A top SaaS product manager has a lot on their plate. They need to understand complex software, complex business models and the intricate relationship between the two. Many SaaS products are sold on a subscription model, but SaaS product managers still need to know how to measure revenue in order to increase it over time. In addition to providing SaaS metrics for measuring revenue growth, this article also discusses how SaaS metrics from user churn can help SaaS product managers determine what features they should be looking at improving and when they should implement them. Finally, saavn metrics of new customer acquisition will be covered along with tips for gaining more customers that stick around long enough to become paying customers. Understanding SaaS metrics is the best way SaaS product managers can get a good idea of how their SaaS products are doing.
SaaS based product development is a SaaS product manager’s bread and butter. SaaS product managers are responsible for managing SaaS products from end to end, through every stage of development including what features will be included in the SaaS product and when they should be implemented. SaaS based product development has a lot of moving parts, which makes it difficult to manage without SaaS metrics from both revenue growth and user churn. In this article we’ll cover SaaS metrics for measuring revenue growth, user churn, and other useful SaaS metrics for SaaS based business development such as new customer acquisition rates.
SaaS product management is responsible for SaaS product marketing, SaaS product development, SaaS analytics, SaaS sales and SaaS pricing. This includes knowing the needs of SaaS users and communicating it to SaaS developers before they begin developing new features or fixing bugs in the SaaS software.
SaaS product managers also monitor SaaS competition and advise on how to use tools like social media marketing, search engine marketing (SEM), user experience design, usability testing and email deliverability to optimize results on these channels.
SaaS product managers are responsible for ensuring that SaaS products contain all the necessary features while maximizing profit margins. They also determine what metrics will be used to evaluate company performance against goals set by management.
The SaaS industry seems to be growing at an exponential rate, meaning there are more SaaS companies than ever before. This makes it easier for SaaS startups to find initial traction, but also becomes increasingly difficult for SaaS startups to survive once they release their product into the market if they do not have solid SaaS metrics in place. Furthermore, even successful SaaS companies are facing increasing competition from other successful SaaS companies that offer similar products or services, which increases the importance of knowing what SaaS metrics should be used in order to ensure that one’s SaaS company does not enter a slump and stagnate in the SaaS marketplace.
One of the most important SaaS metrics for SaaS startups to consider is customer churn, which measures how many customers are canceling their subscription to a SaaS product or service over a given period of time. For SaaS companies that have an advantage in pricing compared to competitors, one of the most significant SaaS metrics for SaaS companies to pay attention to is customer acquisition cost (CAC). Another crucial SaaS metric for SaaS startups to monitor is CAC-to-customer-lifetime value (LTV), which measures how much revenue each customer spends during their subscription lifetime when they are subtracting any discounts from the calculation.
Other vital SaaS metrics for SaaS companies include SaaS net promoter score (NPS), SaaS churn rate, SaaS conversion rate and SaaS monthly recurring revenue (MRR).
1. SaaS net promoter score (NPS)
NPS is a measure of how willing people are to recommend a product or service to others. NPS is calculated by taking the percentage of customers who are Promoters (scores 9 or 10) minus the percentage of detractors (scores 0 through 6). The SaaS start-up then takes that result and adds it to the percentage of customers who are Passives (score 7 or 8) to get their NPS number.
The higher an NPS score, the better it is for a SaaS business in general. A SaaS business with an NPS of 50 is probably doing better than an SaaS startup with an NPS score of 10.
2. SaaS churn rate
Churn rate is the percentage of customers lost during a specific time period, usually one month or year. SaaS companies can calculate their SaaS monthly churn by taking its total number of SaaS subscribers at the beginning of the month and subtracting it by the total number of SaaS subscribers at the end of that month.
A positive SaaS growth rate means that more people are subscribing to your SaaS product as time goes on while a negative SaaS growth rate means that less people are subscribing to your SaaS product as time goes on. In general, a SaaS growth rate that is greater than 0 percent but less than 25 percent is considered extremely SaaS healthy.
A SaaS product manager should strive to create a SaaS environment where employees are provided with the necessary resources to achieve their SaaS goals, thus creating an organization that can adapt well in dynamic business environments. To accomplish this task, SaaS PMs need to remain aware of overall SaaS company performance and SaaS customer satisfaction through constant assessment and SaaS improvement initiatives. A strong SaaS product team is one of the most important elements of an effective company and determines the success of its SaaS projects and products under development.
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