5 Key business metrics for SaaS business
I've read a lot about business metrics and I could leave only 5 most important from them. It's as cost of customer acquisition, monthly recurring revenue, churn rate, average revenue per customer and lifetime value.
What product metrics usually are observed
Marketing specialists usually view at google analytics metrics such as number of visitors, depth of site visit, time on site, number of registered users etc. The point is that if you have betters metrics than you'll definitely have better business metrics. But, it's wrong.
These metrics are bullshit
They don't give you any information about real situation in your project. User can sign up and never return again. For instance Linkedin reported number of registered users and it's a good example of bullshit metrics.
For many kinds of online businesses -- collaborative, SaaS, media, game, mobile app -- the One Metric That Matters is similar: ENGAGEMENT
Engagement numbers are critical: daily active users, monthly active users.
In these businesses, revenues are generally a function of engagement. If you engage your users well than you'll definitely be in a good position.
The exception is transaction-based businesses. So, revenue is almost always a function of active users, it's true.
So, you should track engagement vs other metrics and of course in a right slice of people not sessions, pageviews or visits.
Try bitscup analytical tools for free. In the next post we'll discuss what is the right cohort report you should have