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SaaS Metrics 2.0 – A Guide to Measuring and Improving what Matters

SaaS Metrics 2.0 – A Guide to Measuring and Improving what Matters

Pacific Crest's 2011 SaaS Survey Pacific Crest, an investment banking firm with a strong focus on SaaS, has surveyed a 70 SaaS companies with very interesting results. There is some great data on topics such as growth rates, cost of customer acquisition, churn/retention, expense models, capital efficiency, etc. The full survey, which was put together by David Spitz and his team (follow @dspitz on Twitter), can be found here. Details of the participating companies: 70 private SaaS company respondents, participating anonymously and confidentiallyAdministered to CEOs and CFOs, May-July 201169% multi-tenant/single instanceDiverse mix:–$0-$60M+ in revenues (~$13M median)(1)–25-250+ employees (~120 median)–10-2,000+ customers (~480 median)–$100s to $MMs median ACV (~$37.5K median)–~50% horizontal apps, ~50% vertical apps, infrastructure, etc. (ACV = Annual Contract Value) 2010 Growth Rates Vary by Company Size 2010 Growth as a Function of Median Annual Contract Value 2010 Growth as a Function of Sales Strategy Gross Churn Summary

La Light Footprint Strategy, un nouveau concept pour l'entreprise Quelle est la base de la pensée militaire des Etats-Unis aujourd'hui ? Elle repose en partie sur une nouvelle vision du monde, élaborée par l'US Army War College qui forme l'élite de l'armée de terre des Etats-Unis dans le domaine de la stratégie et du commandement. Pour les analystes du War College, le monde d'aujourd'hui peut être défini par un acronyme, VICA : V pour Volatilité, I pour Incertitude, C pour Complexité, A pour Ambiguïté. Tous les conflits armés dans lesquels les Etats-Unis ont été engagés récemment sont représentatifs du monde VICA, qu'il s'agisse de l'ex-Yougoslavie, de l'Irak, de l'Afghanistan ou de la Lybie, pour ne prendre que les plus emblématiques. Cyber-guerre, drones et forces spéciales Les 7 lois de la Light Footprint Strategy Quelle source d'inspiration peut trouver un dirigeant d'entreprise dans la Light Footprint Strategy ? Dans ce contexte, la maîtrise de l'information est clé, les systèmes d'information constituent le c?

Why Churn is SO critical to success in SaaS Summary: Illustrates graphically why churn is a huge problem a SaaS company gets larger. It also looks at a very surprising factor that can massively accelerate SaaS growth: negative churn. (This article is applicable to any recurring revenue business, not just SaaS.) Introduction As a SaaS company becomes larger, the size of the subscription base becomes large enough that any kind of churn against that base becomes a large number. The red and yellow lines show the lost revenue due to customers cancelling their subscriptions (churn). Looking at the graph above, we can see that Churn is really not that big of a number in the early startup months. The graph below shows the impact on Total MRR (monthly recurring revenue) of each scenario, which is fairly substantial. The Impact of Negative Churn It is possible to run a SaaS, or any other kind of recurring revenue, business in such a way as to get what I call Negative Churn. The result is quite shocking. It’s an amazing result.

S'il te plaît, dessine-moi un business model Que vous soyez une startup ou une entreprise établie, vous vous êtes sûrement déjà posé la question de votre business model. Est-il vraiment performant ? Durable ? Fragile ? Vous voudriez bien l’analyser, le tester et le comparer, mais ne savez pas comment faire. Le livre Business Model Generation , le best seller d’Alexandre Osterwalder et Yves Pigneur , représente une bonne base pour débuter. Qu’est-ce qu’un business model et pourquoi cela devrait vous intéresser ? Steve Blank, auteur et professeur, le définit ainsi : “Un business model décrit la manière dont votre organisation crée, délivre et recueille la valeur. Quelles sont les composantes d’un business model ? On représente ainsi les 9 composantes de la “matrice” (canvas) du business model : businessmodelgeneration.com / adaptation 15marches Cette approche permet d’avoir une vision globale des différentes composantes du modèle d’affaires. Dessinez votre business model 1/Les segments de clientèle 2/La proposition de valeur À bientôt.

Understanding the Customer Buying Cycle and Triggers This article looks at why customers expect different interactions with you depending on where they are in the buying cycle. It also examines how specific events trigger them into a buying mode. It then explains how you can use this information to make your marketing more effective. The Customer Buying Cycle A simple way to look at the buying cycle is to break into three stages: Awareness – when a customer first becomes aware of your product. How Buying Cycle impacts the sales approach needed Imagine that you wandered in to a clothing store while walking around the neighborhood. Now imagine that you have gone into the same store. What’s the difference? The difference between these two examples is where you are in the buying cycle. Depending on where you are in your buying cycle, your expectations for how the sales people in the shop should treat you are different. How do you adapt Marketing to a buyer’s stage in the cycle? What to do with visitors that are not ready to buy? Conclusions Thanks

WikiCréa Projet Entreprise : solution d'aide à la création d'entreprise HubSpot's Best Practices for Managing SaaS Inside Sales Best practices for inside sales managers. An interview with Mark Roberge, VP of Sales at HubSpot, discussing how he blends science and process with the art of selling. HubSpot is a SaaS company selling Inbound Marketing software. HubSpot has grown revenue over 6,000% in the last four years, placing them #33 on the Inc 500 fastest growing companies list. They now employ about 300 people. Mark’s background is unusual for a VP of Sales. How did MIT Sloan School influence the way you think about managing? It taught me to seek out science and data whenever possible to understand the business and make decisions. What are your goals as a sales exec, and what is your strategy for achieving them? Goals are Predictable, Scalable Revenue Growth My Strategy is best summed up as: Hire the same type of successful sales personTrain each sales person in the same way Provide each sales person with the same quantity and quality of leadsEnsure sales people work the leads using the same process Hiring Onboarding

Multi-axis Pricing: a key tool for increasing SaaS revenue Scalable pricing is a powerful tool to grow revenue in a SaaS or software business. It allows you to capture more of the revenue that your customers are willing to pay, without putting off smaller customers that are not able to pay high prices. It also provides a great way to continue to grow revenue from your existing customers. This post looks at how to create scalable pricing using multiple pricing axes, and discusses the different types of axes that can be used. Introduction Many SaaS startups begin life with one product that has a simple pricing model. However as time progresses, they may hear comments like: “I would have been happy paying far more for your product as it provides such great value to me”“I didn’t consider your product as it was too cheap, and didn’t look like a credible option to handle our more advanced needs”“I only needed a subset of your functionality, and your product was too expensive” Let’s look at these to items separately: Emotional Willingness to Pay 1. 2. 3.

SaaS CEOs: Measure Customer Engagement - Increase Conversions & Lower Churn The goal of a SaaS CEO should be to increase the profit they make from each customer (LTV), and lower the costs in sales and marketing that it takes to acquire each customer (CAC). Measuring Customer Engagement is a key tool that will help you achieve that goal, as it will allow you to increase your trial conversion rates, which directly reduces CAC. And it will help you lower your churn rates, which directly increases LTV. (There are also other significant benefits that are described below.) How customer engagement has changed in the on-line world In the old world, most of the ways that companies engaged with their customers would involve human interactions either face-to-face, or over the phone. There are some tools that help us judge how customers as a whole are behaving on-line, but so far those tools have not allowed businesses to analyze customer behavior at the individual level. Why should you care? You might ask why would you care about how individual customers are behaving?

Will your 2011 Plan stand up to investor scrutiny? We have just gone through the time of year when startups present their 2011 plans to their boards for approval. In many ways, these meetings are very similar to the meetings we have with new startups that have projections for how they believe their revenue will grow. What I always find interesting in this process is looking at how the management team came up with the bookings forecast, and what steps they took to validate the number. In a lot of cases, the bookings target is determined using some rough top down logic like “We should be able to easily double the business this year” or “We’re similar to successful startup XYZ, and they hit $8m revenue in their third year, so we should be able to do the same.” What is surprising is how few companies do the work to validate their top down forecasts. Not surprisingly these are usually the companies that miss their forecast. By going through this process, I am looking to validate the following items: Example 1: A SaaS Company Conclusions

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