kpis for saas startups
TRANSCRIPT
KPIs for SaaS Startups
Nick Franklin
SaaS Camp, Startup Camp Berlin - March 13th 2015
about me
Nick Franklin
Founder & CEO at
Was early
MD of EMEA then Asia
[email protected]@nick_franklin
Why Berlin?
High level SaaS KPIs* (*Key Performance Indicators)
1. The funnel
Visitors
Visitor-to-signup
Signup-to-paying
2. Sales & revenue metrics
3. Support metrics
The funnel
Exposure
Discovery
Consideration
Conversion
Customer Relationship
Retention
The funnel
Search results, content, social
Browsing site, creating trial
On-boarded active trials
Conversion
Support/Success/CAM
Up-sell & retention
Marketing & product’s KPIs
Marketing’s KPIs
Visitors
Visitor-to-signup conversion rate
Product’s KPIs
Onboarding %
TTV - Time to value
App usage/Engagement
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
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.
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)
Monthly Recurring Revenue (MRR)
MRR Movements
New business MRR
Expansion MRR
Contraction MRR
Churn MRR
Reactivation MRR
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.
Churn Recognition
Best practice is to recognise churn at the end of the paid up billing
period.
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%
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
Cohort analysis
Cohort analysis is the best way to truly understand how your
subscriptions evolve over their lifespan.
Financials
Net revenue
Revenue offset for refunds and discounts
Cash burn
How much cash you spend each month
Cash balance
Cash in the bank
Support KPIs
∙ Average 1st response time
∙ Average full resolution time
∙ Customer satisfaction score (CSAT)
∙ Net promotor score (NPS)
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
SaaS Metrics Cheat Sheets
Grab your printed copies at the front
