7. The funnel
Search results, content, social
Browsing site, creating trial
On-boarded active trials
Conversion
Support/Success/CAM
Up-sell & retention
8. Marketing & product’s KPIs
Marketing’s KPIs
Visitors
Visitor-to-signup conversion rate
Product’s KPIs
Onboarding %
TTV - Time to value
App usage/Engagement
9. Inside sales
∙ Main indicator of success is the revenue metrics.
∙ They are a crucial part of the funnel and will raise the Trial-to-paid
conversion rate.
You should aim for 20%+ in the healthiest SaaS markets:
✓ USA + Canada ✓ UK ✓ Nordics ✓ ANZ
The dream:
Signup for a trial, if you like it put in your credit card details and buy
The reality:
This rarely happens over $500 MRR
You call, email, call, email
Lead > Prospect > Opportunity > Customer
10. 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
conversion rate.
e.g. what % of trials created 45 days ago
have now converted.
14. Churn-rate
What is it?
The rate at which you are losing customers or revenue through
subscription cancellations.
Calculation
Segmentation is key to getting meaningful Churn metrics.
16. Churn classification
Pro-active churn
Passive churn
Happy churn
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%
17. Most SaaS startups should aim for negative MRR churn
http://christophjanz.blogspot.de/2015/02/why-most-saas-startups-should-aim-for.html
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.
HubSpot.
Image credits to Tomasz Tunguz
20. Support KPIs
∙ Average 1st response time
∙ Average full resolution time
∙ Customer satisfaction score (CSAT)
∙ Net promotor score (NPS)
21. Where to learn more…or rather who to learn from
Jason M. Lemkin
@jasonlk
saastr.com
Christoph Janz
@chrija
theangelvc.net
David Skok
@BostonVC
forentrepreneurs.com
Tomasz Tunguz
@ttunguz
tomtunguz.com
@ ChartMogul
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…