As a B2B SaaS marketer at LiveAgent, here are the most important metrics I follow:
- Daily Active Users (DAU) - in this case, it’s the number of active trials. Activity is determined on key actions that we track like number of trial logins, number of interactions in the app, number of users added to the trial account
- Number of Trials - Based on the number of trials, you can plan an expect a certain number of sales. Trial signups are very important in your sales funnel and should be one of the top 3 metrics to follow.
- Trial conversion rate - You want to know your trial conversion rate in order to be able to make educated decisions. This metric is closely connected to the number of trials metric, based on which you can calculate expected number of sales. Also, my suggestion is to calculate trial conversion rate based on the source of the trial e.g. AdWords, Organic, Referral.. At LiveAgent, Google AdWords has a higher conversion rate than Global average and sources like Facebook convert less.
- Retention - You have to keep track of your retention rate in order to be able to calculate your Life Time Value and accordingly estimate maximum Cost Per Acquisition.
- Churn rate - This one is a no brainer, higher churn equals troubles. Also, it’s 7x more difficult to acquire a new customer than to keep one. So focusing on reducing churn might be a better strategy in some cases than focusing on acquisition of new customers
- Average Order Value - To be able to calculate Life Time Value, you need to know what your average order value is. With SaaS, the average order value should increase in time as customers tend to ad more users, features or upgrade to more expensive packages.
- Life Time Value (LTV) - After you know Retention and Average Order Value, you can calculate your LTV by multiplying those two.
- Cost Per Acquisition (CPA) - In SaaS, most companies use the 1/3 rule where they allocate 1/3 of LTV to CPA. Heavy funded startups can allocate as much as 100% - 150% of ARR for CPA
- Monthly Run Rate/Annual Run Rate (MRR/ARR) - One of the most important metrics is your Monthly Recurring Revenue, or Annual Run Rate. This can help you determine growth rates and see a better perspective of your revenue.
- Number of Sales - if a lead upgrades a trial to a paid plan, you can consider it a sale. This one is a no-brainer and is also an essential key metric for your SaaS.
In an ideal world, I would suggest tracking sources of all your trial signups and also the sources of your sales. Based on that, you will not only be able where your trial signups come from, but also where your sales come from.
Are you tracking any other KPIs or metrics that I didn't mention? Comment below and help me and other SaaS marketers improve 🤙
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