15 SaaS Marketing KPIs You Should Not Avoid Tracking in 2024

Let’s face it: no matter what you do or which industry you target, you must understand KPIs to measure your business success — whether it’s sales, marketing, customer success, or any other field.

And it’s more important than ever in SaaS. 

You can’t run your business on a whim, right?

Hence, you should have a good understanding of the SaaS Marketing KPIs. These KPIs are a great way to show your investors how they’ll benefit or how their money is helping your company grow.

The huge number of key performance indicators (KPIs) used in the software as a service (SaaS) industry can make you wonder about:

• Which b2b SaaS KPIs should you prioritize?
• Which b2b SaaS marketing metrics can you safely skip?

The good news is that we've figured out fifteen KPIs for SaaS marketing that cover everything you need to monitor your company's health.

Let's get straight to these KPIs and see what they are so you can start using them to track and grow your business.

What are SaaS Marketing KPIs?

SaaS Key Performance Indicators (KPIs) are metrics and data points that  SaaS companies use to assess the efficacy and viability of their operations. These metrics are critical for evaluating various aspects of a SaaS company's operations, growth, and overall success.

Lead velocity rate, churn rate, customer acquisition cost (CAC), marketing sourced revenue, etc., are a few examples. 

You might not know this: Gartner said that 70% of businesses planned on spending more on software in 2023 to make their operations run more smoothly. 

Because of this, people who want their businesses to grow soon need to learn about marketing KPIs for SaaS.

Why is It Important to Track the SaaS KPIs?

Tracking SaaS KPIs is important for your SaaS for numerous reasons:

• Understand Your Progress toward Goals: SaaS KPIs can inform you whether your efforts are paying off and whether your company is headed correctly.
• Identify Problems Early:  These SaaS KPIs act as red flags, highlighting potential problems like customer involvement or revenue drop.
• Make Data-driven Judgments: SaaS marketing KPIs provide you with insights that inform strategic decisions like resource allocation, marketing campaigns, product development, etc.
• Optimize Performance: Analyzing patterns, SaaS KPIs allow you to identify the scope of importance and then optimize the performance accordingly.

Increase Investor Confidence: Well-defined and strong KPIs show the strength of your SaaS business, drawing in investors and helping to secure financial backing.

Key Differences Between SaaS KPIs and Regular KPIs

Well, hate to break it to you, but SaaS KPIs and regular KPIs aren’t the same at all, or you can say — they don’t function in the same way.

Let's highlight the differences between traditional KPIs and SaaS KPIs.

Areas Your SaaS KPIs Should Cover

If you want to run a successful SaaS business, you must thoroughly understand KPIs from various functional areas.

Monitoring and optimizing these KPIs can help you make more informed decisions and drive the growth of your SaaS business. 

No matter which marketing KPIs you choose for your SaaS, here are the key areas your SaaS KPIs should cover:

1. Marketing

• Lead Generation: Track the number of leads from different sources and their conversion rates into potential opportunities.
• Customer Acquisition Cost (CAC): Determine the most cost-effective marketing strategies by analyzing the cost of acquiring a new customer in each campaign.
• Conversion Rates: Analyze the success of campaigns by tracking how many leads turn into paying customers at different stages of the marketing funnel.
• Customer Retention: Find out how marketing strategies contribute to maintaining long-term customer relationships and keeping the customers you've acquired.

2. Sales

a. Sales Pipeline: Assess the condition and progress of your sales pipeline, and focus on how long it takes for leads to progress through each stage.

b. Win Rate: Determine the percentage of closed deals and identify factors that can impact the success of your sales.

c. Calculate Average Revenue Per User (ARPU): Ascertain the average revenue per customer produces and segment ARPU to identify the differences across customer segments.

d. Sales Cycle Length: Decide the average time it can take to wrap up a deal and identify ways to improve the efficiency of your SaaS.

3. Revenue and Growth

a. Monthly Recurring Revenue (MRR): Monitor stable subscription revenue and growth to assess the health of your business.

b. Churn Rate: Measure the churn rate, identify reasons for cancellation, and then work on methods keeping in mind how you can reduce it.

c. Net Promoter Score: Use this KPI to measure customer satisfaction and loyalty, drive positive word-of-mouth, and improve your services.

d. Expansion Revenue: Identify ways you can follow to increase revenue from your existing customers through upselling, cross-selling, and expanding services.

4. Customer Success

a. Customer Satisfaction (CSAT): Measure how happy customers are with your product or service and use their feedback to enhance their experience.

b. Onboarding Completion Rates: Focus on a smooth onboarding process to boost your user engagement and adoption.

c. Customer Lifetime Value (CLV): Calculate the total value a customer brings over their relationship with your company to inform your acquisition and retention strategies.

d. Support Ticket Resolution Time: Ensure timely and effective resolution of support tickets to increase your customers' satisfaction level.

15 SaaS Marketing KPIs to Measure the Success of Your SaaS

KPIs let you track almost every aspect of your SaaS company, but having too much data can sometimes be overwhelming. 

The key question is: which crucial SaaS marketing KPIs should you focus on to reduce the confusion?

Let’s find out!

1. Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) refers to the cost of acquiring a new customer. It covers marketing and sales expenses. You must divide total acquisition costs by the number of new customers to calculate CAC. 

If you want to make profits for your company, you must have a lower CAC.

Using this formula, you can thoroughly examine all expenses connected to your marketing and sales. 

The CAC essentially represents the capital expenditure you need to attract a single paying customer. 

If you want to know the effectiveness and profitability of your marketing and sales campaigns, you need to calculate CAC.

How to Calculate the Cost of Acquiring a Customer (CAC)

You can calculate customer acquisition cost (CAC) by following two steps:

1.  Add your marketing and sales expenses for a certain period

2. Then divide it by the number of new customers you gained within that period

Here is the formula you should use when calculating customer acquisition cost:

For example, if you spent $5,000 on sales and $10,000 on marketing in January and brought in 10 new customers, your cost-effectiveness ratio (CAR) would be as follows:  

($5000+$10000)/10 = $1500.

If you want to avoid clashing with numbers, you can use online SaaS customer acquisition cost calculators, where you can include needed information and find out what your customer acquisition cost is.

Ways to Maximize the Efficiency of CAC

You can use targeted approaches to boost your Customer Acquisition Cost (CAC), such as:

• Ensure your clients are so satisfied with your services that they become your regular customers on their own.
• Invest in strong customer loyalty to increase referrals and customer retention.
• Simplify your workflows with the help of the latest automation and analytics software.
• Create updated articles to increase organic traffic and decrease cost-per-acquisition.

CAC Payback Period

The Client Acquisition Cost (CAC) Payback Period, or Time to Recover CAC, is a crucial metric measuring how long your business takes to earn back the cost of acquiring a client. 

Finding a shorter payback time is a good sign when you calculate this period.

It indicates greater capital efficiency, meaning your business can start making profits more quickly after covering the initial client acquisition costs. 

In simpler terms, the faster you can recover your CAC, the sooner your business begins to profit from new clients.

How to Calculate CAC Payback Period

You can calculate CAC payback using the formula stated below:

For example, the CAC payback period for your company would be twelve months if your CAC was $1,200 and the MRR per client was $100.

2. Customer Lifetime Value (LTV)

Customer Lifetime Value (CLV) is the amount of money a customer contributes throughout their entire relationship with your company. It reflects the long-term financial impact of customer connections, demonstrating a story that involves ongoing value creation and mutual benefit.

Why CLV Insights Are Valuable

Wondering why you need to understand the lifetime value of your customers?

Well, that’s because when you find out your SaaS’s customer lifetime value (CLV), you’ll have a deep understanding of three important things:

• Consumer value
• Buying habit
• Expenditure trends

When you add CLV to other essential metrics, it becomes one of the most important indicators you can use to monitor the long-term growth of your company.

How You Can Calculate Your CLV

The formula you can use to determine your CLV is:

You can calculate the total lifetime value of a customer by multiplying the average customer value with the average customer tenure.

Use factors like past purchases and future predictions to determine the Average Customer Value. 

After you compute it, CLV will provide useful information about the contribution of customers in your company over time.

The Customer Lifetime Value (CLV) can also be calculated using a formula that includes the Average Revenue Per Account (ARPA) and Churn Rate. 

So, the second formula you can use to calculate CLV is:

You can use online calculators for calculating this b2b SaaS metric as well, as shown in the image below:

The CAC: CLV Ratio

Let’s say you have now determined the cost per acquisition and the customer lifetime value for your SaaS. 

So, where do we go from here? 

These figures don't signify anything. 

From these apparently random statistics, what can we derive?

Definitely mix the two!

By combining CAC with CLV, you will get the CLV: CAC ratio, which is a significant indication of the performance of your SaaS. 

Here’s the formula for calculating the CAC: CLV ratio:

While peeking into this ratio, you should remember that if your CLV greatly surpasses your CAC, you're on the right track. 

For example, investing $50 to recruit a customer who spends $100 monthly. 

If your ratio is close to 1:1 or below, you have a problem—for instance, paying $40 for a customer who makes only a $50 purchase. 

Popular companies like Salesforce focus on having an average CLV to CAC ratio of approximately 5x. 

Here is a pro tip that really pays off for the SaaS owners who want to get more revenue in a shorter period: target a CLV that is four times your CAC's worth. 

3. Leads by Lifecycle Stage

SaaS leads are equivalent to "contacts" or e-mail addresses. 

When you first start, you can refer to these individuals as those who have expressed interest in your SaaS team's outreach.

You will not get all your leads the same way; that’s why you must understand the methods that can bring you potential leads. 

This will help you when you are developing content marketing strategies.

Your ultimate goal should be assisting each lead throughout your sales funnel using appropriate tactics according to their level of understanding.

You’ll find two major categories in terms of qualified leads:

i. Marketing Qualified Leads (MQLs)

ii. Sales Qualified Leads (SQLs)

Let’s learn about these two types of leads in a detailed way:

i. Marketing Qualified Lead (MQL)

A Marketing Qualified Lead (MQL) is a potential customer who fits your buyer persona and expresses an interest in your SaaS product or service.

You must first use effective content marketing campaigns to impress those SaaS MQLs. 

Offering them information, tools, templates, etc, is another way to engage with your MQLs.

Once you've discovered the optimal MQLs for your customer profile, you should implement some nurturing activities. 

Then, you can guide them through the sales funnel by ensuring they take action rather than simply being aware of what you offer.

Look for signs like frequent website visits or engagement, including downloading ebooks, to understand the MQL’s intent more specifically.

As a SaaS company owner, you should also monitor the MQL to SQL ratio, which can help refine your lead nurturing processes.

ii. Sales Qualified Lead (SQL)

A Sales Qualified Lead (SQL), residing in the lower part of the sales funnel, is a potential customer who is very interested in your SaaS product. 

Your marketing team scores leads based on their behavior to categorize SQLs. 

This strategy enables your sales staff to discover and prioritize leads who are more likely to convert into potential customers.

If you want to increase your conversion rate, you must effectively manage the transition from MQL to SQL. 

You can utilize different marketing automation tools like HubSpot, MailChimp, or Marketo to refine this process. 

These tools automatically identify prospects based on parameters defined for each of your lead types and enable more personalized engagement.

Lead Classification Overview

You have to understand the properties of MQLs and SQLs to differentiate leads properly. 

So here we have pointed the core differences between MQL and SQL out in a table:

4. Freemium Conversion Rate

The Freemium Conversion Rate is a metric that counts how many users switch from your free product to the premium offering. It is the criteria for the compatibility of your marketing attraction and the actual user experience.

Let’s say you offer a free streaming service with basic functionalities, and some users upgrade to a premium subscription. 

The freemium conversion rate is a metric that measures the success of turning these free users into excited premium customers.

The Formula for Calculating Freemium Conversion Rate

You can use the following formula to calculate your SaaS's freemium conversion rate:

For example, think you started with 1,000 free customers, and 50 of them switched to premium.

In this scenario, your freemium conversion rate would be (50 / 1,000) * 100 = 5%.

So, the freemium conversion rate explains how well your product is received. 

Freemium Conversion Rate Standard

According to sources, the typical freemium conversion rate is between 1% to 10%.

Some businesses utilize freemium as a lead-generating tactic; by this, they collect user information and have salespeople hunt them down. 

If you do the same, you'll annoy and lose most of your potential consumers.

So you should rather follow these two tips to be successful with freemium:

1. Make sure your free version adds value to your customer’s life. 
2. Make the product so helpful that people do not mind paying to have access to further features.

5. Active Users

Active users are those who use your SaaS platform on a daily basis. It's more than just the numbers; it represents user satisfaction and the value they find in what you provide. 

Types of Active Users

We identify active users in three major ways: 

1. Daily Active Users (DAUs)

These people are the persons who show up and use your SaaS platform daily.

Obtaining your DAU requires you to add up the number of users who execute unique actions or unique (as you specify) within a 24-hour period. 

A user is not considered to be daily active if they visit your site but then leave.

So here is the formula you can use to calculate your DAUs =

2. Weekly Active Users (WAUs)

These are the people who interact through your SaaS within a week.

Wondering how you can calculate your WAUs?

You will need to track how many unique people have used an app in a given week to figure out its WAU. 

To figure out WAU, follow these steps:

i. Write down the number of people using your SaaS daily.

ii. Add up the number of people who have used the SaaS platform each day of the week. This will tell you how many new users there are every day of the week.

iii. Calculate all the new users for each day of the week and eliminate any already there.

3. Monthly Active Users (MAU)

The total number of users who engage in your platform over a month are your monthly active users (MAUs).

You have to add together the "number of unique new users in a month" and the "number of unique users who return in the month" to get the total of monthly active users.

Keep in mind that the numbers only cover one month. You can easily see your monthly active users using many analytics tools.

So, here is the formula for calculating your MAUs:

The Formula to Calculate Active Users

You can utilize the DAU/MAU ratio, also known as the stickiness ratio, to understand your user’s happiness and retention better. 

Here is the specific formula to calculate it:

Suppose your SaaS platform serves 5,000 monthly consumers. 

There are 2,000 weekly users and 800 daily users. 

Now, let's find out the DAU/MAU/stickiness ratio your SaaS has.

So, what does the 16% Stickiness Ratio mean? 

It indicates that 16% of your monthly consumers are interested enough to engage with your product on a daily basis.

6. Churn Rate

It’s the first metric that should come to your mind, especially if you have a subscription-based SaaS company.

Churn rate, often known as attrition, is a metric that can help you measure the rate at which your customers end their engagement with your goods or services over a given time period. 

You’ll encounter two types of churn when handling a SaaS: 

I. Customer Churn

Customer churn is the percentage of users that cancel or choose not to renew their subscription within a specified time frame, such as a month, quarter, or year.

The formula for Calculating customer churn is:

For example, at the beginning of the month of January, you had 200 consumers and lost 10 by the end. 

The calculation here would be:

What does the 5% churn rate mean?

It denotes that 5% of your initial client base chose not to renew their membership or service.

II. Revenue Churn

Revenue churn is the percentage decrease in your business's recurring revenue over a given period. It calculates the loss in ongoing income by dividing the lost revenue by the total beginning revenue.

The formula you would use to calculate revenue churn is as follows:

Consider the following scenario: 

100 of your basic plan users pay $200 per month, and 100 premium plan users pay $1000 per month, for a total of $120,000 in monthly revenue. 

If 5% of your clients leave, the effect on revenue varies depending on their subscription plan.

The Monthly Recurring Revenue (MRR) will be reduced by $2,000 when all churned customers use the basic plan. 

If they are a premium client, the loss increases to $10,000. 

You can determine the revenue churn rate using the formula we stated above, giving a complete picture of the financial ramifications.

7. Net Promoter Score (NPS)

Net Promoter Score (NPS) is a statistic for determining your customer’s loyalty and contentment.  You can determine it by subtracting the percentage of critics from the percentage of promoters, providing a score ranging from 0 to 100.

To ensure the long-term growth of your SaaS, you must know how your customers view your business; it would also impact your long-term growth. 

If we say more specifically, you can ask your clients the following question to determine the Net Promoter Score of your SaaS: 

"On a rating system of 0-10, how willing are you to endorse our business to a friend, a colleague, or a relative?" 

The responses divide your clients into three categories:

• 0-6: Opponents (likely to damage your brand's reputation)
• 7-8: Passive (unconcerned about boosting or detracting)
• 9-10: Promoters (will actively market your brand)

Formula to Calculate Your NPS

The NPS formula is simple for you to use:

8. Marketing Sourced Revenue (MSR)

Marketing Sourced Revenue is the part of your company's income that can be directly linked to its marketing activities. It gives a number to the effect of marketing efforts on sales, which helps you determine how well your marketing strategies are working.

MSR simply answers the key question: 

How much profit is directly related to your marketing efforts? 

It’s the monetary value that can be directly attributed to your marketing activities and represents the return on investment (ROI) from your various marketing campaigns and methods.

The calculation for Marketing Sourced Revenue is relatively straightforward:

MSR = Revenue earned by marketing activities.

Example of Marketing Sourced Revenue

Let’s say your SaaS company launches a thorough marketing plan, which includes the following:

• Targeted commercials
• Email campaigns
• Social media promos

Throughout the campaign, your company experiences a significant boost in both online and in-store sales.

Assume your total income earned during this period is $500,000, with $150,000 attributed directly to marketing initiatives. 

In this case, the marketing-sourced revenue of your SaaS would be $150,000.

This figure shows a concrete evaluation of your marketing strategies' effectiveness by showing their direct impact on your revenue. It creates a clear, measurable link between the efforts put into marketing and the financial outcomes they produce.

If you want to make sound decisions about marketing budget allocation, you must understand how you can successfully use Marketing Sourced Revenue. 

9. Lead Velocity Rate (LVR)

Lead Velocity Rate (LVR) is a metric that can track the monthly proportion growth of your SaaS in qualified leads. It’s a changing indicator of the rate at which your marketing team generates new leads. 

LVR, formerly known as Customer Velocity Rate (CVR), is very useful when you’re evaluating the effectiveness of your demand or lead-generating initiatives. 

To compute LVR, use the following formula:

Lead Velocity Rate Formula Explanation

You can detect growth patterns and set standards for future quarters by analyzing lead generation velocity month over month (MOM). 

The methodology clearly shows how effectively your key SaaS marketing metrics fit your end-of-quarter (EOQ) or end-of-year (EOY) objectives. 

By monitoring LVR, you can make timely adjustments to your marketing strategy and ensure that the leads generated are exactly what your sales team needs.

Example for Calculating Lead Velocity Rate

Suppose your SaaS company generated 750 Marketing Qualified Leads (MQLs) this month, up from 500 the prior month. 

Using the LVR formula:

In this case, the LVR shows a 50% month-over-month lead velocity rate. 

This suggests that your company's lead count is increasing rapidly. 

Monitoring such indicators allows you to measure the performance of your marketing activities and reveal if:

• They are on the rise
• Remaining stable
• Losing momentum

Why LVR Matters

Traditional sales measurements frequently depend on past data, which often slow down your decision-making processes. 

However, LVR gives real-time data and enables you to make informed decisions that provide them a competitive advantage. 

LVR can enable your team to review and improve their performance continuously.

10. Average Revenue Per Account

Average Revenue Per Account (ARPA) is a metric that figures out how much each of your accounts made on average over a certain period. It gives information about how much money each account usually brings in for your business in total.

Another important metric that is often misunderstood as ARPA is the Average Revenue Per User (ARPU).

Average Revenue Per User (ARPU) is a key financial measure that you can use to figure out how much each customer brings in on average over a certain period. 

You have to divide the total income by the number of users or customers if you want to calculate it. 

ARPU shows how well a business is doing financially and how much each user is worth.

The Formula for Calculating ARPA

You can calculate ARPA using a simple formula that can be customized to the timeframe in question. 

To calculate it, divide your Monthly Recurring Revenue (MRR) by the entire number of your consumers or users during that month. 

So, the formula you should use when calculating ARPA is:

Similarly, you have to adjust to using Annual Recurring Revenue (ARR) rather than MRR when you are using for an annual standpoint, as shown below:

Example for Calculating Average Revenue Per Acquisition

Let’s look at a hypothetical situation to demonstrate the real-world use of ARPA. 

Consider your SaaS company provides three subscription levels for the following:

• Individual users
• Agencies
• Enterprises

In this example, if your SaaS company generates $100,000 in Monthly Recurring Revenue (MRR) and has 1,000 customers across all plans, then your Average Revenue Per Account (ARPA) for the month is $100. 

This means that, on average, each customer contributes $100 to your MRR.

Tracking ARPA monthly gives your company valuable insights into how your pricing strategy and different customer segments impact your revenue.

11. Monthly Recurring Revenue

MRR, or Monthly Recurring Revenue, is the monthly revenue you generate from your users. You have to multiply the average revenue per client by the total number of customers in a given month to calculate it. 

It’s a must for you, especially if your company depends largely on subscription-based revenue streams. 

It provides fast feedback on how well your company is performing financially.

The Formula for Calculating MRR

The formula for calculating MRR is simply about adding up the profits from monthly subscriptions. 

Here's how you can accomplish it:

This formula displays your consumers' monthly commitments and helps you find out how your SaaS is performing.

Example of Calculating Monthly Recurring Revenue

Let’s assume your SaaS company charges a $200 monthly subscription cost for its product. 

In January and February, two paying customers contribute $200, for a total of $400 in MRR for both months. 

Another client joined the previous two in March, donating an additional $200 for a total MRR of $600. 

This tendency repeats in consecutive months, as you can see below:

• January MRR: $200+$200=$400
• February MRR: $200+$200=$400
• March MRR: $200+$200+$200=$600
• ...and so on.

Remember that MRR only includes revenue from your monthly subscriptions, not one-time services like setup or advising.

The goal of MRR is to provide you with a clear view of your predictable monthly earnings, focusing on subscription-based income.

12. Annual Recurring Value

Annual Recurring Value (ARV) is the total amount of money you expect to make each year from a customer's payments. It’s an important KPI for SaaS companies because it shows how much money each customer brings in annually.

From the definition, you can understand that ARV expands on Annual Recurring Revenue (ARR) to provide you with a more complete picture of your financial situation. 

Though ARR concentrates on yearly revenue, ARV doesn’t do that. 

Rather, it considers the whole life cycle of customer connections and provides you with a more comprehensive perspective on revenue projections and growth analysis.

How to Calculate Your Annual Recurring Value (ARV)

The ARV formula is based on ARR principles, including elements such as total contract income and predicted client involvement length. 

So, the exact formula to calculate ARV is:

What you need to do is divide the entire contract revenue by the number of years you expect the customer to stay with you.

This technique enables you to predict revenue streams across time, giving an operational basis for goal formulation and decision-making.

Example of Calculating Annual Recurring Value

Assume your SaaS company signs a five-year contract with a client for $50,000. 

Using the ARV calculation, you would divide the entire contract revenue ($50,000) by the number of years (5), yielding an ARV of $10,000 annually.

In practical terms, this implies you can expect to generate an average of $10,000 in income per year from this customer for the duration of the contract. 

These calculations assist you in three things:

• Setting Realistic Revenue Goals: You can use this figure to establish achievable financial targets.
• Evaluating Your Business: This average income helps assess your company's performance against set goals.

Planning for Growth: It aids in making informed decisions for your business's long-term expansion.

The Significance of Your ARV

The Annual Recurring Value (ARV) is particularly important for companies with long-term contracts. 

It offers a more tailored understanding of revenue projections than Annual Recurring Revenue (ARR), enabling you to fine-tune your strategies to achieve financial objectives. 

By considering the entire lifespan of customer relationships, ARV becomes a key tool for strategic decision-making. It helps in resource optimization and pinpointing opportunities for revenue expansion.

13. Unique Visitors

Unique visitors reflect the total number of distinct visitors that come to your SaaS website within a given time period. 

It's fairly simple: if someone visits your website five times a month, we measure them as unique visitors. 

So, unique visitors are a metric that provides a deeper understanding of your audience.

You can use tools like Google Analytics to find out how many active users your SaaS has.

Formula for Calculating Unique Visitors

Let’s break down the formula for calculating unique visitors.

Think your website has 100,000 total visitors each month, with around 5% returning for more.

So the number of unique visitors here is 100,000−(100,000×0.05) = 100,000 − 5,000 = 95,000.

As you can see, out of 100,000 total visits, you have 95,000 unique visitors.

It's like separating the actual from the recurrent visitors.

Value of Unique Visitors

Unique visitors are the users who provide you with valuable insights into the performance of your website. 

Tools like Google Analytics can simplify this process, delivering insights to help your business develop. 

So, keep track of those unique visitors; your website's success depends on it.

14. Click-Through-Rate (CTR)

Click-Through Rate (CTR) is the percentage of people who click on a given element, including a link in search findings, email links, paid ads, or social media ads, compared to the total number of engagements or views it receives.

The Formula for Calculating Click-Through Rate (CTR)

The CTR calculation gives you a number that tells you how appealing your content or calls to action (CTAs) are.

This is the exact formula for calculating CTR:

This formula figures out what number of people did what you wanted them to do, like click on a link or interact with your content.

Example of Calculating Click-Through-Rate

Let's consider this scenario: Your SaaS startup launches a sponsored advertising campaign to highlight a new feature. 

The advertisement appears 10,000 times across many platforms. 

Of these impressions, 500 users click on the advertisement to learn more about the new feature.

In this case, the Click-Through Rate is 5%, meaning that 5% of the people who viewed your ad actually clicked through. 

This insight provides a quantifiable measure of how effectively your ad connects to the audience and allows you to assess the impact of your advertising efforts.

15. Customer Engagement

Have you ever wondered how many users log in to your SaaS platform daily or which features attract customers the most?

Customer engagement reflects how strongly your customers connect with your service. It involves evaluating your established metrics, like your daily logins, specific feature usage, and other actions taken inside your service. 

This offers you a complete picture of your engagement level.

The Formula for Calculating Customer Engagement

There are different ways to engage customers, but the point is to find value in how they use your service. 

For example, a high number of daily logins or spending a lot of time shows that people are really interested in your products or services. 

This number shows how involved your customers are with your SaaS and lets you figure out how many of them might leave.

Here’s a formula you can use to calculate the customer engagement score of your SaaS:

Example of Calculating Customer Engagement

Let's say you're calculating customer engagement for your SaaS solution, which has various features. 

You assign values to specific actions. such as:

• Daily logins
• Time spent 
• Feature engagement

If your clients log in every day, spend a lot of time on the platform, and frequently use various features, then your customer engagement score will be high. 

This high score indicates strong customer interaction with your service.

By analyzing this score, you can identify which features your clients prefer, potentially phase out low-use ones, and ensure you focus on what is most important to your customers.

Wrapping Up

It's important for your SaaS company's success that you understand and use SaaS marketing KPIs. Besides gathering data, you must do strategic research and implement plans. 

These 15 KPIs can be used as a guide in the lightning-fast SaaS market. 

By now, you must have learned how customers behave and how much money you can make by understanding these KPIs thoroughly.

So it's time to put your learnings into action. 

Your SaaS business will grow over time if you monitor these KPIs and make corrections as needed. 

Contact SaaS SEO. Agency today in case you need any kind of assistance to improve your SaaS marketing KPIs and turn your data insights into more sales!

Frequently Asked Questions

1. What is the Rule 40 in SaaS?

The Rule of 40 is an easy equation in SaaS: sum your revenue growth rate and profit margin. 

You are considered a healthy business if the figure is 40% or greater. It helps to strike a balance between expansion and profitability.

We can get three distinct classes from rule 40 in SaaS:

• High growth with little profit (40%+): You're putting money into expansion, which is great!
• Low growth, high profits (40% or more): You have a significant cash flow, which is great!
• Below 40%: Change strategy to focus on either growth or profits.

Rule 40 in SaaS briefly checks your company's general health.

2. What is the SaaS quick ratio?

The SaaS quick ratio is a statistic that is unique to Software as a Service (SaaS) enterprises. It assesses the company's capacity to meet its immediate obligations with most of its liquid assets minus prepaid and delayed revenues. 

This ratio quickly assesses a company's current liquidity and financial stability in the SaaS sector.

3. What is a good sales efficiency ratio for SaaS?

A successful SaaS firm aspires to a Sales Efficiency Ratio of around 0.75 and 1.0. This range signifies efficient sales and marketing methods, providing optimal revenue from advertising campaigns. 

Achieving this balance demonstrates the company's ability to drive sales effectively and maximize profitability through customer acquisition strategies.

4. What are the KPIs for SaaS client success?

There are some critical customer success KPIs that can help you keep loyal consumers, irrespective of your industry/product are: 

• Client health score
• Customer satisfaction rate
• Churn rate 
• Customer lifetime value
• Retention cost
• Net promoter score
• Expansion revenue

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