Making informed, data-driven decisions is an absolute must if you want to see measurable growth of your SaaS product. But identifying if your marketing is moving in the right direction can be a challenge for non-marketers, as there are so many things to keep in mind. To make your life easier, we have gathered and explained key metrics, the understanding of which will help you improve your strategy.
How does B2C SaaS Marketing and B2B SaaS marketing differ?
The way you can build your marketing activities and measure their success depends greatly on whom you are selling your service to — businesses or individual clients.
B2B SaaS companies often find it easier to identify and segment their target audience, and these audiences usually have a budget available that they set aside for tools and software to improve their business. B2B SaaS marketing efforts often have lead generation and customer engagement as a primary focus.
B2C SaaS companies, in turn, have a wider audience they can appeal to, but which is harder to define. Their target consumers may not have specific budgets that they are planning to allocate for certain services, so businesses tend to attract customers by offering a free trial first, and then convert users to a monthly subscription model. The marketing focus here often falls on brand building.
The biggest difference between SaaS B2B and B2C marketing is their lead attraction and conversion process: while B2B leads require longer nurturing and relationship-building, B2C clients use an emotional buying process. The most efficient channels for these models also vary — B2B SaaS businesses attract leads well through Linkedin Ads, content marketing & social media advertising, while Facebook, Google Ads, and Twitter work better for B2C.
Brand Awareness metrics you need to track
Creating a strong brand is critically important for SaaS businesses to differentiate themselves in highly competitive markets. By tracking your brand awareness performance, you will be able to lower user acquisition cost and track activity retention. Brand awareness is key to starting a word of mouth growth loop, generating a constant pool of customers from referrals. This is generated through PR and brand marketing.
Here are metrics that will help you track brand awareness:
Direct Traffic Volume
Direct traffic is the amount of web traffic you receive from users who visit your website through a URL directly from their browsers. It shows people who already know about your brand or at least know the address of your website. This metric is the most sensitive to brand strength. In the absence or insufficient amount of direct traffic, awareness of your marketing activities will fall.
Pro tip: It is best to work with this metric through brand campaigns aimed at targeting consumer pains and insights
Branded Search Traffic Volume
Branded search traffic is calculated as the volume of visits to your website that have arrived via a branded keyword on a search engine over a given period of time. It is generally looked at as a trend over time to give an indication of how you are growing brand awareness.
Not everyone remembers the name of your site or brand perfectly, so search queries related to the name of the company are also an important metric at the awareness stage. The total number of these requests also responds to efforts towards brand development. The conversion of such traffic into visitors is usually provided by SEM campaigns and SEO for branded queries.
New Visitors
The name speaks for itself. If SaaS operates on a wide market, the influx of new visitors (who then fall into the marketing funnel) is critical for development. If the amount of new visitors falls, you should check the results by channel and advertising audience.
You can improve this metric by working out and testing various segments of your target audience, expanding the geography of the display, and launching creative and branded advertising campaigns.
Pro tip: A constant organic (without increasing advertising costs) increase in new visitors may indicate that you’ve found PMF (product-market-fit).
Mentions
Brand awareness is built not only through the media you own (your own socials & blog) or paid media, but also through earned ones — mentions by other media.
Pro tip: It is worth tracking not only the number of brand mentions, but also their context and placement sites. The best tactic can be considered active participation in the process of creating and distributing content (leading, distributing your materials and creating the necessary newsbreaks). It’s a must-have in most cases when we talk about complex SaaS.
Content Marketing Metrics to track
Content has always been the most efficient marketing activity. Here is how to identify if your content is relevant and valuable for your audience.
Organic Search Traffic
Part of the content you create should always aim at satisfying the questions that the audience is looking at on the Internet. By tracking this metric, you can judge the success of your SEO efforts. On average, this type of traffic is quite cheap, and increasing its amount can significantly reduce the cost of reaching goals down the funnel.
Pro tip: Be sure to divide the metric into branded and non-branded queries. Additional segmentation (by SemRush for example) is also informative and allows you to focus efforts in the right places.
Engagements (across channels)
This is an intermediate metric that directly signals the quality and value of the content you create. It is important to understand that the same content can be perceived differently in different communication channels, which in turn is associated with differences in the audience and in the stages of the funnel in which this audience is located.
Pro tip: It’s best to measure engagements for each stage of the funnel separately, keeping a clear view of the quality of the content at each stage. For awareness, this can be one of the main metrics.
Session Duration & Percentage Scroll
These are metrics that show you user behavior. We put them together because they should be evaluated in combination when you measure the success of your content. They can be used to judge how interesting your content is and if it strikes the audience’s needs & pains.
SEO Metrics for SaaS
Using paid search is not profitable for many SaaS companies as it is too costly, so organic optimization is a strategy most SaaS companies choose. Track how your website and content performs with the following metrics:
Traffic quality
Keep in mind not only the amount of traffic (clicks), but also its quality. For that, look at organic traffic and organic conversion together. It can occur that the traffic has lowered, but the conversion rate is growing. Conversion is usually higher for branded organic traffic, as these are people who come looking for you specifically.
Structure of the traffic shows the percentage of branded and non-branded traffic you get — in other words, whether people get to your website by looking for your exact brand, or by looking for the services you offer.
Pro tip: Your goal is to catch non-branded demand and get top position within it, so the conversion from non-branded traffic is as high as conversion from brand-related queries.
Keyword Rankings
Always keep in mind where you are ranked based on your target keyword and target geo. This is a benchmark of your progress, showcasing the effectiveness of your activities
Impressions
Impressions symbolize how many times your web page has appeared in Google search results, even if the user didn’t click on it. It is an early indicator of the success of your content & SEO campaign, and means you are creating content that is potentially valuable to your audience. Impressions should always be growing.
User Behavior Metrics to track
Getting leads and converting them to customers is a primary goal for any SaaS business. Here is what to look at to track your customer acquisition efforts:
Unique Visitors
This metric allows you to clearly see the cost and effectiveness of the acquisition channels without distorting the data with duplicate website visits – a mistake you can make when looking at the session numbers.
Pro tip: If the increase in traffic does not directly correlate (one thing has grown — the other has grown) with unique visitors, then in terms of channels you are buying the same audience.
Click through rate (CTR)
If we talk about paid user attraction, then this metric can rightly be called the main one for CPM advertising models (payment for impressions = most social networks and display). With this metric, you can test both offers and design, key messages, and more.
Pro tip: With systematic work on optimizing this indicator, you can significantly reduce the cost of paid user attraction, as this metric has the strongest influence on the formula.
Conversion Rate
In most cases, we attract traffic keeping in mind a specific goal or task that we need to achieve with it. Conversion can be both specific user actions (registration, request), or compliance with certain patterns (interest, qualifications). A systematic approach to testing and optimizing (CRO) key pages and/or specific user paths allows you to improve this indicator.
Pro tip: You should always clearly separate conversions by goals and business value, prioritizing optimization work.
Cost per Lead (CPL)
CPL measures the cost effectiveness of marketing campaigns and how well it generates leads for your sales team. It can help with the tracking and planning of your marketing budget.
Pro tip: The ultimate goal, of course, is to minimize the cost per lead. A low cost per lead with a high volume of quality leads is a good indicator that your campaign is doing well; but, if your cost per lead is too high, continuing the campaign is extremely difficult to justify.
Сustomer behavior metrics
Customer acquisition cost (CAC)
The cost of acquiring a new customer should always stay on top of your analytics, as it may influence your target audience choices. For example, customers with a high willingness to pay may end up being too costly to acquire and maintain, pushing you into a different part of the market. The flipside can be true too, where freemium acquired users may be putting a burden on your revenue model.
Pro tip: Essentially, customer acquisition cost is the other side of the pricing equation, allowing you to completely understand what your margins, revenue, and profit will look like as you grow. Your success depends on knowing these numbers to circumvent the death of your business under the weight of its own inefficiency.
Customer lifetime value (CLTV)
SaaS’ entire business model revolves around the lifetime value of the customer. This metric captures how much recurring revenue you expect from new customers over the duration of their association with your company. Examining just how many months of revenue from a customer are needed to recover these costs becomes essential as your business grows, as it may take much longer than you think for your company to recover CAC and begin to profit.
Churn rate
Losing customers can happen sometimes for reasons beyond your control, and it is costly to replace lost customers by acquiring new ones. Make sure you keep track of churn rate so you are not losing revenue. There are two main parts to this:
Customer churn rate shows how well (or poorly) your company is doing at retaining customers.
Recurring revenue is critical to business stability, so monitoring the revenue churn rate is important in evaluating the impact of customer churn.
Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC)
It measures the relationship between the lifetime value of a customer and the cost of acquiring that customer. It is a signal of profitability.
Pro tip: If you are a scaling SaaS business your LTV:CAC ratio should be between 3 and 5.
A lower ratio means that you may not have a good product-market fit.
A higher ratio (above 5) is an opportunity to invest more in sales and marketing. A ratio of less than 1 means lost revenue on every customer.
To reduce your CAC and optimize profit, SaaS companies need to optimize their funnel by quantifying each step of the process and understanding how many visits become leads, how many leads move to opportunities, and how many opportunities become customers.
Multichannel marketing mix helps normalize LTV:CAC and is actually a secret that helps our SaaS clients scale. For example, when users know and trust your brand, they are more likely to click on your blog while searching for solutions to their problems. This combination of efforts helps to make sure you don’t lose any opportunity to connect with your audience.
Wisely choosing your channel mix can also help you reduce your marketing costs. For example, for SaaS solutions with extremely high PPC prices, it is wise to use organic channels, while Linkedin is more effective than Facebook for B2B SaaS companies.
These are just examples of in-depth insights we use when crafting a growth marketing strategy for our SaaS clients.
How to understand your company’s marketing needs: data driven approach
Knowing not only what metrics to look at, but how to get in-depth business insight from them is key to SaaS scaling. Now, it is time to use a data-driven approach to improve your marketing activities, backed by a comprehensive growth marketing methodology.
Measurable long-term growth requires a set of professional skills, which is difficult to do inhouse. Consider outsourcing marketing to a professional B2B SaaS marketing agency. Using the insight from the metrics outlined above, you will be able to control the performance of such agencies and ensure their best performance. At 42DM we are ready to become your long-term scalability partner, providing you with marketing insights so you can track the results of our work!
