The main 3 things that I as a SaaS founder look at are 1,2,3
we spend all our time talking with saas companies.
Culture KPIs - 15Five.
This is the table we use to update our investors each month, so in this talk we’ll basically be going through these KPIs.
This is actually part of a larger 2 page investor update template created by our investors.
As you can see this covers the funnel and the sales and revenue metrics.
So this is a kind of a traditional e-commerce style funnel (they use words like exposure, discovery, consideration, which no-one in SaaS uses).
But in SaaS we basically do the same things.
Optimising all parts of the funnel is kind of key to success. Right now we’re doing a great job at converting the on-boarded trials, but we need to get much better at converting visitors to trials.
You can break the funnel down into 4 areas of responsibility - Marketing/Product/Sales/Success
I was speaking with one of our customers recently and they have their visitor to signup conversion rate at 30%.
Marketing is the top of the funnel - signups usually means trials in SaaS and these are the best types of leads - it can mean they attended a webinar or downloaded a white paper.
Measuring the marketing KPIs you can use really basic stuff like Google Analaytics or more advanced stuff like mix panel.
On-boarding is kind of a collaboration between marketing and product
Intercom can help with app usage/engagement
Inside sales usually kicks in once the user signs up for a trial (or webinar, white paper, etc) and their job is to basically convert the trial into a paying customer…on the highest (or right) plan for the customer.
The dream - the vision that’s projected is of self service.
Inside sales model - lead gets qualified.
measure this in cohorts
For the month of February, take all the trials that have their 30th, 45th, 90th day falling in February and see what % has converted into a paid customer.
It just gives it more meaning - so you can say ok, our trial to paid conversion rate at day 30 is 15% but that shoots up to 25% by day 90.
Monthly recurring revenue, subscription revenue normalised/amortized to 1 month- it’s the amount of revenue you would generate all customers are paying monthly and non cancel or upgrade or downgrade
Early stage SaaS you shouldn’t really be spending a lot on customer acquisition, this one becomes important once you have product market fit and want to just grow as fast as possible in a financially sound way.
Segmentation is key - filter out annual plans, and only run churn analysis on monthly plans.
For the purpose of understanding user behavier
this is actually the title of a blog post from a week ago by one of our investors - I’ve stuck the link at the bottom.
But you can see on the left what happens when you have negative net churn of 5% vs positive net churn of 5% - basically over 12 months this translates to a nearly 80% differential.
The best way to understand your churn and therefore reduce it is to use cohort analysis to see where churn is highest.
The first time you see this it’s a little confusing - time is going in two directions, half the cells are empty, etc. We actually have a cohort analysis cheat sheet at the front you can pick one up later.
It’s all about MRR but you still have to run your business as a business, and measuring your revenue, expenditure and balance is still important.
37 signals/basecamp got this down below 5 minutes last year.
1st response time - really important especially if they’re not paying - and they ask for support and then from your competitor and you answer 10x faster.
+ maybe lincoln murphy on the saas marketing metrics.
one thing we’ve done that has been really popular is publish…
KPIs for SaaS Startups
KPIs for SaaS Startups
SaaS Camp, Startup Camp Berlin - March 13th 2015
Founder & CEO at
MD of EMEA then Asia
High level SaaS KPIs* (*Key Performance Indicators)
1. The funnel
2. Sales & revenue metrics
3. Support metrics
Search results, content, social
Browsing site, creating trial
On-boarded active trials
Up-sell & retention
Marketing & product’s KPIs
Visitor-to-signup conversion rate
TTV - Time to value
∙ Main indicator of success is the revenue metrics.
∙ They are a crucial part of the funnel and will raise the Trial-to-paid
You should aim for 20%+ in the healthiest SaaS markets:
✓ USA + Canada ✓ UK ✓ Nordics ✓ ANZ
Signup for a trial, if you like it put in your credit card details and buy
This rarely happens over $500 MRR
You call, email, call, email
Lead > Prospect > Opportunity > Customer
Trial to paid
∙ Measuring trial-to-paid conversion rate.
∙ You should measure this in cohorts.
e.g. 30-day, 45-day, 90-day trial to paid
e.g. what % of trials created 45 days ago
have now converted.
New business MRR
What is it?
The rate at which you are losing customers or revenue through
Segmentation is key to getting meaningful Churn metrics.
Best practice is to recognise churn at the end of the paid up billing
Churn that isn’t really churn
What is a reasonable level of Churn?
✓ Most SaaS companies selling to SMBs have quite
high levels of monthly churn 3.2% customer churn.
✓ The more up-market you go the lower the churn rate (usually)
✓ Many public SaaS companies have negative net churn, as high as 20%
Most SaaS startups should aim for negative MRR churn
Many of the best known public SaaS companies have negative churn,
e.g. New Relic, Zendesk, but not a requirement to be a unicorn, e.g.
Image credits to Tomasz Tunguz
Cohort analysis is the best way to truly understand how your
subscriptions evolve over their lifespan.
Revenue offset for refunds and discounts
How much cash you spend each month
Cash in the bank
∙ Average 1st response time
∙ Average full resolution time
∙ Customer satisfaction score (CSAT)
∙ Net promotor score (NPS)
Where to learn more…or rather who to learn from
Jason M. Lemkin
SaaS Metrics Cheat Sheets
Grab your printed copies at the front