Lean KPIs for SaaS Companies – Part II

The second part of our Lean KPIs series is here, but this time we will talk about Marketing.

Everyone who has managed a SaaS company knows that at some point in time you must start investing into marketing and business development much more than in product development (assuming that you work on a product). Growing your user base and respectively your company is probably the hardest thing you have to do and the goal of this post is to suggest key metrics that you should collect, monitor and act upon. Unless you have a scalable way to track your business, the investments that we mentioned above may turn into your biggest mistake and could actually bury your business faster than you’ve imagined.

It’s ALL about ACTIVE Users

You’re in the SaaS business – you need to measure users. Nothing is more important than that, at least from the marketing and BizDev point of view. The more users you get, the more you convert into customers (assuming some sort of freemium model), the more successful your company is.

Be careful, though. If you focus on total number of users or new users or anything else that doesn’t give you a good idea about the number of ACTIVE users, you might be the victim of your own self-deception. Total users always grow, new users by definition are something good. You may have 1 000 000 users, you may be getting 100 000 more each month, but you would be horrified to discover that you have just 10 000 active!

Measure whatever that you want to measure, but make sure to know how many active users you have.

Website Visits (+Unique Visits + %New Visits)

SaaS by definition makes your website your most important weapon to conquer new business. If you do not track the number of visits then you might not know whether your business is growing or shrinking. You can do that with Google analytics or similar tool, but definitely track that on a regular basis.

Pay attention to the number of unique visits. If you have a lot of visits from a handful of people you might not be able to scale your company. Always remember that you need more and more new users and therefore the unique numbers must also grow.

Of course you need to track the %new users each week/month. Try to keep it constant or a growing number. If your new visits % starts going down, you should probably consider a marketing campaign (link building, adwords, guest blogging, etc.).

Bounce Rate

Bounce rate is a metric that shows you how many people landed on your site and left it without going to another page. The lower your bounce rates are the better (it is usually % of all visits). Bounce rate of 0-30% is good, 30-60% is tolerable but something to improve and anything above 60% is not good (all of these come from my own experience, numbers can vary from business to business).

Key element to tackle bounce rate is to experiment with your website – change your slogan, front page, registration form, etc. The obvious goal is to improve, but if you happen to make things worse, make sure to detect that ASAP and take the necessary steps to revert the breaking changes. This is only achievable through regular collection and analysis of the KPIs that we talk about.

Again, don’t focus on the totals only. Your site is likely to have more than one landing page and each page has its own bounce rate. If your home page has great bounce rate, but your pricing page performs terrible, you should probably think about your pricing, right?

Last Page to Visit

Visitors’ flow is somewhat hard to get in a comprehensive way, but a very important part of exploring your users behaviour. If there is a page on your website that visitors get to, but always leave after that, try to figure own why that happens. I will go no further with this part, because there are thousands of possible interpretations and I risk to mislead you, but please make some efforts to investigate.

Social Engagement and Growth

Just a few words here. If you have social presence (Facebook, twitter, g+, linkedIn, etc.) make it measurable, especially if you put a lot of effort into it. You might be active, but if your users’ engagement is low, there is probably something to be changed. Don’t just throw content out there, make it a quality work and not a quantity work. From our own experience people engage more easily in twitter and Facebook, so you may start with them first.

There are probably many more KPIs that you can or should track. Each business is unique and the things that make sense monitoring vary. Start with your best guess and improve!

Happy Kanbanizing!

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