As a bottom-up SaaS founder, it is essential to track key metrics in order to measure your progress and success. Tracking metrics also helps you identify and solve issues that arise during the growth process. In this blog, we’ll discuss three categories of metrics that early-stage bottom-up SaaS founders should track: pre-revenue, post-revenue, and additional metrics.
Pre-Revenue Metrics
User/Logo Retention: User retention is a critical metric because it speaks to how engaged your users are with your product and how loyal they are to your brand. Measuring user retention involves determining how many users return after their initial visit or signup. To calculate this metric, divide the number of users who returned by the total number of unique visits or signups in any given period. If you want to focus more on long term loyalty, look at logo retention instead; this measures how many logos remain active over a given time period. Strategies such as personalizing content and offering discounts can help improve user or logo retention rates.
Invite Rate and Conversion Rate:
Invite rate is an important pre-revenue metric because it gives you insight into how quickly new users are joining your platform through invites from existing customers. To calculate invite rate, divide the number of invitations sent out by the number of customers who sent them out in any given period. Invites need to be converted into actual signups in order for them to be effective, which is why tracking conversion rate is also important; this considers how many people actually accepted an invitation from an existing customer and registered for your platform. Optimization techniques such as streamlining the onboarding process can help increase both invite rate and conversion rate.
Top-of-Funnel Growth:
Top-of funnel growth measures how quickly you are acquiring new leads through organic (e.g., SEO) or paid (e.g., PPC) channels—this often serves as a proxy for overall health of your business since organic leads tend to have higher quality than those acquired through paid channels . To measure top-of funnel growth accurately, track the number of website visits or new user registrations each month; compare these numbers against prior months in order to understand whether there has been any improvement or decline over time. Tactics such as creating targeted content campaigns can help boost top-of funnel growth over time..
Post Revenue Metrics MRR/ARR Growth:
MRR stands for Monthly Recurring Revenue—this metric looks at revenue gained from subscriptions on a monthly basis whereas ARR stands for Annual Recurring Revenue—this looks at revenue gained on an annual basis from subscriptions . It’s important to monitor both MRR and ARR because they indicate whether you are growing steadily or not (MRR) as well as what potential revenue could be generated within one year (ARR). To do this accurately, compare current MRR/ARR figures against previous months/years; set realistic targets based on these comparisons so that you know where you stand with regards to meeting goals related to revenue growth over time..
Customer Retention:
Customer retention measures how successful you are at keeping customers using your product over time; high customer retention rates usually mean higher potential revenues since loyal customers often spend more money on products than those who churn soon after signing up.. Measuring customer retention involves dividing retained customers by total paying customers in any given period; filter this data further by segmenting different cohorts according to when they first signed up so that trends become more visible.. Best practices such as incentivizing customers with rewards programs can help improve customer retention rates over time..
Monetization:
The goal here is simple—turning users into paying customers! This means understanding what drives people’s decisions when signing up for a subscription service so that pricing and packaging strategies can be refined accordingly.. Analyzing two important metrics—customer LTV (Lifetime Value) and CAC (Customer Acquisition Cost)—can provide valuable insights into whether monetization efforts are working effectively.. LTV measures what amount of money each customer brings in during their lifetime while CAC measures what amount it costs per customer acquisition; if CAC exceeds LTV then monetization needs tweaking!. Additional Metrics Engagement Levels (DAU/MAU): DAU stands for Daily Active Users while MAU stands for Monthly Active Users; tracking these two metrics helps determine engagement levels across all platforms used including web apps, mobile apps etc.. Calculating DAU/MAU involves dividing daily active users by monthly active users in any given period; understanding why there may be discrepancies between DAU/MAU helps founders determine ways of increasing engagement levels across all platforms used..
Conclusion
When running a bottom-up SaaS business, tracking key metrics is essential for ensuring success — especially during the early stages when growth needs constant monitoring . In this blog we discussed three categories of metrics that early stage bottom up SaaS founders should track — pre -revenue , post -revenue , and additional metrics — along with detailed explanations about each one . We hope this blog provided helpful information regarding which metrics should be tracked , why they matter , and how they can be monitored effectively . Good luck! Using SEO?The short answer is yes! SEO is an intentional, data-driven approach to increase the quality of your business’s digital marketing and the visibility your business receives. The benefits of SEO can only help your business, making it worth the time spent researching. SEO takes a lot of deliberate analysis. It is a complex, ever-changing practice. For SaaS founders looking for tangible results from their efforts towards growth optimization, keeping an eye on key performance indicators will guide decision making processes throughout development cycles — ultimately leading towards better outcomes . With careful analysis backed up by accurate tracking of relevant key performance indicators , SaaS founders will have all necessary tools at their disposal in order ensure maximum profitability now and into the future . Good luck!
