3 Analytics to Keep an Eye on for Your SaaS

SaaS companies are a data and analytics gold mine. It may seem like there are an overwhelming number of data points you need to keep track of. 

 

However, by mastering these three essential metrics, you can better understand your SaaS company's needs and goals. Read on to find your SaaS agency guide.

 

1. Customer Lifetime Value (CLTV)

 

If you only understand one metric, let it be CLTV or customer lifetime value. One of the essential measures for determining your customers' long-term staying power is client lifetime value. 

 

It's a means to evaluate the advantage received from a long-term customer connection with your business - or how much potential value each customer brings to your business. 

 

Finding your CLTV helps you understand which marketing channel is most effective in attracting the most customers at the lowest cost. Understanding CLTV allows us to better anticipate future marketing actions and increase profits.

 

Customers' longevity is an indicator of whether our solution meets their demands. Furthermore, keeping a client is less expensive than acquiring new ones. All consumers – current and future – gain when CLTV is used as the primary criteria for success.

 

Calculating client lifetime value is as simple as multiplying the average order amount by the average number of purchases per year multiplied by the average retention duration in years. This determines a customer's average lifetime value based on historical data.

 

2. Marketing Qualified Leads (MQLs)

 

MQLs or marketing qualified leads have demonstrated interest in a product or service through marketing channels or campaigns. This might be anything as simple as downloading an eBook or signing up for your email. These are excellent techniques to see how your marketing efforts assist in the lead generation process.

 

To get the most out of marketing, it's critical to have reliable data on MQLs. Your SaaS will expand if you regularly discover and pursue the hottest prospects. Some lead generation channels and campaigns generate higher quality leads than others. 

 

While marketing initiatives might generate leads, those leads' behavior drives marketers to classify them as MQLs. They initiate some contact activity to learn more about what you have to offer. Some examples of MQL actions include downloading a whitepaper, requesting a software demo, signing up for a webinar, or of course, contacting your team for more information. 

 

3. Monthly Recurring Revenue (MRR)

 

Understanding your monthly recurring revenue (MRR) helps you forecast and establish a benchmark for performance. MRR is easy to calculate; simply multiply the number of monthly subscribers by the average income per user to get the total revenue per user. MRR gives insights into what jumps you can take to develop your business by providing a realistic picture of your company's revenue potential. 

 

You may start setting goals to increase your incoming income once you know how much you're making every month. MMR is the lifeline of any SaaS firm, as recurring income is at the heart of your business model. Knowing how much it takes to turn a prospective lead into a client is critical for any SaaS company looking to scale profitability.

 

MRR is imperative for establishing accurate sales estimates and planning for short- and long-term business expansion. You can forecast next month's revenue and decide what adjustments you need to make in your sales efforts to enhance revenue by examining your monthly financial performance. 

 

Also Read | Revenue Marketing: Elements, Importance and Strategies

 

CLTV, MQL, and MRR are essential for every SaaS business to track and manage. Your SaaS business can observe performance and create strategies to increase revenue and growth potential by understanding these three key metrics.