It’s that time again. The end of the quarter is approaching – Financial Controllers are pulling revenue data, and teams across the business are pulling performance reports against core metrics.
Whether this data is used for internal reporting, for board decks, or pitch decks, it’s a busy time. Combine that with rounding off quarterly projects and the last push for sales, the temptation is to look at your numbers at a glance, either on a spreadsheet or as a graph on a slide, to see if things are moving in the right direction. You’ll probably use this high level view to make decisions about the quarter (or quarters) ahead too. But SaaS metrics can do so much more for your business and its growth if you have access to the right data and know how to use it.
In this article, we’ll talk about what your metrics should be doing for your business, how to draw meaningful insights, and how to use those insights in practice.
Getting the most out of your metrics
SaaS metrics are the key to understanding more about what’s really happening in your business. That’s everything from how it’s growing, to how customers engage with your product, and where you have the advantage over your competitors, to name just a few.
You can use this information to make data driven decisions about the future, fix issues before they become problems, and determine the most valuable areas for investment.
How effectively you can do this is dependent on a few factors, including:
- Tracking the right metrics and understanding what each tells you about your business. There is an abundance of metrics in SaaS, you can’t (and don’t need to) track them all. What you need to do is find the ones that tell you what you need to know (our A-Z of SaaS metrics is a great place to start).
- The accuracy of the data. To make business decisions, you need data you can trust. For this, it’s helpful to have a single source of truth for your core metrics and revenue data - rather than having to draw reports and match data from a number of sources.
- The accessibility of the data. Pulling the reports you need shouldn’t take your team away from more valuable work. Use systems with solid reporting functionality that allow you to get the data you need in a matter of clicks, not quarters.
- The systems you use to access your data. Use systems with functionality that lets you dig a little deeper into your key performance indicators (KPIs). This includes:
- The ability to segment performance against metrics by customer type, geo, products, payment method.
- Access to benchmark data so that you know what “good” looks like (or reversely, where you are underperforming) compared to others. This could be against your previous data, against competitors, or against the industry.
Once you have a solution that allows you to pull trusted, real-time data on the metrics you care about, you’ll be able to use it for so much more than reporting.
Here are three ways to use SaaS metrics data in practice.
1. Tell a compelling story
To a degree, metrics tell a story on their own. It might be the story that revenue is growing month on month, or that your team has doubled over the past year. But when it comes to raising funds or reporting to the board, it’s on you to use metrics data to tell a compelling story about your business, one that explains the ups and downs and excites people enough to back your business, mission, and vision.
A good way to start is with your revenue trajectory, growth rate, and the size of your business. Show these figures over time, make predictions for the future, and add annotations that mark significant events to show their impact and give depth to the story narrative.
Other core metrics to use here include:
2. Understand your customers (and take action)
Customer centric metrics tell you how customers are engaging (or aren’t engaging) with your product. These include:
When you have this data, segment it to understand more about subsets of your customer base, you can do this by:
- Customer cohort (e.g. based on how long they have been a customer)
- Customer type (e.g. business type, or consumer demographics)
- The package they are on or the product they use
- They payment method they use
Segmenting in this helps you take more targeted action. For example, you might identify which customers are most likely to churn and take steps to prevent it or find your happiest set of customers and target them with upsell opportunities that could add even more value.
3. Use benchmarks to know your competitive advantage
Your MRR increasing month on month is surely a good thing but how does your growth compare to that of your competitors? Or of the industry as a whole?
That’s where benchmark data comes in. Using industry averages or metrics data from others in the field tell you where you sit against the competition and can be used to inform your targets going forward.
Access to SaaS benchmark data can often be found manually in industry reports, usually at the end of a year or quarter. You can also look at performance reports from public companies. Alternatively, there are analytics tools that have benchmarking functionality – this provides a more automated solution that allows you to quickly see how you compare.
Get to grips with metrics
Ready to make the most out of your SaaS metrics? Head to our learning hub for more guides, resources, and expert insights into using metrics to drive growth.