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Key marketing metrics for SaaS business

Software as a service, or SaaS, is a model for software licensing and delivery, in which the software is leased by the user on a monthly subscription charge. The most common form of delivery is via the web, using a thin client. The model is successful with a range of business applications, including messaging and office software, and is a specific industry that requires unique metrics to track progress and performance.
Specifics

The core concept of SaaS marketing is to measure what matters, and this will enable a manager to focus on improving sales performance, by understanding where the cost-effectiveness lies. SaaS businesses can be broadly categorised, and includes:
  • Development software
  • Customer Relation Management (CRM)
  • Gaming
  • Virtualisation
  • Accounting
  • Management Information Systems (MIS)
  • Anti-virus software
Cloud computing also falls under the SaaS umbrella, and more and more businesses are turning to cloud solutions, as it is a more cost-effective way to achieve targets. Having all your data on one dedicated server, allows authorised personnel instant access, using the Internet as a medium.

Leads

The first thing is for both sales and marketing to find mutual agreement in the difference between a “lead”, and a “qualified lead”. For a SaaS business, a lead could be a user that has read a few blogs on the subject, but has not yet expressed a direct interest in acquiring the product. Any potential customer must be regarded as a lead, and a qualified lead is a step up from that, typically taking the form of a free trial or product demo. The user is interested enough to try the product, so this is a qualified lead.

New customers

This is the easiest way to assess marketing and sales performance, and by using a series of metrics, a business manager can accurately assess each individual marketing strategy, and concentrate of the lower performers, thus improving overall sales efficiency. If you analyse the company’s actual percentage of the available market share in that sector, you can begin to see how much long-term potential there is.

Churn

It is essential to know how many customers you are losing, and with churn, you have a metric that accurately tells you how many clients you have lost over any given period of time. If there is a problem at some stage of your business process, churn will identify it, and rectification can begin. There are many reasons why a user might stop using the service, and by using this innovative metric, a sales manager can quickly establish why people are not renewing or returning. Known as a customer service metric, churn has various applications. Low churn rates come from good targeting and effective marketing, as your energy is not focused on the wrong people.

SaaS businesses grew up alongside the internet and technology, enabling companies to deliver their digital products to a network of users. Tracking the performance of such a business requires special solutions, and the metrics used today are designed to accurately measure any number of variants.

12 Jul 2016 10:15

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About Boris Dzhingarov

Boris Dzhingarov graduated UNWE with a major in marketing. He is the CEO of ESBO ltd brand mentioning agency. He writes for several online sites such as Tech.co, Semrush.com, Tweakyourbiz.com, Socialnomics.net. Boris is the founder of MonetaryLibrary.com and cryptoext.com.




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