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What makes a good SaaS B2B marketing KPI? Find out the answer to this and much more in our know-all blog on measuring SaaS marketing metrics.
In the 2020s, it's easier than ever to track everything. As I write this, I'm looking at my WHOOP device which connects to my iPhone, which has dozens of apps that my cell phone is tracking. The developers of those apps are tracking my usage, and so on.
The point is, we can measure more than ever, but that makes the definition of what to measure important. In today's blog, I'm going to run through the basics of measuring your SaaS marketing using KPIs.
When it's all said and done, you'll know what SaaS marketing KPIs are, how they link to your customers, how to interpret them, and an Excel template to track them!
What Is A KPI In Marketing?
A KPI (or Key Performance Indicator) monitors a number that's key to your success.
The KPI gives insights into how you're progressing on several fronts, from acquiring new customers through to retaining them, and the revenue you're generating.
For marketing, KPIs should link into the key measures that have been set in your business' strategy. By aligning marketing KPIs with business goals, you ensure that your actions drive success for all.
When marketing is seen as a cost centre, it's because the KPIs for marketing are not well defined. Poorly defined KPIs make for vanity metrics like followers and likes over new free users and monthly recurring revenue (MRR).
They are the breeding ground for discontent with marketing.
How Are SaaS Marketing KPIs Different?
SaaS marketing KPIs are built around:
- The SaaS industry,
- Your go to market motion, and
- Your marketing strategy.
The SaaS industry
SaaS marketing metrics are particular to the software industry.
SaaS marketing KPIs focus on recurring revenue, retention, and long-term engagement, while non-SaaS marketing KPIs prioritize immediate sales and transactional metrics.
Instead of one-time income from projects, SaaS marketing metrics link to MRR.
Non-SaaS marketing KPIs will look at purchase rates, whereas SaaS marketers are focused on customer lifetime value (CLV,) and churn rate.
Lastly, SaaS marketers look at trial sign up and customer activation metrics, whereas non-SaaS marketers will measure meetings or deal amounts.
Go to market motion
Your go to market motion is decided by your market strategy and your positioning. It is whether you are going for a product-led growth approach or sales-led growth approach (or a hybrid.)
This matters, because if you are more sales-led, your marketing KPIs will look towards demos or discoveries booked.
Product-led measures would look towards free trial to paid user rate and negative net retention rates (where your revenue expansion exceeds your churn revenue loss.)
Marketing strategy
Your marketing strategy dictates what you're hoping to achieve, how you'll get there, and, crucially, how you'll measure it.
Your marketing KPIs for an inbound strategy will focus on content production, organic traffic, shares, and search engine positioning.
If you go apply an Account Based Marketing motion, you look at account reach, penetration, and marketing qualified leads from within your target accounts.
The strategy matters.
How To Map KPIs To Customers
With your marketing strategy set, you can turn towards mapping KPIs to customers.
Why? Because we're here to serve customers. If we look at the customer as our start and ending point, we can measure how effectively we help them along their journey.
When I set up KPIs for a SaaS company using an inbound strategy that supports a sales-led growth motion, I'll identify the crucial measures along the buying journey.
That looks like the below:
By integrating the customer journey with your KPIs, your marketing shows its impact on acquisition through to delight.
How To Find SaaS KPI Benchmarks
With your KPIs set, you're going to want to create benchmarks.
SaaS marketing KPIs can be benchmarked in two ways (ideally at the same time:)
- Internal data
- External data
Internal data
Internal data is your best friend.
Data on your KPIs should be tracked on a daily, weekly, and monthly basis. Through collating your data in a marketing scorecard, you'll have an easy to reference data set that can be used to create weekly, monthly, quarterly, and annual comparisons.
You'll want that data for key events, such as migrating a website, or to spot seasonal trends in your marketing performance.
But, it's worth noting that your data may be non-existent or missing data points. It's time to go external.
External data
External data can provide you with comparisons to help your measurements.
There are two things to consider here.
Firstly, it matters where you get the information from.
Reputable data sources are the gold standard. That's people like:
- Gartner, with their high-quality research papers
- G2 and Capterra, with their buyer data
- Semrush, with their search engine competitor insights
- Search Engine Land and Search Engine Journal
- Vendors like hunter.io, i-nexus, HubSpot, Canva, and Demandbase
To some extent, you can also rely on tools like Perplexity, as these give sources for their AI generated responses.
Secondly, context is king.
You need to apply the right filters to give context to your benchmarking data. It's no use having a benchmark for your PPC if it's irrelevant to you. Pay attention to:
- B2B v B2C v B2G
- Industry
- Go to market motion
- Location
The Role of Technology
One quick note on technology.
While there are standard technologies such as Google Analytics out there to use, don't rush into buying a tech stack before you've defined your KPIs. Even then, try and measure manually to get a better understanding of what you're tracking.
Likewise, take to the internet for basic steps you need to take to track your performance online. That means getting set up with Google Search Console, Google Universal Analytics 4, and Google Tag Manager, to name a few. On top of that, look to get a Google Tag Manager Tag set up on all of your social profiles.
Interpreting KPIs
Lastly, let's reflect on how to interpret KPIs.
Data isn't a good thing in and of itself.
Tunnel vision is a real thing.
You may look at your traffic and feel that big number means a big thumbs up. It doesn't.
You need to learn how to look deeper at each KPI. In that instance, ask how much of the traffic is turning into contacts in your database. How many of those make it to a demo?
Likewise, don't become impatient.
When you define your KPIs, define how often you'll measure this number and who you'll share that information with.
Too often, leaders panic when metrics that need weeks or months to show performance trends are seen as red.
Don't be that person.
Get Your Free Excel Marketing Scorecard
The world of KPIs start and end with your customers.
From the moment you've set your market strategy, customers are key to knowing what to measure in your marketing funnel.
Getting straight on that is crucial before you look towards benchmarks and technology.
This blog will have given you the starting point, but what's next?
You can keep going with an Excel scorecard like the one I've made. Using that you can define your KPIs, using a red, yellow, green color system to focus on what matters.
Just click below to grab your free copy of the Excel template!
