To truly capitalize on today’s B2B SaaS marketplace, B2B marketers should establish which metrics of SaaS marketing KPI will yield the greatest result.
SaaS Marketing is one of the most lucrative industries in today’s marketplace. As per ReportLinker 2021 report, titled, “Software as a service (SaaS) Global Market Report 2021: COVID 19 Impact and Recovery to 2030,” the market is expected to reach US $ 436.9 billion.
While this provides a promising future for the SaaS marketing industry, not everyone will be able to capitalize on it.
To successfully execute a SaaS marketing strategy, B2B marketing should be aware of the essential metrics and performance indicators they should track. While this seems a simple task, many marketers often fail with them. Either they end up tracking too many metrics, which results in analysis paralysis, or their KPIs are too granular that it becomes difficult to analyze, which will have a cause-and-effect relationship with the bottom line. While some B2B marketers opt for an angle, broad metric, it often fails to identify where the greatest growth opportunities lie.
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Here are five SaaS Marketing KPIs that B2B marketers can use to get to an accurate measure of heath and serve as a reliable yardstick for directing marketing resources:
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Net Profit
If KPIs are crucial indicators of the business, then the net profit is its heartbeat. Net profit shows the sum of overall business performance. Despite this, only a few marketers have this KPI on their list. While they may not have ownership or access, it does not mean that they should drop it. Since marketing is the department that board members often view as cost instead of investment, strategies, and actions that are associated with results to net profit will stand a higher chance of gaining executive support.
- Customer Acquisition Cost (CAC)
CAC is nothing but the cost of acquiring a single new customer. It is calculated by the division of total sales and marketing costs in a set timeline by the number of customers an organization acquires. This provides organizations with a figure that demonstrates the return on investment. Using CAC, organizations can also estimate the effectiveness of future campaigns that will help them to maintain a positive ROI, enabling them to increase customer volumes while maintaining or decreasing CAC.
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Monthly Recurring Revenue (MRR)
MRR is the average revenue per customer multiplied by total customers in a month. On a relatively brief time scale, this plots the SaaS financial growth trajectory. However, the real value of the recurring revenue calculation is associated with segmentation and application. With this KPI, B2B marketers can compare the monthly revenue contributions and trajectories or just about anything: such as customer segments, products, campaigns teams, and much more.
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Funnel Conversion Rates
B2B marketers should be aware of their funnel. In its simplest form, the funnel is comprised of stages of awareness, interest, consideration, intent, evaluation, and purchase. While some marketing departments have more stages, others have fewer. What is more important is measuring the conversion rate between adjoining stages of the funnel. This provides the organization the clarity of which funnel stages are performing well and which ones are leaking. It is an important tool that can help B2B marketers to direct their marketing resources that can be boiled down to the following: for the maximum impact, the target investment where the organization have the lowest conversion rates highest up the funnel.
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