Analytics can help you look at your organization from almost every angle you can imagine, but not every angle is worth seeing. For many businesses, the question isn’t what they can analyze, it’s what they should analyze. Modern organizations need the ability to make split-second decisions, and that’s not possible when one has to parse through endless charts and tables. Without a little guidance, it’s easy to find yourself wasting time analyzing data that doesn’t really matter. This form of analysis paralysis can be especially hard on smaller organizations who may not have the time or resources to sort through data or hire a full-time data analyst. Fortunately, the solution is simple: focus on the metrics that matter. Many employees don’t need more than a few metrics to help them do their job and stay abreast of the company at large. Anything more becomes a job in and of itself. For a Software-as-a-Service company, it mostly comes down to eight metrics.
ARR by Month per Product Line
This metric shows how each of your product lines contributes to your overall ARR (Annual Recurring Revenue). It’s great for comparing the long-term success of different products, along with the general health of your SaaS organization.
SaaS organizations are in a unique position to experiment with product lines. Many businesses need to worry about factories, warehouses, and supply chains, but SaaS companies can create a new product simply by packaging existing features in a different way. The one drawback is that the results of this experimentation often play out over months, if not years. Measuring ARR by Month per Product Line makes it clear which products are working, and which ones you might want to retire.
MRR by Product Line
This metric offers a closer look at the performance of your product lines. It’s helpful for tracking month-to-month performance. It can also help you measure the results of specific marketing campaigns or sales pushes. It’s great for figuring out when a product is hot, and when it needs some help.
Customer MRR Over Time by Start Date
This metric shows you how specific customers contribute to your monthly recurring revenue. It’s easy to think of revenue as one big pool, but many SaaS organizations survive based on a few key clients who make up the lion’s share of their revenue. By paying closer attention to them, you can help manage your relationships and identify opportunities.
Customer MRR Cohort Analysis
This metric shows you how specific segments of customers behave over the course of their subscription. By analyzing customer data based on the age of their subscription, you can identify trends in how people interact with your products. For example, you might notice customers tend to upgrade at around ten months or leave after two years. With this information, you can be proactive about upselling and preventing churn.
Rolling Annualized Churn Rate
This metric shows you how your churn rate progresses over time. The problem with churn is that you’re never quite sure how much of it is normal. SaaS offerings and sales strategies vary wildly, so it can be hard to know what’s coming. That said, by comparing churn rates to the same period last year, or the year before, you’ll have a much better sense of what to expect.
This metric allows you to visualize almost all of your MRR data in a single glance. MRR may be the most important metric to a SaaS organization, but there’s more than one kind of MRR. New MRR, upsell MRR, downsell MRR, and churned MRR all come with their own nuances. By viewing them all in one place, you can cut through the haze and see how different MRR sources stack up.
Rolling 3 Month Acquisition Cost Over New ARR
This metric shows how your marketing and sales spending translates into ARR. Gaining new customers can be expensive, but sometimes it’s worth it. At the same time, it’s easy to find yourself using pricey bait to catch small fish. Discover which acquisition strategies are working, and which ones to leave behind.
Expansion MRR by Month
This metric shows you how a specific customer’s MRR contribution changes over time. Depending on your subscription model, this can be a crucial metric for tracking how customers tend to expand their subscriptions. See how different companies grow, or shrink, their subscriptions and adjust your offerings accordingly.
Metrics like recurring revenue, churn rate, and customer acquisition costs are important to any SaaS organization, but the way you measure them and visualize them matters. iCharts SaaS IQ puts all of these metrics on one convenient, easy-to-read dashboard, so you get great insights without the hassle of setting everything up. Best of all, the charts in SaaS IQ are based on industry best practices, years of experience, and input from the data experts at NetSuite.
To learn more about SaaS IQ, or how to find metrics that matter to your business, head to our resources page.