The 12 Most Valuable B2B SaaS Marketing Metrics

The most valuable marketing metrics for any B2B organization are the ones that help you measure the effectiveness of your marketing efforts and make data-driven decisions to improve your results. But for Software-as-a-Service (SaaS) companies, the most valuable metrics to track aren’t the same as those at companies whose sales model is based on moving physical units or securing one-time purchases. 

Let’s take a look at why SaaS companies need to track metrics differently – and why they may need to track different metrics altogether. 

Why SaaS Marketing Metrics Are Unique

SaaS B2B marketing has several unique characteristics that distinguish it from other B2B marketing strategies. These characteristics reflect the distinct nature of the SaaS business model and the larger B2B sales process.

The B2B sales process is typically longer and more complex than the B2C sales process. For SaaS companies, that means product marketing plays a crucial role, as it helps to educate potential customers about the value of the product and drive adoption. Because of this, free trials are a mainstay of the SaaS marketing toolkit, and metrics that follow the adoption and conversion of free trials are vital. 

Once a customer has converted, SaaS businesses are primarily focused on generating recurring revenue from their customers. For a SaaS B2B marketing metric to be valuable, it must measure the long-term value of customers, rather than simply the total amount of a particular deal. After all, a million-dollar deal for a SaaS company has a much different impact on cash flow than it does for a company that sells durable goods. 

Last, SaaS businesses rely on retaining existing customers to generate a sustainable revenue stream. This means that SaaS B2B marketing metrics must monitor customer churn and identify factors that contribute to that churn. Having these insights helps ensure a stable base of customers to keep the company’s financials secure. 

12 Most Valuable B2B SaaS Marketing Metrics 

The unique nature of the SaaS sales model means these companies should track an optimized set of metrics. These metrics can be categorized into three main groups: acquisition, revenue, and retention: 

Acquisition metrics

Website traffic is the number of visitors to your website. It is a key metric for measuring the effectiveness of your online marketing efforts. A high volume of website traffic indicates that your website is attracting a lot of potential customers.

Lead generation is the process of identifying and generating interest in potential customers. Leads are typically generated through website forms, lead gen ads, email signups, or other online marketing campaigns. Leads are generally split into Marketing Qualified Leads (MQL) and Sales Qualified Leads (SQL). A high volume of either type of leads indicates that your marketing efforts are effective at attracting customers who are more likely to buy. 

Customer acquisition cost (CAC) is the average cost of acquiring a new customer. It is calculated by dividing the total marketing spend by the number of new customers acquired. A low CAC indicates that you are acquiring new customers efficiently.

Lead-to-customer conversion rate is the percentage of leads that convert into paying customers. It is calculated by dividing the number of new customers by the number of leads generated. A high conversion rate indicates that your sales team is effective at closing deals.

Lead velocity rate (LVR) is the speed at which leads move through your sales funnel. It is calculated by dividing the number of leads generated by the average number of days it takes to close them. A high LVR indicates that your sales process is efficient and you are quickly turning leads into customers.

Activation rate is the percentage of free trial users who convert into paying customers. It is calculated by dividing the number of paying customers by the number of free trials started. A high activation rate indicates that your product is providing value to users and they are willing to pay for it.

Revenue metrics

Monthly recurring revenue (MRR) is the total recurring revenue you generate from your subscription-based business each month. It is a key metric for measuring the growth of your business. A high MRR indicates that you are generating a lot of recurring revenue from your customers. 

Annual recurring revenue (ARR) is the total recurring revenue you expect to generate from your subscription-based business each year. It is calculated by multiplying MRR by 12. A high ARR indicates that you are generating a lot of predictable revenue from your customers.

Average revenue per user (ARPU) is the average monthly revenue you generate from each paying customer. It is calculated by dividing total MRR by the number of paying customers. A high ARPU indicates that you are generating a lot of revenue from each customer.

Retention metrics

Customer churn rate is the percentage of customers who cancel their subscriptions each month. It is a key metric for measuring the health of your business. A low churn rate indicates that you are retaining your customers and they are satisfied with your product.

Net promoter score (NPS) is a customer loyalty metric that measures how likely customers are to recommend your product to others. It is calculated by asking customers how likely they are to recommend your product on a scale of 0 to 10. A high NPS score indicates that you have a strong customer base and that your product is generating positive word-of-mouth.

Customer lifetime value (CLV) is the total revenue you can expect to generate from a customer over their lifetime. It is calculated by multiplying the average revenue per user (ARPU) by the average customer lifetime. A high CLV indicates that you are providing value to your customers and they are likely to continue using your product for many years to come.

Measure Your Way to SaaS Success

Having data to inform your marketing efforts is crucial. But for SaaS companies, ensuring that data aligns with your sales model is key.  Measuring and analyzing acquisition, revenue, and retention metrics likely be the difference between runaway success and frustrating sales numbers. 

For more on finding the most valuable marketing metrics for your business and other B2B marketing insights, follow the LinkedIn Ads Blog.