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In my experience, the answer is different depending on your type of business or stage of your business. It could be visit to sign up rate, NPS, MRR...

This question related to a Webinar that I'm doing on the same topic.

  • SE

    Sean Ellis

    about 3 years ago #

    I would say that Qualaroo's metric is MRR. It reflects a lot of the other important SaaS metrics.

    • RG

      Ryan Gum

      about 3 years ago #

      Interesting. For Qualaroo I thought it might be something like 'number of nudges created per week' or 'number of nudge replies per customer'. Or is this too far away from the bottom line?

      I'd like to know to help guide my own metric focus.

      • HS

        Hiten Shah

        about 3 years ago #

        Ryan, for most SaaS subscription based businesses (I'm working on ~3 right now) once you get to a point of scale and trying to grow the business, MRR is one of the most indicitive metrics with regards to health of the business. It accounts for new business, upgrades, downgrades and also churn. It's also a compounding calculation which is the type that tends to be better for measuring growth. I'd suggest trying to focus on a metric that compounds, especially if you are only going to focus on one. More on compounding metrics here: http://www.quora.com/What-is-Facebooks-User-Growth-team-responsible-for-and-what-have-they-launched

        • KV

          Kyle Van Pelt

          about 3 years ago #

          I LOVE compounding metrics! They are what make SaaS so amazing.

          It's interesting to think from the top down in terms of MRR. While I think that is a great approach, an argument could be made that focusing on a bottom up approach will directly reflect higher MRR and thus higher growth.

          Ultimately growing MRR is an effect of many different causes so it is the best indicator of growth.

          I'm surprised you didn't say conversion rates Hiten :)

          • HS

            Hiten Shah

            about 3 years ago #

            I've actually tried both top down and bottom up. I have found that MRR is closest to a real indicator of the health of the business, so if I were to pick just one metric for SaaS subscription businesses, it would be MRR every day. There are derivitive metrics that come out of MRR that are worth measuring but this question was focused on the one metric, not the few ;)

            What if everyone on your team looked at the MRR on a daily basis. How would that change what your team did every day?

            • SE

              Sean Ellis

              about 3 years ago #

              Love the idea @hiten that everyone on the team look at MRR every day. Taking it a step further, I would personalize the MRR report for each team member with 3 bullets under it that list the three ways they personally can impact MRR. A Sr Exec might need to meet with each person 1:1 to brainstorm how they impact MRR, but the reminder bullets would be awesome.

      • SE

        Sean Ellis

        about 3 years ago #

        MRR is a reflection of these other metrics. It capture new customers, customer engagement (via up sells) and customer retention. --- Funny, just wrote this and then noticed that @hiten essentially wrote the same thing :)

  • BY

    Ben Yoskovitz

    about 3 years ago #

    It really does depend on the type of business you're in and the stage you're at. An early stage SaaS B2B business wouldn't look at MRR initially, but probably focus on something related to engagement first.

    In Lean Analytics (book I co-wrote with Alistair Croll - see: http://leananalyticsbook.com) we talk about the One Metric That Matters - the single metric you should focus on at any given time in your business. But the OMTM does change, and I think there's a couple ways to look at it.

    I like the idea of a single OMTM as a business health indicator. It doesn't tell you the whole story, but it gives you a good enough indication to warrant further investigation. If MRR is your OMTM and it goes up, you want to know why and do more of that; if MRR is going down, you have to fix the underlying problem.

    Everyone should be responsible for the OMTM / business health indicator, but each person/team might be experimenting on something different, and in turn using other metrics for measuring their own progress. In that sense there are 2 OMTMs - the overarching business health indicator and the metric you're measuring your experiments against that in turn affects the business health indicator.

    This is a blog post I need to write out to explain more clearly. :)

    • MB

      Morgan Brown

      about 3 years ago #

      Thanks Ben—this is great insight.

    • JM

      Jason Meresman

      about 3 years ago #

      Great points Ben. The type of business you're in, and the stage of your business, determines the one metric that matters.

      I also agree that one metric should be owned company-wide, and that other single metrics should be owned by individuals/teams.

  • PL

    Peep Laja

    about 3 years ago #

    Revenue per visitor for ecommerce

    • JB

      Justin Brooke

      about 3 years ago #

      Ours is similar for supplement/publishing companies.

      We look at CPA vs AOV or basically costs vs. earnings. If those fall below a certain threshold we have other metrics we fallback to that point us to where the problem might be and how to correct it.

  • ND

    Nichole Elizabeth DeMeré

    about 3 years ago #

    As someone who focuses on the customer success stage of growth (within a growth team), I'd look at churn / retention.

  • DR

    dave rigotti

    about 3 years ago #

    MRR. The entire team at Bizible is aligned to this metric. For example, the marketing team does not carry a lead goal, only revenue.

    • VT

      Vi Tran

      about 3 years ago #

      Us too. We have a SaaS product and yes...MRR is everything to us.

  • BS

    Bhaskar Sarma

    about 3 years ago #

    If I am running a business that's bringing in cash I would look at
    # of customers x # of orders/per customer x value/order

    Increase one, you get a corresponding bump. Increase two, or the three metrics at the same time and you would get an exponential bump.

    However, depending on your business model 6 months might be too less a time to calculate.

    For something like a blog, reader engagement would be a good metric to base a number of decisions on. And I would measure reader engagement by a combination of time on site and email sign up rate

  • ND

    Nate Desmond

    about 3 years ago #

    For my blog, I look primarily at "reading time" (visitors x avg time on site). This helps me measure both how well my content is getting shared (# of visitors) plus how useful people find the content (time on site).

    Secondarily, I look at the conversion % from visitor to email subscriber.

  • BH

    ben hoffman

    about 3 years ago #

    Of course MRR and all the related economic metrics - ARR, MRR churn, bookings, etc.

    With that said, as someone who is focused with growth/product, I like to focus on numbers that are related to increased engagement.

    I'll definitely attend this webinar.... curious to hear what Sean and Peter have to say.

  • MS

    Mike Smith

    about 3 years ago #

    I always look at 1) trends for month, quarter and 2) Percent above or below goal with daily, weekly burn down charts. :)

    Primary metric for a scaling business is MRR. The problem is in B2B MRR is a lagging metric compared to campaigns you're executing today, which sucks. As a growth marketer my "one metric that matters" (OMTM) is total volume and growth rate of engaged leads/trials, which ultimately convert at a higher rating into paying customers (MRR).

    Best OMTM's are leading indicators of success. Correlate what your high converting leads/trials have in common, then you can score them, track it and optimize to it etc.

    More details here (must read book) - http://leananalyticsbook.com/one-metric-that-matters/

    Rock on!

  • TW

    Tommy Walker

    about 3 years ago #

    From the publisher standpoint, I try to look at something between the intersection of views, TOS, scroll depth & comments and/or shares (depending on the goal of the article) Don't think that helps a whole lot with the conversation though :-/

    • SE

      Sean Ellis

      about 3 years ago #

      Maybe the metrics that encompasses all of that is "total user minutes"? That would be pretty similar to MRR. If you can't retain and engage existing users, hard to keep replacing them with new users.

    • SC

      Shana Carp

      about 3 years ago #

      actually, you're in a pretty typical place as a publisher. it is very hard to measure the righ ROI for publications

  • JG

    jordan gutierrez

    over 1 year ago #

    Depends

    Ecommerce: Revenue
    Blog: Page Views
    Early Stage SAAS: Upgrades
    App: depends on goal find what could be a good "engagement" metrics and use that
    Late Stage SAAS: MMR or Churn

    Bonus 1: Revenue still kinda important, specially if not VC backed

    Bonus 2: If you want to have some fun and go the opposite to revenue look at NPS

  • HS

    Hemal Shah

    about 3 years ago #

    Retention - "You're providing enough value so your users continue to come back."

  • ME

    Marc Eglon

    about 3 years ago #

    Monthly Subscription Renewals.

    It's deep in the funnel so gives me a sense of free trial activation, continuity for existing subscribers, and of course revenue.

    MRR would give a similar readout.

    (This is for subscriptions to my iPad magazine and includes a free trial, so similar to a SaaS product in many ways).

  • MM

    Mark MacLeod

    about 3 years ago #

    YoY growth in revenue. Pretty simple, but it cuts through everything. If you're not growing you're declining. Annualized revenue growth is ultimately what you're after and synthesizes the results of all other metrics

  • JG

    Jay Gibb

    about 3 years ago #

    +1 for MRR for scaling-phase subscription businesses.

    It encapsulates conversions, upgrades, downgrades, churn and it can be used to calculate run rate and to make feasible projections.

  • IL

    Ian Larson

    about 3 years ago #

    The best indicator of creating a great experience is whether people want to do it again. And again. And again and again as part of their daily routine. Visitor Recency is the best way to measure that.

  • MS

    Michael St. James

    about 3 years ago #

    Yes, agreed re: SaaS- MRR and specifically, looking at Churn matrix. This means: is the average time of captured MRR rising or falling, are they signals there? For instance is the average churn happening at a specific time, like 3mos, 6 mos, 14 mos, is it during holidays, is it because of when they subscribed? With that information I could adjust targeting or even try to design some preventative churn remedies.

  • DZ

    Dan Zhao

    about 3 years ago #

    Just thought about this too, it really depends on the business but I think you can generalize based on the type of business that you are running. Pick something that makes sense and frame your company's decision making strategy around that one key metric.

    https://www.lob.com/blog/do-the-right-things

  • GB

    George Bullock

    about 3 years ago #

    If I'm riding on one metric to keep me headed in the right direction, I would focus on optimizing the most critical factor to driving higher gross margins.

    At the moment, that metric would be the number of billable views of content, measured on a weekly basis.

  • MR

    Mike Raab

    about 3 years ago #

    MRR is clearly the key metric. You could focus on anything, but without a positive growth month over month in MRR, the business will not survive.

  • SW

    Sean Wiese

    about 3 years ago #

    Maybe not the most eloquent answer, but as an just launched ecommerce startup, I am measuring cash in the door.
    This could be subscriptions sold, single items sold, etc but the dollar reigns supreme.

  • KF

    Kevin Faul

    about 3 years ago #

    New signups/users/members. It's the single metric that any outside party will ask about, especially investors. Even MRR is subordinate to signups/users on a valuation basis

  • DP

    daniele pelleri

    about 3 years ago #

    For AppsBuilder conversion rate from free trials to customers (we have a very low churn rate)

  • MO

    Michel Ozzello

    about 3 years ago #

    I always say that "numbers don't lie but liars use numbers". Looking at one metric only will only tell you part of the story and will be too misleading and get you to make bad decisions.
    For example, you can look at MRR and if it is trending up you'll be happy. But if it is trending down and you don't have other metrics to work with, you won't know what's not working and therefore can't act to solve anything. Same for NPS.

  • SC

    Shana Carp

    about 3 years ago #

    Users Gained Who also completed a bandit.

  • RA

    Ryan Abrams

    almost 2 years ago #

    It definitely varies depending on the stage of the business and type of business. It can even differ within the different sections of a marketing department.

    MRR would be mine because it is a great compass for overall business health (in SaaS), but a Lead Generation expert might look at Cost Per SQL, Customer Success might look at Churn Rate, etc.

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