers

Send a series of emails to your churn customers by reintroducing about your brand and product. Also, make them remind of all the benefits of a product, and convince them to enjoy the service again.

–    By offering the lucrative deals to the churn customers

Provide some lucrative offers to all the churn customers which help in re-engaging them for the future business, as by providing the discount code, free add-on and more.

  1. Customer Retention Rate

Customer retention rate is a metric which indicates the proportion of customers that are continuously using the product or services from a stipulated period of time.

Whereas the opposite of retention is churn. It is a critical factor which implies that business is earning profits and revenues so the rate of retention is directly connected with the business profits.

It is measured as:

CRC= Total retention costs (tools + time+ materials)/ Number of retained customer

The same can be calculated on a yearly or monthly basis.

For example, the customers subscribed at the start of the last month is 100 and the customers who continue to subscribe at the end of last month is 170, then the customer retention rate will be 170 / 200 or 85%.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the CRC, so few of them are:

–    By educating your users

Providing your users with timely knowledge and expertise they must be requiring in their product use will benefit you in marinating their retention rate. As by recommending them blog posts, books or useful email tips, etc.

–    By reducing your Churn rate

Find the reasons which increase the churn rate for your business and then find the alternative solutions to reduce them significantly.

–    By sending the occasional mails to contact your inactive users

Send an informative mail on the occasions offers from your side to all the inactive users which makes them re-engage with your product or service again. Choose the occasions like Christmas, New Year, and any other festivals.

–    By learning from the cancelled customers

Make efforts to know the reasons behind the cancelled customer and make necessary solutions so to reduce the same in future.

–    By improving your “Welcome email.”

Improve the welcome email of your brand as it has to be one which makes the customer feel specials. So it has to be exciting and appealing to the customers which helps them to retain for a longer time.

–    By engaging with your customers on Twitter

Make engagement with your customer on the Twitter will rise the customer expectation and make them feel special. It further creates a bond with them for a long time.

  1. Average Revenue per Customer

It is a measure of revenue which is generated per customer per account. It is based on the monthly basis as most of the business subscriptions are operate on monthly cycles or can also be measured on a yearly or quarterly basis too.

The formula used to measure this metric is:

ARPC= MRR/ total number of customers

One of the good practice is that to measure the ARPC for all the new and existing customers on a separate basis.Wheres, the business has to rely on the accounting system to calculate the same.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the ARPC, so few of them are:

–    By increasing your average transaction size.

Improve the average transaction size of your SaaS business which helps in maintaining the rate.

–    By personalizing your customer service.

Try to get in touch with your customer personally. As it helps in creating the customer retention rate and maintaining their account for a long time.

–    By offering Surprises and delighting your customers.

Depends on the product and services offered, send little gifts of appreciation with elements of surprise and delight to the customers.

  1. ANNUALIZED RUN RATE (ARR)

Annual Run Rate is a form of MRR whereas MRR is measured on a monthly basis and ARR is based on a yearly basis.  It helps in projecting the future revenues for the year whereas there is an assumption attached to the same that there is no change in the year as no churn, no new customers, and no expansion. It is a helpful tool to predict long-term growth and visualize the size of the business.

It is measured as:

ARR= MRR x 12

For Example

If there are 5 customers who all are paying 5 per month, then the MRR would be 25. This would make ARR 300.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the ARR, so few of them are:

–    By bringing Proactiveness with problems

Always take the customer quires proactively instead of the type of the issues as it helps the customer to feel special instead of making them feel ignored at the time of issue persists.

–    By taking the regular and valuable feedback of user’s

After the purchase always motivates the customer to provide their feedback which results in more traffic and also retaining the existing customers as they feel motivated too.

–    By developing more qualities of product or services

Use the customer views as a source of developing your product or services for the better. It results in engaging the interest of the customers but also helps in building a customer-oriented product which automatically produces more sales.

–    By sending Analytical Emails

Sending a monthly, weekly or daily analytics email to the customer will help in getting them engaged towards your product.

  1. SAAS QUICK RATIO

It is a ratio which is specially designed to measure the revenue growth over a relative time with the shrinkage of the revenue within the same stipulated time.

It is measured as:

SaaS Quick ratio= (New MRR + expansion MRR)/ (churned MRR+ Contraction MRR)

So, therefore, higher the value of this ratio shows the healthier the growth of the business.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the quick ratio, so few of them are:

–    By carrying Proactiveness with issues

Continuously take the client quires proactively rather than the sort of the issues as it encourages the client to feel exceptional as opposed to influencing them to feel disregarded at the season of issue holds on.

–     By taking the normal and significant criticism of client’s

After the buy dependably persuades the client to give their input which brings about more activity and furthermore holding the current clients as they feel propelled as well.

–     By growing more characteristics of item or administrations

Utilize the client sees as a wellspring of building up your item or administrations to improve things. It brings about drawing in light of a legitimate concern for the clients yet, in addition, helps in building a client situated item which naturally delivers more deals.

–     By sending Analytical Emails

Sending a month to month, week after week or everyday investigation email to the client will help in getting them drew in towards your item.

  1. BURN RATE

It is the rate at which the companies use their cash over a specified period of time. There are two types of Burn Rate metrics commonly used in SaaS:

  • The Gross Burn Rate which means the amount of money a business spends within a month.
  • The Net Burn Rate which means the amount the business loses within a month.

Whereas the earned revenue is higher than the total amount spent within the month, then the Net Burn will become negative.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the Burn rate, so few of them are:

–     By increasing the business revenue

Identify the way which helps in enhancing the business revenues and increasing the burn rate of the business.

–    By reducing the payroll expenses

Make sure that the efforts are made to reduce the payroll expenses by laying off the unessential staff etc.

–    By reducing the direct costs

Find the ways to minimize the direct costs expenses like direct materials, Consumable supplies, Sales commissions which help in increasing the burn rate

–    By Reducing the other defer expenses.

Find the ways to minimize the defer other expenses which help in increasing the burn rate

  1. EMAIL SUBSCRIBERS

These are the visitors who subscribe the SaaS business Email subscription list for getting the timely newsletter, emails and blog updates.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the E-mail subscribers, so few of them are:

–    By offering rebates to share

Social verification can be challenging to find – unless you boost it. To develop your online networking following, and draw in new guests to your site, have a go at offering a 5% or 10% markdown for clients that provide your greeting page on Twitter, or like your Facebook page.

–     By improving the join shape

Make your information exchange shapes more straightforward and less demanding for the guests rather than more detail and expand wordings. As it will change over the site guests to take the free trial information exchanges as well.

–     By offering the restricted period uncommon offers

Make utilization of this development system where offer a practice offer to the guest for the free trial. For example, “100 constrained trial information exchanges only for you.”

–     By offering to visit the help

Endeavour to change over the guest into the potential lead by offering talk help accessible at the landing page which helps in managing the guest thought trail join and furthermore clear every one of their quires which oppose them shape joining.

–     By producing a viral substance

Advance your image or item by building a viral substance which emerges among all other related materials. So make content by examining the requirements or request of the clients. It ought to be the one which causes the clients to feel associated with and furthermore persuade them further to take up the free trial up memberships of the site.

  1. MARKETING QUALIFIED LEADS (MQLS)

These are leads that will fit the appropriate demographics of the customer, and also demonstrate an interest in the business either by showing the several product based pages on the business website or by engaging with the more product based content offers.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the MQLs, so few of them are:

–    By Improving the UI/UX of the business sites

Use the UI/UX hacks by searching the competitor blogs, articles first as it helps you to provide you a better picture to use or improve your UI/UX as it is also a source which engages users.

–    By offering free shipping service to potential customers

Offer the free shipping hack for the users; it is one of the most fantastic marketing hacks for the e-commerce businesses. Set the minimum order amount for offering free shipping or else rise the price of your product so too find an equilibrium among the costs.

–    By becoming more trust-worthy for the leads

Most of the customers trust the online reviews more instead of the peer recommendation. So add more positive reviews about your brand as it creates sales for your business.

–    By sending the Marketing Campaigns emails to all the prospective leads

Stand out with the most innovative and inventive marketing campaigns designed for email marketing. It should be the one who can seek the user’s attention and interests.

–    By lowering down the Contact information form fields

It plays a vital role in identifying the users, and also allows you to customize your marketing activity according to the individual needs. So lower is the contact form fields more will be the submissions rates.

  1. SALES QUALIFIED LEADS (SQL)

These are leads which meet the MQL defined criteria and have also demonstrated the sales readiness which results in usually by making a request for a sales conversation or a free demo.

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the SQL, so few of them are:

–    By Improving the UI/UX of the business destinations

Utilize the UI/UX hacks via looking through the contender online journals, articles first as it causes you to give you a superior picture to utilize or enhance your UI/UX as it is additionally a source which connects with clients.

–    By offering free transporting administration to potential clients

Offer the free sending hack for the clients; it is a standout amongst the most awesome showcasing hacks for the internet business organizations. Set the base request sum for offering free delivering or else rise the cost of your item so too discover a harmony among the expenses.

–    By winding up more put stock in commendable for the leads

The vast majority of the clients believe the online audits more rather than the associate suggestion. So include more positive surveys about your image as it makes deals for your business.

–    By sending the Marketing Campaigns messages to all the planned leads

Emerge with the most imaginative and innovative advertising efforts intended for email showcasing. It ought to be the person who can look for the client’s consideration and interests.

–    By letting down the Contact data frame fields

It assumes a crucial part in distinguishing the clients and furthermore enables you to tweak your promoting movement as indicated by the individual needs. So lower is the contact shape handle more will be the entries rates.

  1. ANNUAL CONTRACT VALUE (ACV)

It of the value which explains the how the business expenses on various marketing channels or platforms are converted into the sales revenue.

It represents as:

Marketing spend: Annual contract value

The annual contract value is created by looking at the value of the customer’s contract from over the 12 months’ time frame.

For instance, if a customer is committed to a 24-months contract amounting to 60,000, that contract would generate 2,500 in MRR (60,000/24 months) and 30,000 in ACV (60,000/2 years).

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the ANNUAL CONTRACT VALUE (ACV), so few of them are:

–    By Establishing a Sense of urgency

Establish a sense of urgency by offering the limited period trial offers which help in attracting the customer toward the free trail ups. Then create the urge for your product or service to the users by making them fall in love with them by its exceptional quality design. It also forces to take the trails well as then convert them into the paid sign-ups. They feel attached towards your services and can’t resist losing their access to the same at any cost.

–    By introducing the lucrative marketing campaigns

Design and launch your marketing campaigns so efficiently which attracts the customers to attach to your service or product even after the trails end. It will be a lucrative enough, which let them be a paid-up users if they feel satisfied with the services.

  1. CAC PAYBACK PERIOD

Customers will become profitable for the business when they generate sufficient revenues which will able to cover their related acquisition cost of the customer, and further, it will also help in calculating about the payback period of the business in which the business will start earning profits.

The formula for the CAC Payback Period is very simple as it involves as dividing the cost of acquiring a customer with the monthly revenue (MRR)which will be generated, so to measure that how many months will be taken to known when the break-even point will be achieved.

CAC payback period = CAC/ MRR per customer

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the CAC PAYBACK PERIOD, so few of them are:

–    By Building a focus on the “True Evaluators.”

True evaluators are the users who are active and log in and use the services every day. Offer them a discount on subscription which helps them to convert into the paid-up users successfully.

–    By Engaging with Content

Target the free trial up users with the content which they can only access by getting the paid or full subscription so get to engage or create the interest of the same. It helps in converting the free trial ups into the paid ones.

–    By Offering discounts and special packages

Offer the most lucrative and advantageous deals to your free sign up users by sending them a customized emails offering a special discount just for you. It results in engaging their interest in the service or product as they may feel attached to the business. It helps in conversion further.

–    By Showcasing Value

Customers are always looking for benefits at an affordable price. So show them the advantages they can attain by being the part of paid-up members. As articulate your value proposition in such a manner which helps in engaging their interest.

  1. Referral ROI

It is the next step after measuring the referral revenue, so, therefore, the Referral Return on Investment (ROI) is used to compare the total amount that the business is spending on the customer referrals with the revenue income, and then those referrals will generate over the customer lifetime value.

It is calculated as:

Referral (return in investment) = LTV- referral incentive / referral incentive

There are various growth hacks, and strategies which have been used by the SAAS startup to increase the number or improve the SQL, so few of them are:

–    By introducing the Friendly pop-ups

Using pop-up forms are the primary or essential factor which attracts the customer or users for free signup. It is one of the tried or tested strategy. Brands like Amazon, snap deal uses this features as the website get an instant email subscriber using credible, catchy, yet user-friendly pop-ups.

–    By Offering the customize deals and promotions

Make your customer feel special by providing them personalized deals or offers which make them feel attached towards your brand and its value. It is a source which builds a base for your business as it encourages the users for free sign-ups.

–    By identifying the Customer needs

Identify the needs of your user’s and offer them lucrative deals which fulfil their needs or demands as it helps in attracting them for free sign ups as they will feel that their needs are met.

–    By converting the CTA button easy to find

CTA button should always be brightly colored and easily or highly visible to your users which helps them in easy sign-ups.

–    By building a connection with users

Try to build some human contact over the digital platform by using smileys or emoji’s as it acts in proving the human touch to grow the business relationships and encourages the users for free trail ups.

Hence, All the above metrics which we have discussed above shows, that to keep track on the growth and performance parameters of the SaaS business is one of the essential business tasks of the management. It not only helps in identifying the problems or issues related to the companies but also assists in finding the various strategies to be implemented for improving the overall SaaS structure.

Leave a Reply