A strong growth strategy for SaaS businesses includes selecting, tracking, and making decisions based on relevant SaaS KPIs and B2B KPIs.
However, knowing what to measure is one thing. Measuring those metrics correctly is another.
The most common B2B and SaaS measurement mistakes won’t just skew your data. It can also have a negative impact on everything from your product development to marketing strategy, funding decisions, and company culture.
Here’s the thing: avoiding those mistakes is actually easy. The key is understanding what they are so you can take pre-emptive actions to prevent them.
To help you get started, we gathered five of the most common mistakes we see when it comes to B2B and SaaS measurement and tracking, plus how to avoid each one.
Why tracking B2B SaaS Metrics is important
B2B SaaS metrics offer insight and visibility into the complex ecosystem of a business and how it is growing. There’s a metric for virtually every part of a B2B SaaS operation, such as its revenue, customer experience, sales, and marketing direction.
Tracking metrics go beyond just monitoring and accumulating data. The benefits include, but are not limited to, the following:
- Measuring the company’s progress toward established business goals
- Gaining visibility into which areas of the business are succeeding and which ones need improvement
- Spotting negative trends early so corrective action can be taken
- Aligning teams and departments toward common goals
- Making data-driven decisions about where to allocate resources
- Creates a culture of transparency and accountability
Doing this requires tracking various B2B SaaS KPIs that are relevant to your business, such as customer churn rate, customer acquisition cost (CAC), monthly recurring revenue (MRR), and lifetime value (LTV). Of course, the exact ones will depend on your particular business model and goals.
One of the main reasons to track metrics is so you can have actionable insights that will improve your business’s strategy and performance.
How to measure SaaS performance
The basic steps of measuring performance are largely the same regardless of the niche or industry. Here’s an overview of what’s involved:
1. Clearly define business goals and objectives
This step sets the stage for everything else that follows. Without a clear understanding of what you’re trying to achieve, it will be difficult to choose the right KPIs and metrics, let alone track and measure them accurately.
Make your business goals and objectives as specific as you possibly can. For instance, instead of saying you want to “improve customer satisfaction,” be more specific by setting a goal of “increasing Net Promoter Score (NPS) by 5 points within 6 months.”
The more concrete the goal, the better you can design the systems and processes needed to achieve it.
2. Identify the relevant KPIs / metrics that accurately reflect progress
“Relevant” is the key term here. For example, if your business offers web hosting services, then tracking metrics like website traffic and uptime are obviously going to be relevant.
But if you’re providing accounting software, those same metrics will not be as important as, say, free trials, member sign-ups, or product consultations.
Therefore, identifying the most relevant KPIs and metrics also involves gaining an in-depth understanding of your target market, customers, and what they care about. Only then can you make an informed decision about which ones will give you the most insights into your business.
3. Establishing the required web analytics setup
If you want to track and measure your B2B SaaS metrics accurately, you need to have a robust web analytics setup in place. This usually involves installing tracking code on your website and/or mobile app so you can collect data about user behaviour.
There are many different web analytics tools available, the foremost of which is Google Analytics. You can connect it to other systems, such as your CRM or marketing automation platform, to get even more insights into your data.
4. Routinely deriving and assessing B2B SaaS metrics
Finally, measuring and tracking B2B SaaS KPIs is not a one-and-done exercise. It’s something you need to do on a regular basis, such as monthly or quarterly.
SaaS is such a fast-moving space that what was relevant last month, may not be relevant this month. That’s why it’s important to stay on top of your metrics and ensure you’re constantly pivoting and improving your strategy as needed.
Top 5 mistakes to avoid in B2B and SaaS measurement
One of the most common mistakes when it comes to measuring B2B and SaaS performance is trying to track too many things at once.
It’s essential to be selective and not waste time and effort tracking metrics of low relevance or no importance. Doing so will only lead to information overload and make it more difficult to identify the key insights you need to make informed decisions.
With that said, let’s take a look at other mistakes you’ll want to avoid when measuring performance:
1. Setting unrealistic objectives for your B2B SaaS business
Setting up unrealistic objectives and goals for your business is a very common mistake and one that you can easily fall into. It is most common among SaaS startups that want to dream big but set their expectations way too high.
For a startup, there is no need to aim to achieve 100,000 concurrent users within your first year. You may see competitors achieving this but they are well-established in the market, have instant brand recognition, and have built this user base over years. By setting such a target you will only see any progress you make as a failure, even when there was no chance of achieving it.
You are also less likely to extract insights from the data you have collected when objectives are so unrealistic. If you are massively short of your target, you will be unable to view data in the same way. This won’t enable you to view any issues with your product, customer service, marketing, or processes.
When setting objectives, many organisations will keep them vague and set them beyond any reasonable expectation. This can only lead to poor performance and issues occurring within an organisation and its product.
By setting clearly defined objectives, you have a baseline that you need to achieve. All aspects of a campaign can then be steered towards attaining these objectives. By making them achievable, you can begin to track progress and where there are areas for improvement. If you are unable to achieve realistic objectives, then you know that there are issues and can begin to address them in a timely manner.
Business objectives are something that should be shared with your whole team. When setting objectives, they need to be clear to all, easy to understand, and have a clear direction in mind. This enables the whole team to rally behind the objectives and work towards achieving them together. Setting unrealistic goals will only lead to an unmotivated team and more difficulty in achieving them.
2. Not tracking the right B2B SaaS metrics
This is a mistake that far too many businesses make. They either don’t track any metrics at all or they track metrics that don’t really matter.
One way to identify relevant metrics is to work backward from your established goals. For example, if your goal is to increase customer retention by 5%, then some relevant metrics you may want to track include customer churn rate, Net Promoter Score, and customer satisfaction.
On the other hand, tracking metrics like website traffic or social media followers will not give you the insights you need to improve customer retention.
Metrics should always relate back to your business goals, this is why they should be clear to everyone involved. They can then be used to evaluate performance, to help you understand what is working and where there are areas for improvement. For any SaaS organisation, this is a vital step to better develop your product, the overall service you provide, and how you compare to your competitors.
3. Failing to pay attention to customer churn and retention
Customer churn and retention are two of the most critical metrics for any SaaS business. After all, what’s the point of acquiring new customers if you’re just going to lose them a few months down the line?
That’s why tracking both customer churn and retention is essential. Dedicate time and resources trying to reduce your churn rate, always be on the lookout for signs that customers may be about to leave, and establish systems and processes to prevent churn from even happening in the first place.
4. Failing to track conversions
Many organisations fail to accurately track conversions, some don’t bother tracking conversions at all. For any business, this is a mistake.
When we say many organisations fail to accurately track conversions, this can often be because they’re only tracking new customers. Other conversion elements such as sign-ups, free trials, demo requests, old customers returning, etc. are vital information to any business but are often missed out, not properly set up, or not considered when setting up tracking.
To get an accurate understanding of how well your business is performing, you need to track all conversion types, not just new customers. To do this, we strongly recommend using Google Analytics 4 if you’re not doing so already.
The web analytics capabilities in GA4 are valuable in monitoring and tracking all forms of conversion, from top-of-the-funnel activities to purchase and post-purchase behaviour.
5. Ignoring your SEO metrics
Too many businesses get caught up in paid marketing initiatives and completely forget about SEO. They often prefer the quick results that come from paid media and forget about the long-term benefits that SEO will provide their businesses.
SEO is more than bringing in organic traffic. It’s also about improving brand awareness, boosting your credibility, and increasing conversions. It also has the added benefit of not having to pay to bring traffic to your website.
Because of this, tracking SEO metrics like keyword rankings, organic traffic, and organic conversion rates is essential for any business that wants to succeed in the long term.
How to take your tracking to the next level
Accurate tracking is incredibly important for your business. In order to take advantage of the information your tracking provides, you first need to ensure that it is set up as accurately as possible. Ensure that you know what you want to track, the goals they will be tracked against, and where you want to track them.
By avoiding the five common mistakes we have listed above, you will begin to gather accurate data that is integral to understanding how you are performing against your goals and competition. Along with areas you can look to improve upon.
With tracking being such a complex thing to set up, and the need for it to be done right being so vitally important, why not get in touch with those that have the expertise to do so?
We can help set up your tracking, deliver accurate reports on your KPIs and help create a strategy to improve your performance.