Did you know that the SaaS business will top “$370 billion by 2024?” With more companies incorporating SaaS solutions, your market is there. But what about your SaaS website?
It takes more than dynamite SaaS website design for business success. SaaS websites need a host of metrics to work in their favor.
So, before deciding on a SaaS website template, read this article. You’ll master all the essential metrics for successful SaaS websites. After all, happy customers equal returning customers.
But you have to know how many people you’re reaching—or if you’re reaching customers at all. Grab some coffee and read which metrics are vital to your SaaS website.
What Is a Saas Website?
SaaS stands for “software as a service.” The purpose of SaaS websites is to add revenue streams to the purchasing of their software. So when a customer buys software, they buy it once.
With SaaS website services, they continuously pay for that service. Common SaaS website services include:
- Cloud-based services
- App subscriptions
- Computer security services
Using a SaaS website builder should incorporate website SaaS services. You must understand the proper metrics regardless of your SaaS website business model.
Website SaaS Metrics
Metrics for SaaS websites provide information on the growth or lack of for SaaS services. And like key performance indicators, SaaS metrics help companies make critical business decisions.
SaaS websites that don’t consider metrics might soon find themselves out of business. But if you want your SaaS website design to make a profit, consider these vital metrics:
- The number of active customers
- Annual Recurring Revenue
- The Customer Churn Rate
- The Revenue Churn
- Customer Lifetime Value
- Contraction MRR rate
- Customer Acquisition Cost
- Expansion MRR
Another Sass metric to consider is the customer engagement score. With this, companies can monitor how often customers spend on their websites. You can also engage in which applications they are using.
1. The Number of Active Customers
This straightforward metric calculates the number of customers paying for your SaaS website’s services. The number of active customers is how SaaS websites make money.
This metric does not calculate in any free plans or service trials. The number of active customers also doesn’t consider late payments. SaaS websites usually offer monthly subscriptions like cloud-hosting.
2. Annual Recurring Revenue
The annual recurring revenue (ARR) metric is also known as the annual run rate. This essential metric tabulates all your monthly recurring revenue stats per year.
The caveat for using the ARR metric is that your company isn’t expecting new customers or other business additions. SaaS website builders rely on the ARR rate to strategize a company’s growth projection.
3. The Customer Churn Rate
The customer churn metric tabulates the percentage of lost customers from your SaaS website. The usual period to calculate the customer churn rate is a month. However, it also applies to daily customers lost, bi-monthly, or by a quarter.
It might prove helpful for SaaS websites to have a form explaining why their customers are canceling services. Then, you can relay this vital SaaS information to your team to prevent further losses.
4. The Revenue Churn
The revenue churn works alongside the customer churn metric. It calculates how much revenue your SaaS website has lost over time. Revenue churn only factors customers who have entirely terminated their accounts.
Both the revenue and customer churn heavily rely on SaaS subscriptions. Subscriptions bring steady income for SaaS websites. High customer churn rates overshadow new customer additions.
SaaS websites that don’t curtail the churn rate might soon be out of business.
5. Customer Lifetime Value
The customer lifetime value (CLV) represents the financial worth of your SaaS website’s customers. The CLV metric monitors the monetary value your customer has for the duration of using your SaaS services.
Keeping your esteemed customers engaged limits the revenue and customer churn rates. Timely promotions and exclusive offers incentive your customers to keep paying your Saas Website.
The caliber of your SaaS website design makes the first impression on prospective customers. Building effective SaaS websites with SEO for you is our pleasure.
6. Contraction MRR Rate
Contraction MRR tabulates the monthly revenue lost rate from active customers. Some customers might opt to reduce the amount of paid services for your SaaS website. Or, they might choose cheaper subscription plans.
The contraction MRR also factors in late or missing payments. However, it doesn’t factor in the number of lost customers.
This critical metric can warn of looming problems for your SaaS website.
7. Customer Acquisition Cost
The customer acquisition cost, or CAC for short, monitors how much SaaS websites spend to add new customers. The formula divides how much you spend on customer acquisitions by the number of members added.
CAC is a quick way to gauge SaaS websites’ profit status. SaaS websites shouldn’t spend more on customer acquisition than customer revenue. The real profit is when customer revenue exceeds the CAC metric.
Increasing subscription plans is a quick way to try to lower your customer acquisition costs. Or you can rely on our expert SEO services to grow traffic organically.
8. Expansion MRR
It’s an achievement to maintain paying customers. But getting these same members to spend more is a more remarkable accomplishment. That’s where the expansion MRR enters the equation.
A common expansion MRR marker is upgrading subscriptions. An additional barometer is if your customers are buying other SaaS services. The immediate benefit is saving costs for adding new customers.
More About SaaS Websites
SaaS website builders should also use the daily active user metric. You can quickly gauge how many members are engaging with your SaaS products.
Our blog awaits SaaS website builders. There, you can find informative articles about SaaS website design and more. In addition, you can also incorporate professional WordPress blogging tips.
We love to hear about your SaaS website ideas. So, don’t hesitate to contact us about developing your profitable SaaS website.