In the world of (SaaS), analytics are key to success. The right data can help you track progress, understand what's working and what's not, and make informed decisions about where to focus your marketing efforts. But with so many different types of data out there, it can be tough to know where to start.
This guide will walk you through the basics of SaaS analytics, from understanding the different types of data to tracking the most important metrics for your business. By the end, you'll have a firm understanding of how to use analytics to drive growth for your company.
The Different Types of SaaS Analytics Data
There are three main types of data that are important for SaaS businesses: product usage data, marketing data and billing data.
Product usage data includes things like how often users log in, what features they use, and how long they spend using the product. This type of data is important because it allows you to see how users are actually interacting with your product. Are they using it as intended? Are there any features that are being neglected? Product usage data can help you answer these questions and make informed decisions about where to focus your efforts.
Marketing data, on the other hand, is generated by your marketing efforts—things like website traffic, ad clicks, and email opens. This type of data is important because it tells you how effective your marketing is. Are people coming to your website? Are they taking the desired action? Marketing data can help you answer these questions and make sure you're putting your resources in the right place.
Billing data is what plans your users belong to and how often they pay.
Tracking the Most Important SaaS Metrics
Now that you understand the different types of data that are important for SaaS businesses, let's take a look at some of the most important metrics you should be tracking.
1. Monthly Recurring Revenue (MRR)
As a SaaS Marketer, your ultimate goal is to drive growth for your company. And one of the best ways to do that is to increase your Monthly Recurring Revenue (MRR). MRR is the lifeblood of your business, so it's important to track it closely and look for ways to increase it. There are a number of things that can impact your MRR, from new customer acquisition to upsells/cross-sells and even churn. So, if you want to get a holistic view of your business' health, MRR is the metric you need to be tracking.
2. Customer Lifetime Value (LTV)
Another important metric for SaaS marketers is Customer Lifetime Value (LTV). LTV is a measure of how much revenue a customer will generate during their lifetime with your company. Therefore, it's essential to track LTV if you want to keep your business growing. There are a number of factors that go into calculating LTV, such as Average Customer Tenure and Average Revenue per User (ARPU). By tracking LTV, you can get a better understanding of which acquisition channels are most effective and what steps you need to take to keep your customers around for the long run.
3. Net Promoter Score® (NPS®)
If you want to gauge customers' satisfaction with your product or service, Net Promoter Score® (NPS®) is the metric you need to be tracking. NPS® measures how likely customers are to recommend your product or service to others on a scale from 0-10. To calculate NPS®, simply ask your customers "How likely are you to recommend our product/service to a friend or colleague?" Then, group respondents into three categories: Promoters (9-10), Passives (7-8), and Detractors (0-6). Finally, subtract the percentage of Detractors from the percentage of Promoters to get your final NPS® score. A positive NPS® score means that you're delivering value that exceeds customer expectations, while a negative score indicates that you have some work to do in terms of customer satisfaction.
4. Churn Rate
As a SaaS Marketer, one of your goals should be reducing churn - i.e., the number of customers who cancel their subscription each month. Churn can have a major impact on your business's bottom line, so it's important to keep tabs on it and look for ways to reduce it. Several things can impact churn rate, such as pricing, product/market fit, and customer satisfaction. By tracking churn closely, you can identify problem areas and take steps to address them before they cause too much damage.
5a. Ad Cost Per Click (CPC)
Ad CPC tells you how much money you're spending on advertising for each click on your ad—in other words, it measures how effective your ads are at driving traffic to your website. A high CPC means that either your ads aren't very effective or that you're bidding too much for keywords (or both). Either way, it's something you'll want to keep an eye on.
5b. Cost Per Lead (CPL)
CPL measures how much money you're spending on marketing for each new lead—in other words, it tells you how effective your marketing efforts are at generating leads. A high CPL means that either your marketing isn't very effective or that you're spending too much on marketing (or both). Again, this is something you'll want to keep an eye on.
Analytics are essential for any SaaS marketer who wants to drive growth for their business. But with so many metrics out there, it can be tough to know which ones are worth tracking. That's why we've put together this list of must-track analytics for SaaS marketers. By closely monitoring these metrics, you'll be able to gain valuable insights into your customers' behavior and make informed decisions that will help your business thrive.