Here are the easy-to-track, most important B2B SaaS metrics for marketing and sales. Start tracking from day one, even if the data is incomplete.
Table of contents
- What are B2B SaaS metrics?
- Why is tracking marketing metrics important?
- Important B2B SaaS metrics through the marketing funnel journey
- Top-of-funnel metrics
- Middle-of-funnel metrics
- Bottom-of-funnel metrics
- Tracking your B2B SaaS metrics
- Make the most of your metrics
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Are you curious about the world of B2B SaaS metrics? We know that numbers can strike fear into the hearts of many, but metrics are pretty important when it comes to measuring campaign success and becoming a better, data-driven marketer.
Don't worry if you're new to this game or don’t know where to start because we've got you covered. We'll be exploring some of the most important metrics for measuring the success of your SaaS company and seeing how they fit into your marketing funnel journey. So whether you're a seasoned business owner or a total numbers novice, join us as we dive into our guide to B2B SaaS metrics for beginners.
What are B2B SaaS metrics?
To keep it simple, when thinking about B2B SaaS marketing metrics, think of the key performance indicators (KPIs) you use to monitor, record and measure the performance and success of a campaign. Marketing metrics help you understand how well your campaigns are performing, what channels work best, how people interact with your content, how profitable your marketing campaigns are, and how they contribute to your overall business goals.
Why is tracking marketing metrics important?
First and foremost, tracking metrics helps you to understand how your marketing campaigns are performing. These magic numbers can help you to determine which marketing channels and tactics are driving the most results, which can help you optimize your marketing strategies and allocate resources more effectively. For example, suppose your customer acquisition cost is too high. In that case, you may need to adjust your marketing and sales strategies to target more qualified leads or find new channels with lower costs per acquisition.
Tracking metrics can also help departments justify budget allocations and even help entire businesses communicate their value proposition to potential investors and stakeholders. SaaS companies can demonstrate their growth potential by presenting a clear and comprehensive picture of their performance.
Important B2B SaaS metrics through the marketing funnel journey
In B2B SaaS marketing, tracking metrics is crucial for success. But which metrics should you focus on, and how do they fit into the all-important marketing funnel? Let’s explore the most important B2B SaaS metrics through the funnel journey, from attracting potential customers to converting them into paying customers and retaining them.
3 important top-of-funnel metrics
1. Website views
Sounds pretty self-explanatory, right? It is! Website views simply measures the number of visitors who land on your website. This metric is typically measured using website analytics tools such as Google Analytics.
Website views are an essential metric because they indicate how many potential customers are engaging with your website. They are particularly crucial in the awareness stage of the marketing funnel journey, where you are aiming to attract potential customers and make them aware of your SaaS product.
However, it's important to note that website views alone don't necessarily indicate the success of your marketing efforts. It's also important to consider the traffic quality and the visitors' behavior. For example, if your SaaS company is driving a lot of traffic to its website, but the visitors aren't staying for long or engaging with the content, this could indicate that the traffic isn't very high quality and may not lead to conversions. This is why we also need to look at other metrics.
2. Click-through rate
Click-through rate is a standard marketing metric that measures the ratio of clicks to impressions of a particular link. You should always track CTR to determine how effective your digital marketing efforts are at generating traffic to your website.
You can use click-through rates to measure the effectiveness of a wide range of marketing channels. By analyzing your click-through rate across different campaigns and channels, you can start to understand which channels and campaigns are performing well and which ones need improvement. If the click-through rate of a particular ad or landing page is particularly low, for example, it’s a good indicator that its messaging isn’t resonating with your audience.
3. Average time on site
This is the average length of time visitors spend on a website. This metric can provide valuable insights into how engaged visitors are with your website and whether it meets their needs. That means the longer the average time on site, the more likely visitors will find the content valuable and engaging and eventually convert.
However, it's important to note that a longer average time on site doesn't necessarily indicate the success of your marketing efforts. It's also important to consider the specific actions visitors take on your website, such as clicking on a call-to-action or filling out a form, to determine whether your website effectively drives conversions. A site that can attract and retain visitors is not truly successful if it cannot move those visitors further down the funnel.
3 important middle-of-funnel metrics
1. Marketing qualified leads (MQLs)
MQLs measure the number of leads who have demonstrated interest in your SaaS product or service, generally fit your ideal customer profile (ICP), and are deemed more likely to become customers than other leads. MQLs are typically found in the consideration stage of the marketing funnel journey, where you aim to identify and nurture potential customers.
So how do you determine whether a lead is qualified? Firstly, you use a set of criteria, such as the lead's job title, company size, level of engagement with your content or website, and a combination of qualifying questions about features needed, budget, etc. Then once a lead meets these criteria, they are passed on to the sales team for further nurturing and potential conversion.
Tracking MQLs provides insights into the effectiveness of marketing efforts in identifying and nurturing potential customers. By tracking metrics like this, you can understand how effective your lead-generation strategies are and identify areas for improvement.
2. Sales-qualified leads (SQLs)
SQLs measure the number of leads who have been identified as potential customers by the sales team and are deemed more likely to convert into paying customers. The criteria for determining an SQL will consider the lead's level of interest, budget, or authority to make purchasing decisions. Once a lead meets these criteria, the conversation continues into the deal stages.
As well as finding potential new customers, this metric can help you evaluate how effective your sales strategies are and find areas for improvement.
3. Sales accepted leads (SALs)
SALs measure the number of leads the sales team has accepted as potential customers and with whom the sales team is actively working. To determine whether a lead is a SAL, you will normally use another set of criteria, such as the lead's fit with your ICP, level of engagement, and readiness to buy. If your lead ticks all the boxes, they are accepted by the sales team and are actively worked on to become paying customers.
3 important bottom-of-funnel metrics
1. Customer acquisition cost (CAC)
CAC measures the cost a business incurs to acquire each new customer. This metric is calculated by dividing the total cost of sales and marketing by the number of new customers acquired in a specific time period.
By tracking this metric, you can understand how much it costs to acquire a new customer and identify areas where you can optimize sales and marketing strategies to reduce your CAC.
It is important to note that a low CAC doesn't necessarily indicate success. You should always consider other metrics, such as customer lifetime value (we will come to this next), to ensure that the cost of acquiring and retaining customers is sustainable.
2. Customer lifetime value (CLV)
CLV is the total amount of revenue a business can expect to generate from a single customer over the course of their lifetime. This metric takes into account the payment a customer generates through repeat purchases as well as any potential upsell or cross-sell opportunities.
CLV can tell you a lot about the overall profitability of your customer base. If you want to increase your CLV, consider strategies such as improving customer retention or introducing new products or services.
3. Return on investment (ROI)
ROI simply measures the financial return you receive from a particular investment. ROI is calculated by dividing the net profit generated by an investment by the cost of the investment. It’s important because it can help you understand the financial return you receive from your investments and identify areas where you can increase ROI through optimized strategies.
Though it is perhaps the most important metric to reference when considering your funnel, you shouldn’t look to ROI alone to measure your success. You still need to pay attention to metrics such as CAC and CLV to ensure that the cost of acquiring and retaining customers is profitable in the long run.
How to track your top B2B SaaS metrics
Accurately and consistently tracking your metrics is crucial when it comes to measuring the effectiveness of your marketing campaigns and optimizing your strategies. Let’s take a look at how you do that:
- Define goals: before tracking any metrics, you need to define your business goals. This includes identifying what you want to achieve and which metrics you need to track to measure progress.
- Choose relevant metrics: once you have defined your business goals, you need to choose the relevant metrics you will track. Select metrics that align with your goals and provide actionable insights.
- Use analytics tools: there are a variety of analytics tools available that you can use to track metrics. Some popular tools include Google Analytics, HubSpot, and Marketo.
- Set up tracking: once you have chosen your analytics tool, you need to set up tracking to start collecting data. This includes installing tracking codes on their website, setting up conversion tracking, and more.
- Monitor and analyze data: once you have started collecting data, you need to monitor and analyze it regularly to gain insights into performance. Keep an eye on data trends, identifying areas for improvement, etc.
- Report results: next, you need to report your marketing results to key stakeholders, such as executives and marketing teams. Share data insights, progress toward goals, and recommendations.
- Update and optimize: it’s important to do something with the data you collected in step 5. You should update and optimize your campaigns to improve their effectiveness. For example, if your click-through rates are low, you might want to update your headlines and copy or include additional calls to action (CTA).
Make the most of your metrics
It is important to note that there is no one-size-fits-all approach to tracking metrics. Every B2B SaaS company is unique, and the metrics that matter most for them will depend on factors such as the stage of growth, target market, and business model. Therefore, you must identify the metrics that matter most for your specific goals and objectives and track them consistently over time.
When it comes to B2B SaaS metrics for beginners, keep an eye on the big picture. Metrics such as CAC, CLV, and ROI are interdependent, and optimizing one metric at the expense of another can lead to suboptimal results. By taking a holistic approach to metrics and regularly evaluating their performance, you can effectively drive growth and increase the likelihood of your success.
If you found this article interesting and want to learn more about B2B SaaS metrics and the world of data, you should check out this post on the top 10 B2B SaaS metrics for software companies.