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KPIs for SaaS Startups

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Slides used for Nick Franklin's presentation "KPIs for SaaS Startups" at SaaS Camp, Startup Camp Berlin - March 13th 2015

www.chartmogul.com

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KPIs for SaaS Startups

  1. 1. KPIs for SaaS Startups Nick Franklin SaaS Camp, Startup Camp Berlin - March 13th 2015
  2. 2. about me Nick Franklin Founder & CEO at Was early MD of EMEA then Asia nick@chartmogul.com@nick_franklin
  3. 3. Why Berlin?
  4. 4. High level SaaS KPIs* (*Key Performance Indicators) 1. The funnel Visitors Visitor-to-signup Signup-to-paying 2. Sales & revenue metrics 3. Support metrics
  5. 5. The funnel Exposure Discovery Consideration Conversion Customer Relationship Retention
  6. 6. The funnel Search results, content, social Browsing site, creating trial On-boarded active trials Conversion Support/Success/CAM Up-sell & retention
  7. 7. Marketing & product’s KPIs Marketing’s KPIs Visitors Visitor-to-signup conversion rate Product’s KPIs Onboarding % TTV - Time to value App usage/Engagement
  8. 8. 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
  9. 9. 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.
  10. 10. Sales and revenue KPIs ∙ Monthly Recurring Revenue (MRR) ∙ Annual Recurring Revenue (ARR) ∙ Customers ∙ Average Revenue Per Account (ARPA, ARPU, ARPC) ∙ MRR/Customer churn rate ∙ MRR/Customer growth rate (m-o-m, q-o-q) ∙ Customer Lifetime Value (LTV) ∙ Customer acquisition cost (CAC)
  11. 11. Monthly Recurring Revenue (MRR)
  12. 12. MRR Movements New business MRR Expansion MRR Contraction MRR Churn MRR Reactivation MRR
  13. 13. 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.
  14. 14. Churn Recognition Best practice is to recognise churn at the end of the paid up billing period.
  15. 15. 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%
  16. 16. 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
  17. 17. Cohort analysis Cohort analysis is the best way to truly understand how your subscriptions evolve over their lifespan.
  18. 18. Financials Net revenue Revenue offset for refunds and discounts Cash burn How much cash you spend each month Cash balance Cash in the bank
  19. 19. Support KPIs ∙ Average 1st response time ∙ Average full resolution time ∙ Customer satisfaction score (CSAT) ∙ Net promotor score (NPS)
  20. 20. 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
  21. 21. SaaS Metrics Cheat Sheets Grab your printed copies at the front
  22. 22. Thank you Questions? nick@chartmogul.com @nick_franklin

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