Because SaaS marketing is so fast-paced, it is important that you track the right metrics in order to truly understand your growth. The metrics you pay the most attention to might change over time, as well, so understanding when to track one statistic and when to track another can truly help you enjoy success.

In the Early Stages

Starting a SaaS business can certainly be a stressful task. You will have about six months to break even before the capital you invested is gone, and at the very least, you need to break even. At this point, there are a few things to measure.

  • Product/Market Fit – This is the very first thing you should consider after starting a SaaS business. If the software has no market, there is zero point in spending your marketing budget on it.
  • Lead Growth – The number of people visiting your website are not true indicators of your company’s potential. However, this changes if the majority of those visitors are highly qualified buyers. Campaigns that are targeted directly at the right people are more likely to be successful. Be sure to measure your lead growth during campaigns so you know what works and what doesn’t.

The Expansion Stage

Once you’ve started earning back some of your capital and people are signing up for your product regularly, you’ll need to come up with a strategy to maintain and even accelerate that growth. There are several metrics that can make a huge amount of difference.

  • Growth of New Business – This can help you better understand things like market demand, awareness, and customer preference. For instance, if your clients will keep paying you for two years, on average, and you generate enough new customers this year, then you have another couple of years of stability ahead.
  • Lifetime Value – This is another important metric, particularly when it comes to customer retention. This one tells you how long your customers stay with you. If they finish out a year and leave, this signifies a problem. However, if most of your customers renew their subscriptions, you’re golden.
  • Cost of Customer Acquisition – As always, this number should be as low (and stable) as possible. A good rule of thumb is to ensure that it always less than the cost of a subscription to the software for a year.

The Success Stage

At this point in your business, you have plenty of customers, a great reputation, and a product that is relatively well-known. While you are likely still tracking all of the aforementioned metrics, a few others will come into play at this point.

  • Profitability – How much revenue does your business actually generate each year as compared to your expenditures?
  • Market Share – Your market share is a direct measurement of your success. If 30% of the people who are in the market for software like yours come to you, then you can consider yourself extremely successful.
  • Growth – This tells you how quickly your business is growing and is a good indicator as to when you should expand.

SaaS marketing metrics put all of the information you need right in front of you, allowing you to understand the success and profitability of your marketing efforts. Over time, focusing on the right metrics will allow your business to grow and expand.