When it comes to Key Performance Indicators (KPIs) and metrics there is no shortage of ones to choose from. The decision as to which metrics to focus on is a highly individual one and will vary depending on numerous factors, including:
1/ Whether you are B2B or B2C ?
2/ What the average contract value is ?
3/ What your sales cycle and sales process look like (or do you offer a self-service ‘Get Started’ application)?
4/ What the strategic goals are, i.e. are you optimising for growth or profit?
5/ What applications you are running?
6/ Whether the code has been implemented correctly?
7/ What the current traffic volumes are ?
8/ What the team size is ?
9/ Whether or not you have achieved Product Market fit?
So your starting point has to be aligned with a fundamental understanding of the goals of the business, as well as your current context.
Having alignment with your key stakeholders will also be key. This is not a decision that should be taken in isolation *just by marketing*. SaaS businesses are complex and if one of your goals is to support sales efforts, then you need to ensure the metrics you choose align with the sales team’s expectations.
The following elements are also worth thinking about:
1/ Is the data point actionable? Can you make decisions based on the data to improve it?
2/ What additional elements need to be considered? There is no point in having “number of leads” as a single metric if the actual quality of them is a critical issue.
3/ By drawing attention to certain metrics, colleagues will usually focus exclusively on these. It’s important to ensure they are not neglecting other areas instead.
4/ How easy is the data to report on and what process is in place to ensure action is taken where needed?
5/ What confidence have you got in the data? Take Google Analytics data - applying a filter to data sets is vital and it will fundamentally change the data you view. For example: filter out traffic that does not stay more than 5 seconds or filter out traffic from your IP address.
It’s also worth noting that:
1/ Keep the number of metrics you want to focus on to the bare minimum.
2/ “Apples to Apples” comparisons of data with other companies is largely a wasted effort, given the many variables at play.
3/ Google Analytics represents one key source of data, alongside the likes of Google Search Console, Google PageSpeed Insights and 3rd party tools like SEMrush, Moz, Ahrefs, Pingdom etc.
4/ Thinking about how you report on the data is also crucial. Will the consumer of the data be easily able to spot trends and patterns, and will you be able to provide insights as to any changes?
5/ The following metrics are secondary to metrics related to the core business unit economics, including margin and profit that your CFO should be tracking and sharing with you.
Key Metrics to Consider:
As you’ll note from the above, I’m recommending these following key metrics with a big health warning. They represent 5 that I tend to track with most of my early stage B2B SaaS clients but the exact composition of the key metric set you’ll focus on must reflect your unique circumstances and must never be viewed in isolation/without context.
For more mature SaaS businesses where they have validated Product-Market fit and are on a scale-up trajectory, then metrics like MRR (Monthly Recurring Revenue), CAC (Cost of Acquisition) and LTV (Life Time Value) will become vitally important, but these can be hard to calculate in the early days.
1/ Site Speed
This is a simple metric that is often overlooked by SaaS marketers (‘isn’t that a metric for the CTO to track?’). Your site may be cached locally so you are now aware that ‘speed is an issue’. A slow site is a real silent killer, so being aware of your site speed and seeking to continually optimize it is a key requirement for all B2B SaaS businesses.
Top Tip: Check your Google Analytics to see what country your traffic is primarily coming from (often the US) - or better still your sales leads in your CRM. Ensure that you have a dedicated server in that market to deliver a strong performance. In this example, the US is the main traffic source for this account but the site speed is far worse than other countries with a lot less traffic. (Source: Google Analytics).
How to Track?:
2/ Traffic
Most SaaS businesses are seeking to generate leads or conversions from the traffic they acquire. Hence, the more traffic you can attract the greater the number of leads (assuming similar conversion rates). Therefore, one of the metrics should be to measure the marketing function against their ability to grow traffic.
Again this metric comes with a whole load of health warnings. As a basic metric, it is too crude. Growing traffic that simply bounces off the page, or growing traffic on the back of paid acquisition, will achieve growth but at a cost.
Nonetheless, assuming a strong correlation with conversions, increasing traffic month-on-month (except for seasonal dips like December and August) is a useful metric to track.
As mentioned earlier, tracking views/visitor numbers cannot be in isolation. Bounce rates, click through/conversion rates and average time spent on-page represent additional factors that need to be considered to ensure the quality of the traffic is being accounted for (as they indicate ‘engagement’).
Top Tip: Use the filter in Google Analytics to apply a segment to filter out ‘poor quality traffic’. Traffic to filter out could include:
Internal IP Traffic
Traffic from non-target geographies e.g. India and China
Traffic related to visitors logging in to your application (existing customers)
Traffic from dodgy backlinks
Of course, the net effect of applying these filters is that you’ll realise your core traffic volumes are overstated, if viewed as a proxy for an audience that could represent leads.
How to Track?
3/ Marketing Qualified Lead (MQL) and Sales Qualified Lead (SQL)
As mentioned above, B2B SaaS spans a huge range of businesses. At one end of the spectrum is self-service ‘Get Started’ applications, at the other 7-figure enterprise solutions with long sales cycles.
For those offering applications that are a ‘considered purchase’, or are likely to require multiple decision-makers, a sales process may be needed. These sites often rely heavily on content (inbound marketing) as well as outbound sales for their B2B lead generation.
These content pages typically have ‘call to action’ buttons (CTA’s) which represent pages where you are seeking the visitor to enter some details as a basis for engagement. These CTA’s can include:
Get Started
Request Demo
Download WhitePaper
Learn More
Read Case Study
These are usually gated and once the form is filled in, the visitor will receive a follow-up (ranging from a phone call in the case of a demo request to an email response for a download).
The number of MQL’s and SQL’s per month (applying the usual quality filters) represent important metrics for B2B SaaS companies to track.
Top Tip:
Ensure your CEO/Head of Sales sign off on the exact definitions for MQL’s and SQL’s to ensure that the quality of the lead is easy to assess. Otherwise, sales may argue that the leads marketing is generating are of poor quality. It’s also worth using a tool like Zapier to guarantee that leads flow smoothly into your CRM.
How to Track?
Via your Content Management System
Via your CRM
4/ Conversion Rates
For those sites that are more transactional the ‘conversion rate’ becomes a key metric. You are keen to encourage immediate adoption, trying to incentivise visitors to Get Started with a Free Trial or to Create an Account. Again the goal should be to increase the number of conversions by:
Driving more traffic to the landing pages
Improving the design of the pages to increase conversions
Improving the quality of traffic coming to these landing pages
Again it is important to consider the following:
What qualifications should I add to the form field to reduce the quantity of ‘poor leads’?
Have I got a smooth onboarding process to ensure the lead sees value early and converts?
Is the on-page messaging appropriate to help qualify the leads?
Top Tip:
Use some fields on the main forms to disqualify poor quality leads. If turnover/company size/location are key criteria in qualifying, add in some mandatory questions to help filter at the start. If the contact fails to meet the threshold levels you’ve set, then screen them out at this stage before they engage with sales personnel.
How to Track?
Via your Content Management System
Via your CRM
5/ KeyWord Ranking
There are several ways to attract traffic to your site ranging from:
Direct sources (catch-all, including people typing your URL into their browser)
Organic
Paid
Social
Referral
For most sites, the top three represent the key sources.
Ensuring you have strong Search Engine Optimisation for your site is vital, as it helps improve the quality of traffic and lower the cost of acquisition.
Once you are clear on your keyword set, and have created dedicated pages for each of them, you can then start tracking where you are appearing in Google for these terms. Anything appearing beyond position 5 is vulnerable to appear on page 2 and thus is unlikely to garner many clicks. Again, tracking rankings needs to be based on clarity regarding your keyword set, ensuring there are decent search volumes, and also taking into account how competitive a term is.
Why are we measuring these?
Unless you have a large budget to acquire this traffic via paid search, you need to optimise your content efforts to ensure they are paying off. As I describe in this post, most companies fall short at this stage: Ten Tips to Make Sure You Are Not Wasting Your Time Creating Content
How to Track?
Summary
As mentioned above, these represent some of the key metrics to track. Ensuring that your broader marketing efforts are profitable means that these metrics need to be discussed and shared with other stakeholders including the CFO and Head of Sales. After all, there is little point in growing metrics if they are not contributing to the top line. The metrics I have chosen are based on the following assumptions:
A faster site performs better than a slow one
Increased traffic correlates with increased sales
Increased lead numbers (with a quality filter) translates into increased sales
Increased keyword ranking reduces the cost of acquisition
All of these activities are profitable
Finally, the above has focused exclusively on online metrics. Of course, it is important to ensure that a culture of tracking against metrics spans all marketing activities. In recent years there have been advances in this with the emergence of applications like Akkroo (An Integrate Company) which helps Chief Marketing officers track event ROI i.e. your return on exhibiting at conferences.
About Alan Gleeson
Alan Gleeson is a B2B SaaS Marketing Consultant based in London with a passion for helping B2B businesses to grow.
Follow Alan Gleeson on Twitter or visit Work With Agility to learn more.
Download my Definitive Guide to B2B SaaS Marketing
Resources:
The best source of content on metrics and data analytics is available on Occam's Razor by Avinash Kaushik.
Neil Patel is an excellent source for lessons on everything from Content Marketing to SEO.
SaaS Metrics 2.0 – A Guide to Measuring and Improving what Matters by David Skok is one of the most comprehensive guides available.