A Guide to Understanding the SaaS Marketing Metrics

Written by: Elena Daskalova
Aug / 14 / 2023

When working on a SaaS marketing strategy, you need to know how to measure the success, but also what indicators show the progress. That means there are two essential things to consider – metrics and KPIs. And today, we’ll talk more about the SaaS marketing metrics, explaining their meaning and importance. 

We’ll cover everything, from basic to advanced metrics, and how they affect your SaaS marketing strategy. 

But first, let’s explain the difference between KPIs and metrics. Key performance indicators or KPIs help you define your marketing strategy, showing you how well it goes when accomplishing your business goals. Metrics, on the other hand, are used to track the status of your processes, including marketing performance. 

As you suppose, KPIs are essential for your growth and business focus, and metrics are just for measuring how it goes without being essential to achieve. Or, as experienced marketers say, every KPI can be a metric, but not every metric is a KPI. That’s why there are often some overlaps, without a clear distinction if some element is KPI or metric.

And even if it seems confusing, after this article, and the one related to KPIs, you’ll understand better what B2B SaaS marketing metrics are and why you need to include them in your strategy. 

How to Define Metrics in SaaS Marketing?

Metrics are quantifiable measurements to track various aspects of marketing activities and their influence over the business performance. To define them, you need to select the ones that align with your marketing goals, like website traffic, customer acquisition cost, churn rates, conversion rates, etc. For SaaS, since every product is unique, you need to spot the most relevant ones and set them properly.

The chosen marketing measurements give us a nice image of how the SaaS business performs or help us track important metrics to understand our marketing efforts. So, here are a few metrics we can track at this point:

Website Traffic

The number of visitors to your SaaS website through a given period. The website traffic includes metrics like page views, unique visitors, session duration, etc. For business performance, it doesn’t mean a lot because you may have thousands of daily page visits without any conversion. Still, it shows that your website drives traffic due to quality content and even a well-executed SEO strategy. 

Conversion Metrics

Conversion metrics measure how many actions were taken that led to someone becoming a SaaS client or customer. For example, we can say that all the sign-ups for demos or trials, or even purchases are conversion metrics. They are different from the ordinary website traffic metrics because they give us an insight into how many people really interact and convert. 

User Engagement Metrics

Obviously, there is a strong connection between every metric related to SaaS, and it’s the same about user engagement ones. Some part of the traffic will convert to clients, while others will use your website as an information resource. The engagement metrics will tell us how many people left your site without any action, but also how much time they spend on pages or if they click on some dynamic element.

Customer Acquisition Metrics

At this point, we can measure metrics like cost per lead, cost per acquisition, customer lifetime value, time to conversion rate, etc. These metrics are important to calculate the customer acquisition post and its impact on your business. 

Churn Metrics

There are two essential churn metrics: churn rate and customer retention rate. The first one measures the percentage of people who canceled the subscription to your SaaS product over a given period. On the other hand, the customer retention rate measures the percentage of people who remain loyal within the same timeframe. This way, you can estimate customer satisfaction and loyalty, helping you maintain a healthy relationship and long-term growth.

Advanced SaaS Marketing Metrics

As we mentioned a few basic metrics that apply to almost every SaaS product or solution, now we have something bigger. The upcoming metrics may apply to many SaaS products, too, while giving an important insight into how the product is used and how the customers behave while using it. Here are a few of them:

User Activation Rate

This metric is crucial during the customer onboarding process. It measures the percentage of new users who successfully completed a specific action as part of getting used to the active product usage. It’s an essential part of the positive customer journey, but the SaaS product owners can also see how easy the product is to use. As a result, they can order a simpler user interaction, providing a clear and intuitive journey. 

If the user activation rate is low, that means the product is not that easy to use. So, the next step is simplifying the process or extending the onboarding period – depending on the product features and capacities.

Upsell and Cross-Sell Metrics

Upsell and cross-sell metrics are about increasing revenue through existing customers. Upselling is when existing customers upgrade the pricing plan they currently use to a higher-tier plan. Cross-selling involves offering additional services that aren’t included in the initial plan to accomplish better customer satisfaction.

This way, you measure the customer interest to use more of your product. So, it’s your chance to offer the maximum value and improved engagement while delivering more efficient or tailored solutions to their demands. 

Feature Adoption Rate

This one measures how effectively the end-users engage with specific features. As a result, you can see what features are indeed useful for your customers and how effective they are for your SaaS product. Also, if they don’t use some tool or feature, you can use that knowledge to improve future services and incorporate better functionalities. 

When tracking the adoption metrics, you can easily optimize the overall user experience by including or excluding some features. 

Referral Metrics

This simple metric measures the impact of satisfied customers who recommend your product to other potential users. At this point, you can measure the referrals-to-customers conversions to see how many new customers will come after a current one recommends your product or service. 

This may not be the most important SaaS metric, but it surely gives you a nice idea of which users are your best brand advocates and if their recommendations are listened to.

Additional SaaS Metrics You Need to Consider

There are even more niche-related SaaS marketing metrics you need to consider when setting up goals and values. Here are some of them:

Activations and Sign-Ups

Activations are about the first time a customer uses your SaaS product so they can spot the value properly. This way, they can get to know your product better, and you get an insight into who is really getting value from your product. 

Sign-ups, on the other hand, show only interest in your service without getting the value. So, activations are stronger than sign-ups, but they’re both relevant to your SaaS progress. 

Net Promoter Score

NPS is an answer to a simple question: How likely are you to recommend our product to others in need on a scale of 0 to 10? 

Those who give you 0-6 points can damage your brand reputation, while 7-8 are passive or indifferent to your brand or product. Surely, the 9-10 are promoters, and they’re more likely to recommend your product to others. 

Even though it’s not the most useful SaaS marketing metric, the NPS can help you spot the unsatisfied customers who are likely to detract soon, so you can pay some additional attention if needed. 

Annual Contract Value

Annual contract value applies to subscription-based SaaS business models that run multiple pricing plans. It allows you to understand the contract’s yearly value since you can calculate it this way:

ACV = (Total contract amount / Total contracted months) * 12

How to Measure and Calculate Marketing SaaS Metrics?

Before delving into this part of the article, we once again want to remind you that some metrics and KPIs will be the same. Still, they refer to different aspects since metrics are all about quantitative representation, while KPIs are tightly related to business goals. 

Measuring the performance is possible with appropriate tools, but sometimes you need to use the data to get the estimation right. 

So, we’ll start explaining how to measure and calculate marketing SaaS metrics and what you need to do. Here’s the process:

1. Identify The Relevant Metrics

Determine which marketing metrics align with your SaaS business goals. We mentioned a few of them, but not each will be relevant for the particular product. Choose the ones that reflect the customer journey and satisfaction, so you can see if your strategy really works. 

2. Data Collection

Use data from various sources like Google Analytics, Google Search Console, CRM platforms, email marketing tools, SEO tools, or even social media platforms. This way, you can spot several patterns or critical points. Based on the data, you can make informed decisions with high accuracy. 

3. Set Goals and Baseline Values

Set baselines and goals based on historical data, and then compare the measurables that align with your business objectives. How to do that?

Let’s say you plan on increasing the organic traffic by 30% in the next three months. Decide what values are relevant to this goal and measure them accordingly. Or maybe you want to decrease the bounce rate by 2% in the following month. Start with the average bounce rate for the last quarter and set it as a baseline value, so you can know what you measure. 

4. Learn how to Calculate the Metrics

While some analytics tools directly calculate some of the measurables, you need to do some of the things yourself (or set a formula in a spreadsheet you’ll fill up with relevant data). 

What does it mean?

Here are a few examples:

Churn Rate: Divide the number of customers lost during the given period by the total customer’s number at the beginning of that period. Multiple by 100 for a percentage. Like, if you had a total number of 120 customers at the beginning of the quarter, and now you have 92 – you lost 8 of them. The churn rate would be (8/120)*100 or about 6.67%. 

Conversion Rate: Divide the number of conversions (sign-ups, purchases, trials) by the total number of visitors in a given period, and then multiply by 100. For example, if you had 1,000 visitors and 250 conversions, you need to do this: (250/1,000)*100. 

Retention Rate: Simply subtract the churn rate from 100% to determine the retention rate. 

Customer Acquisition Cost: You need to divide the total costs of acquiring customers by the number of new customers. By total costs, we mean everything you spend on marketing and sales to obtain those customers.

Upsell/Cross-Sell Revenue: Simply measure the revenue generated from existing customers who upgraded the SaaS product or purchased some additional features to it. 

5. Data Analysis

Review and analyze the data that comes from your SaaS marketing analytics tools. That way, you can identify trends, patterns, and even anomalies in the process. Compare the data to the goals and values you set previously and check on how the whole thing goes. That way, you can inform the responsible department of the changes and needed improvements. 

6. Optimize Your Strategy

As you gather data and set goals, you can also optimize the overall strategy. For example, if you don’t gain enough organic traffic, even though your rank is high on Google, you need to consider optimizing your content for relevant long-tail keywords. Surely, SaaS marketing SEO is part of the strategy, so you’ll still have to optimize if it doesn’t work as expected. 

Optimizing the strategy applies to every aspect, not just SEO. So, if something doesn’t perform as expected, then change something, re-invent the approach, and measure again.

7. Report, Monitor, Iterate, and Improve

Use reporting tools to visualize the data and progress. Keep in mind that metrics evolve over time, as well as their relevance to your SaaS product. What you measured at the beginning after you launched the product may not apply to what you measure now, as you already have customers. Monitor the progress and align the changes with the market demands and customer behaviors. 

Surely, you’ll have to improve the whole marketing approach to set and measure new B2B SaaS metrics and set new goals. All these improvements lead your company with its products toward success.  

How to Measure SaaS Content Marketing Performance?

Measuring SaaS content marketing performance is an important step since this part attracts website visitors who need information and education, or even better, a solution to their specific issues and pain points. 

You can start by defining specific goals, like increasing brand awareness, driving leads, boosting customer engagement, educating users about SaaS products you offer, or simply website traffic and time spent on content pages. 

At this point, you need to choose relevant metrics too. 

For example, website traffic shows the total number of website visits, page views, unique visitors, first-time visitors, or time spent on the content pages. But even more important are conversion rates driven by content, like signing up for webinars, downloading a trial, or the click-through rate on content-related CTAs. 

As content often generates leads, you can measure the number of leads who came from content. Additionally, you need to track the keyword ranking for targeted SaaS-related terms and eventually find more queries people use to come to your content. Organic traffic is also important to show you do your SEO efforts right. 

Also, you need to know how the users engage with your content, i.e., if they comment, like, share, or spend time and scroll into the depth of the page. 

You can include email marketing, too, to spot open rates and click-through rates on the featured content in the email. Some additional metrics may come, like the number of inbound links, referrals, time-to-conversion from content, audience growth, community support, and content sharing rate. 

And while we mentioned some of the related metrics, you still can find additional ones, as every SaaS product is unique with different features and solutions.

Final Words on B2B SaaS Marketing Metrics

B2B SaaS metrics can be the light that guides you through the highly-competitive market. You need to choose the right metrics to measure and track while trying not to overwhelm yourself and the marketing team with so many things to measure. As time goes by, you’ll leave out the irrelevant metrics and incorporate new ones for better strategy optimization and SaaS growth. 

Every metric, no matter if it’s organic traffic count, conversion total number, or churn rate, holds a story about how the audience resonates with your SaaS product. So, embrace the most important metrics, but stay adaptable for even more emerging trends and new things to measure. 

That way, you deepen your customer understanding, which helps you improve the marketing strategy, bringing a prosperous future for your B2B SaaS company.

About the Author

Picture of Elena Daskalova

Elena Daskalova

Experienced content writer with a focus on SaaS content marketing and copywriting. With a passion for crafting compelling stories, paired with expertise, delivers narratives that drive customer engagement and growth.