SaaS Metrics - How to stay on top of your SaaS business performance
About the talk
SaaS businesses are different from traditional software companies.
From one hand they are much more complex to monitor and there are much more aspects of it to measure than bookings and expenses.
From the other hand SaaS culture and technology provide an opportunity for executives to measure and optimize what is really important for the company's success.
In this presentation Eldad will review the key metrics of a SaaS business and help answer the following questions:
What KPIs should I monitor? Where should I put my focus in order to improve results? Is the company business model viable? What is the impact of planned changes on results?The review an analysis is based on Eldad's experience from working at Incapsula as well as a number of publications and blogs on this topic.
About Eldad Chai
VP Products at Incapsula, responsible for the company's product strategy and execution. Prior to that, as Director of Sales, Eldad was leading all sales activities and driving the company's growth.
Before joining Incapsula, he was Product Manager at Imperva's (NYSE: IMPV) award-winning Web Application Firewall, where he led the development and launch of its innovative ThreatRadar technology.
A cloud-based Application Delivery Service that makes websites and applications safer, faster and more reliable.
Incapsula, an Imperva (NYSE: IMPV) company, offers organizations, large or small, enterprise-grade web application security, DDoS mitigation, performance optimization and load balancing via a global worldwide delivery network.
Product, startups, security
Security, performance, availability for websites as a service
How to measure a SaaS business
Theory and real life
How are SaaS different?
Track average selling price
Track lifetime value
Recurringvs. one time
Measure close rates
Measure renewalandchurn rates
The SaaS business model
Annual Recurring Revenue (ARR)
Annual Contract Value (ACV)
Or in short…
Get new customers
Keep them for as long as you can
SaaS key metrics
Monthly Recurring Revenue (MRR)Growth
Cost to Acquire Customer (CAC)Growth efficiency
Average Revenue Per Account (ARPA)Expansion
Life Time Value (LTV)Predictions
First 2-3 years
Scaling up phase
Should PMs care?
Should PMs care?
Should PMs care?
SaaS provides a platform for analysis
Almost any change you make can be quantified
It is a CRIMEnot to tap into that power
Model and optimize
Monthly Recurring Revenue (MRR)
This month’s MRR
Last month’s MRR
Net new MRR
Upgrades and cross sales
Can be measured for MRR/ARR or customers
You should probably do both 푛푢푚푏푒푟표푓푐푢푠푡표푚푒푟푠푙푒푎푣푖푛푔 푡표푡푎푙푛푢푚푏푒푟표푓푐푢푠푡표푚푒푟푠(푤ℎ표푐표푢푙푑ℎ푎푣푒푙푒푓푡)
SaaS magic number (Josh James)
QRR = Quarterly Recurring Revenue
Expenses = Total Sales and Marketing Expense for last quarter
Step on it!
Looking for investors?
Upsell and cross sale
•You need 50 new accounts to meet this quarter's targets
•How many visits to the website do you need?
•What kind of marketing activities should you execute on?
•Is the problem at sales or at marketing?
•Don’t over analyze
•At the minimum track leads/trials (MQLs) and opportunities (SQLs)
•Understand the conversion rates
•Work backwards to set targets for the teams
•Recalibrate every quarter (sliding window)