Today’s marketing platforms give you access to a never-ending flow of customer and performance data, providing insights to help you create effective content, attract high-quality leads, and boost sales.
However, the proliferation of data often creates frustration and confusion. Which SaaS marketing metrics directly impact your bottom line, and which ones may send you on a wild goose chase? Where should you focus your resources to improve SaaS marketing KPIs that matter?
Unlike traditional marketing, SaaS companies must go beyond customer acquisition to monetize relationships and retain customers. However, measuring every metric you can collect along the complex SaaS customer journey can lead to analysis paralysis. Not to mention, information overload may cause your team to focus on the wrong activities.
Let's review ten SaaS marketing metrics you should improve to achieve tangible and meaningful business outcomes.
These SaaS marketing metrics help you understand if you’re driving high-quality website traffic and assess if your strategy facilitates the SaaS customer journey effectively.
Most SaaS customer journeys start with a visit to a vendor’s website, where prospects learn about the solution and take the next step, such as downloading content, requesting a demo, or signing up for a free trial. More unique visitors often translate into more people trying your software and becoming customers. Tracking this metric helps you understand your audience size and assess the effectiveness of your SEO strategy.
Attracting website visitors isn’t enough to generate sales. You must consider the quality of your website traffic. One of the most critical SaaS marketing metrics for understanding engagement is the number of free trial or freemium version sign-ups. You can lower customer acquisition costs and increase your marketing ROI by getting prospects to start using your software and experiencing the benefits first-hand.
Getting people to sign up for your free trial or freemium plan is essential, but are they turning into paying customers? To find out, track Marketing Qualified Leads (MQLs), Sales Qualified Leads (SQLs), and/or Product Qualified Leads (PQLs) with your CRM system.
MQLs have visited your website and shown purchase intent (e.g., downloading a product comparison). PQLs have used your free version and shown interest in upgrading to a paid plan (e.g., using premium features frequently during the trial period). SQLs are further along in their SaaS customer journey, and their behaviors suggest they’re ready to buy (e.g., contacting sales).
This SaaS marketing metric measures the month-over-month growth rate of qualified leads. It helps you evaluate pipeline health and predict future revenue growth by tracking how quickly you generate high-intent SQLs. A growing LVR is a leading indicator of a healthy pipeline and potential sales growth.
The subscription-based SaaS business model means it often takes months to generate positive ROI. SaaS companies must go beyond converting leads into customers to retain them and increase the value of those relationships. These SaaS marketing metrics show your marketing efforts’ impact on your bottom line:
This SaaS marketing KPI represents the predictable and recurring revenue a business generates monthly from subscriptions or contracts. It reflects revenue stability and scalability and helps SaaS companies track performance, forecast future revenue growth, and plan operating expenses and investments.
HubSpot defines CCR as the percentage of customers or subscribers who cancel or don't renew their subscriptions during a specific period. All SaaS companies dread customer churn, but you shouldn't assume that lowering CCR will automatically improve profitability.
You should also track RCR, the revenue loss caused by churned customers. It helps you make strategic decisions and invest in retaining high-value relationships. For example, you'll lose more revenue if an enterprise customer leaves. Retaining this customer may not reduce your CCR but will lower your RCR and boost your profitability.
This SaaS marketing metric tells you how much it costs to gain a customer. It includes marketing, sales, advertising, and other expenses directly tied to attracting and converting leads into customers. As a general rule of thumb, you should recover your CAC within 12 months of acquiring a customer to ensure the long-term viability of your business.
CLV is the total revenue you expect from an account throughout its relationship with your company. It helps you understand the long-term value of acquiring and retaining customers and gain insights to guide your marketing spend, pricing structure, upselling and cross-selling strategy, and customer experience investment.
According to Klipfolio, the ideal CLV to CAC ratio is 3:1. In other words, each customer should be worth 3 times more than it costs you to get them. If the ratio is too low (e.g., 1:1), you lose money for every customer you acquire. However, if the ratio is too high (e.g., 5:1), you’re spending too little — you risk missing out on opportunities and may lose prospects to competitors.
This SaaS marketing metric shows how likely your customers will recommend your solution to others. It offers a tangible measurement of customer loyalty and is a strong indicator of the effectiveness of your customer retention efforts.
Survey your customers and ask them, “On a scale of 1 to 10, how likely are you to recommend this product to a friend or colleague?” Customers who answer with a score of 9 or 10 are promoters; those who give you a 7-8 are passives; anyone below 7 is a detractor. Next, subtract the percentage of detractors from that of promoters to calculate your NPS.
To focus on marketing activities that matter, you must track SaaS marketing metrics across the entire SaaS customer journey to measure the effectiveness of your strategy and make targeted improvements.
At Spot On, we start with building a solid foundation for our clients. We understand their business objectives, identify SaaS marketing KPIs to track, and design a strategy to improve those metrics. We also revisit our approach regularly to align the SaaS marketing metrics we track with shifting business requirements to ensure long-term success.
Ready to send your SaaS marketing KPIs soaring? Schedule a meeting to discuss your goals and see how we can help.
