In this blog, we'll cover 9 of the most important marketing metrics that all SaaS companies need to track, no matter what niche they cater to. But first, let's look at what marketing metrics are, what marketing metrics measure, and why marketing metrics are needed for successful marketing strategies.
As per definition, marketing metrics are values that a marketer uses to track their company's performance. For SaaS companies, marketing metrics help track their campaign performance across various channels, customer satisfaction, and engagement, as well as help compare past performance and set achievable goals for upcoming efforts based on the former.
As mentioned above, tracking metrics is the best way to know whether your brand is performing as well as you want it to, whether your customers are satisfied and loyal to your products/services, where your efforts are working well, and where they're not. Optimizing your current and future campaign plans is another added benefit. For example, if your current digital campaign shows an ROI below your set benchmark, it's time to optimize your campaign for your current channel or try out a different marketing campaign in the future.
One of the most commonly measured metrics, the churn rate measures the number of customers who stop using your company's products or services after a certain period. Calculating your company's churn rate is a great way to figure out when and why your customers are opting for another brand's product, and how you can create strategies to boost retention over a long period.
According to research, about 50% of customers naturally churn (stop buying from your brand) every 5 years. While this may be worrying, not all companies measure churn rates the same way.
A SaaS company can calculate churn rate based on
For example, a company may use quite a lot of customers in a year, but it wouldn't be as damaging in the event of a product price hike or total revenue in a year.
Measuring your brand's churn rate according to your goals is highly important. Be it revenue, customer engagement, or product popularity, measuring the churn rate helps massively.
Retention measures the number of customers that come back to buy from your company. This is different from your company's churn rate, as while churn measures how many customers you've lost, retention measures how many you've got coming back.
The relationship between the retention rate and churn of your company is inverse. A higher churn, the fewer customers you've got coming back, and the higher the retention, the less they'll leave.
Improving your retention rate is beyond important, and here are a few steps you can follow to make sure your customers keep coming back
Cost-per-acquisition, or CPA, is a metric used to measure the average cost a company has to undertake to acquire a customer/subscriber. Measuring your average CPA provides an insight into the revenue returns of each of your marketing campaigns. For example, are you spending more on campaigns that are bringing in fewer conversions, i.e., have higher CPA? If so, it's time to redirect your efforts to figure out why your campaign isn't as impactful as it should be, or turn to channels that bring in more customer acquisitions.
It's no secret that the more your target audience is aware of your brand, the more likely a customer acquisition becomes. However, this doesn't mean simply bombarding your audience with advertisements and campaigns, but first of all focusing on branding details like making a logo that will be associated with your brand on all platforms, and back then closely tracking your brand awareness across different platforms and systematically optimizing your efforts. Brand awareness is an important metric to track, especially across social media platforms such as Linkedin, Facebook, Instagram, and Pinterest.
Here are a few ways you can keep track of your brand awareness -
This metric is closely related to brand awareness but is more specific in terms of what it tracks. While brand awareness is all about whether your customers know about your brand, customer engagement is about what they choose to do after.
Be it likes on your Instagram posts, retweets, or sharing and saving of your content, customer engagement is an excellent metric to base your social media efforts upon.
P.S. One way to work towards higher engagement is by creating content that your audience will find valuable. The more value they see in your posts, the more they will engage with it.
Lead velocity measures, in real-time, how many leads your marketing efforts and sales pipeline generate every month. The biggest advantage of measuring your SaaS company's LVR is measuring your company's long-term growth, as well as knowing how effective your sales funnel is.
While LVR may sound similar to tracking total monthly revenue, your lead velocity rate focuses on whether your pool of leads grows every month, or whether a level of optimization is needed to drive in a reliable number of qualified leads.
For SaaS brands looking to scale up their revenue from their website itself, tracking new site visitors is of utmost importance. This metric helps track
These insights are powerful tools for website optimization, creating new marketing campaigns, and understanding customer behavior.
NPS, or Net Promoter Score, is a metric that tracks the number of people who have made a purchase from your brand and recommended your products/services to their network. Questions like
are very common in brand feedback surveys, as well as quick post-purchase questions that help brands better understand their CX.
The higher your NPS, the better you have catered to your existing customers, as well as creating a positive brand image with their friends and family.
Calculating your ROI on each of your marketing efforts is a crucial, crucial step for all SaaS companies. Not only does this give you an idea of how successful and effective your efforts are, but also helps you set up achievable revenue goals for the coming quarters. Return of Investment is directly proportional to how cost-effective and successful your campaign is - if a paid search campaign is taking up more of your marketing budget than its returns, it's time to optimize.
While calculating your exact ROI can be tricky, there are lots of analytics tools that do the job for you.
Marketing metrics can be a tricky field to navigate, especially if you're just starting out. However, listing down your company goals, opting for the right analytics tool, regularly reviewing your metrics, and optimizing your efforts is the best way to move forward!
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