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The Software-as-a-Service (SaaS) market is becoming more and more competitive with every passing day. The SaaS marketer must continuously adapt to market changes and correct the course as needed to stay relevant. A data-driven marketing approach can help in doing just that! Here are six metrics that firms should consider tracking to ensure marketing efforts and resources are headed in the right direction.
1. Collect Raw User Behavior Data
Standard solutions like Adobe Analytics and Google Analytics can help in analyzing visitors’ activities in the marketing areas of websites. However, these tools cannot assist in collecting data from secure member areas. That’s because these areas may also contain personal financial data, and they cannot be monitored due to sectoral laws.
SaaS companies need a mixture of data from the website’s secure and marketing areas to track consumer journeys. So, building an in-house web analytics tool per certain specifications can be the best option for gathering and analyzing raw user data from various areas of the website.
2. Trial Signups and Number of Leads
The number of trial signups registered daily can tell you a lot about your website’s performance. Although it is not highlighted as a north-star metric, several early-stage businesses consider tracking it every week. The data will help you understand how your website performs in terms of conversions and whether the targeted uses can relate to the content on the site. Tools like Google Analytics can help you track content performance and parts of the websites that visitors appreciate the most.
Trial signups offer a trunk full of leads. Put simply, a lead is an indication that the website visitor is interested in your offerings. The website helps you to generate different levels of leads like sales qualified leads, marketing leads, and top of the funnel leads (email signups). Funnel leads turn into marketing leads, which are further converted into qualified leads by the sales team.
As per stats published by the customer success management firm, Totango, roughly 70 percent of professionals who opt-in for a free trial may not use the software due to a lack of support content. So, sending a “welcome” email after the free trial signup with links for top-notch content about the software’s functionalities can be a good idea to increase the conversion rate.
3. Customer Churn Rate
The percentage of consumers who do not renew their subscription for a company’s recurring services is referred to as the customer churn rate. Companies can calculate it based on the percentage of recurring value lost or the total value of the recurring business lost during the selected period. It is often calculated on a quarterly or monthly basis and is considered one of the most crucial metrics by SaaS firms.
A high churn rate indicates the business may not survive more than a few years. Keeping the churn rate under control is essential because losing clients is not a good sign. And remember, the cost incurred on retention is far less than the money spent on acquiring new consumers. So, the churn rate should never be compared with the number of new clients onboarded.
Studying the churn data can help in designing retention strategies. Experts always advise firms to dig deeper into the numbers while analyzing the loss of annual subscription clients. Highlighting factors like the personas of the churned consumers, their sector, size, and other unique factors while examining the reasons behind their exit is crucial. Sharing this analysis with customer success, marketing, and sales departments can prove to be fruitful.
4. Customer Lifetime Value
The customer lifetime value (CLV) is the amount of money that the client is expected to spend on the firm’s products or services during their contract period.
Your enterprise consumer may be worth $10,000 per year or more, while clients with an entry-level plan may not spend more than $500 during their 12-month contract period. Marketing strategy for acquiring a customer with an entry-level plan may involve automation and lesser cost. On the other hand, onboarding enterprise-level clients will cost more and need more personalized service, with a human touch.
Calculating the time to profitability (TTP) and CLV can help you determine the amount that you can spend on acquiring the consumer. Allocating budgets for acquiring customers without calculating the CLV and TTP can result in the acquisition of clients who won’t ultimately be profitable.
5. Monitoring the Qualified Marketing Traffic
According to stats published in the 2020 SaaS Product Benchmarks Report from OpenView Venture Partners, roughly 4.5 percent out of 1,000 leads may sign up for a free trial. Then, around 14 percent of them may pay for the software and use it after the trial period ends.
But remember, all these numbers can go for a toss if marketers fail to validate ICPs and implement the right outreach strategy to attract them. Monitoring the traffic and activities on the website can help in ensuring the effectiveness of the campaign.
Routine reporting already covers the number of unique visitors to the website. However, SaaS companies need to dig a bit deeper. At times, even existing clients can visit the site and log into their account to check stats or reset certain aspects of their cloud-based solutions. Such visits may end up showing higher traffic on the website. So, it is essential to mark the existing customers visiting the site differently. Besides using in-app analytical tools, even monitoring the log-in screen clicks can help identify returning customers and qualified marketing visitors separately.
6. Customer Engagement Data
Customer engagement data can help analyze the role that the service or software plays in the client’s daily operations. The number of log-ins and log-outs, the total number of minutes or hours the software is used, and other metrics can help judge the engagement level. If users stay logged-in for hours or use it multiple times throughout the day, they won’t consider canceling the subscription on the renewal date.
The customer engagement score scale varies from one software provider to another, based on how a typical client uses it. Check the usage pattern for the most long-standing, happiest customers, and save these inputs as benchmarks. Then, calculate the engagement score for users across the board and compare them with the baseline. The final results will help you determine customer health, and efforts can be made to retain them accordingly.