SaaS Metrics - A Guide to Measuring and Improving What Matters. This blog post looks at the high level goals of a SaaS business and drills down layer by layer to expose the key metrics that will help drive success. Metrics for metric’s sake are not very useful. Instead the goal is to provide a detailed look at what management must focus on to drive a successful SaaS business. For each metric, we will also look at what is actionable. There is an updated (re-written) version of this post available here: SaaS Metrics 2.0. Before going any further, I would like to thank the management team at HubSpot, and Gail Goodman of Constant Contact, who sits on the HubSpot board.
Let’s start by looking at the high level goals, and then drill down from there: Key SaaS Goals Profitability: needs no further explanation. Two Key Guidelines for SaaS startups The above guidelines are not hard and fast rules. In the next sections, we will drill down on the high level SaaS Goals to get to the components that drive each of these. Three ways to look at Profitability Other Metrics. Are customer acquisition costs killing your software business ? | Cloud Computing, SaaS Applications & Business software Blog- GetApp.com.
It is amazing that small software vendors are spending more than 50% of their revenues on customer acquisition! A recent survey from TrialPay on software customer acquisition methods shows the discrepancies between marketing costs for small and larger software vendors. The key takeaways from the survey include: 1) Software companies spend on average 39% of revenues on customer acquisition. This number varies dramatically based on size, with larger companies spending considerably less. Vendors with more than $5M in annual revenue spend about 17% of revenues on customer acquisition, vendors with revenue included between ¢100k and ¢5M spend 15% on customer acquisition while smaller vendors with under $100K in annual revenues are spending 54% of their revenues to acquire customers! 3) Social media marketing is gaining in popularity. 60% plan to increase their investment in this area over the coming years. 4) Use of vendor cross-sell will increase. 2) Help customers “steal” your software Google +
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