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ROI in B2B SaaS beyond the traditional metrics-new blog of small business coach associated

ROI in B2B SaaS Beyond the Traditional Metrics

Every B2B SaaS business owner wants to know if their investment is paying off. So, you crunch the numbers and closely monitor the usual metrics. You look at your Monthly Recurring Revenue (MRR), Customer Acquisition Cost (CAC), Customer Lifetime Value, Churn Rate, and other KPIs – all the classic ROI metrics. But, what if there’s more to it? The thing is, traditional metrics are limited. They fail to paint a holistic picture of how your B2B SaaS business is performing.

Join me as I go beyond the traditional metrics to gain a deeper understanding and clearer picture of your business’s performance.

The Limits of Traditional ROI Metrics

B2B SaaS businesses typically use various subscription management software to track these traditional metrics. While these metrics matter, you can’t ignore the following limitations:

  1. They focus too narrowly on financial results
  2. They only track short-term gains
  3. They ignore customer and employee experiences that affect your bottom line
  4. They don’t reflect your overall business goals
  5. They can trap you into cutting costs unwisely
  6. They lack qualitative insights like brand awareness

Exploring Beyond the Traditional B2B SaaS Metrics

B2B SaaS beyond the traditional metrics

To move past these limitations, here are some alternative metrics to consider: 

1. Product Adoption Rates

The product adoption rate measures the percentage of users that adopt and regularly use different product features over time. 

To calculate this metric:

Product Adoption Rate (%) = (Number of Adopting Users / Total Number of Users) x 100

High adoption rates indicate customers find value in your offerings and are more likely to stick around. Moreover, tracking adoption rates will help you identify unused features to remove or improve.

2. Customer Satisfaction and Retention

Are your customers happy and renewing their subscriptions?

Do they readily recommend your solution to others?  

Tools like surveys and customer success programs can help you measure satisfaction and identify areas for improvement. This is important since acquiring new customers can cost you 5X more than retaining the existing ones.

Luckily, Younium reports that B2B SaaS subscription businesses are adopting measures, like 4th-generation subscription management models to improve CX and satisfaction. So, if you’re one of these, you’re on the right track to boosting customer retention. 

3. Time to Value (TTV)

Time-to-value measures how long it takes from when a user initially signs up to derive value from your SaaS platform. It’s like asking, “How long does it take for users to find your product helpful?”

To calculate TTV:

TTV = Date user first achieves result – Signup Date

A shorter TTV suggests your solution is user-friendly and has a faster onboarding process. It also boosts customer retention, reduces churn rate, and gives you a competitive edge.

4. User Engagement and Adoption Rates

These show how frequently customers actively use your platform and explore its full potential. They give you a clear understanding of how users interact with your platform. 

So, if you notice high engagement rates, chances are users find your solution valuable and are more likely to become long-term customers.

To gain valuable insights into user engagement, consider exploring the various small business CRM software. These tools can measure specific metrics like feature usage, session length, DAU, and MAU. 

5. Customer Success Stories and Testimonials

saas

Success stories and testimonials are social proof. They show how real customers benefited from your product, giving you a better understanding of its real-world value. 

With 92% of buyers trusting online reviews as much as personal recommendations before buying, customer testimonials pack a persuasive punch. 

They show real-world examples of how your solution has helped other businesses achieve their goals. 

Furthermore, social proof builds trust and brand credibility, setting you apart from other B2B SaaS businesses.

6. Net Promoter Score (NPS)

NPS measures customer loyalty and how likely they are to recommend your product on a 0-10 scale. Typically, NPS groups customers into:

  • Detractors (0-6): Most likely to damage your reputation
  • Passives (7-8): Indifferent
  • Promoters (9-10):  Most likely to promote your platform 

To calculate NPS:

NPS = % of promoters — % of detractors

So, a higher NPS score shows a healthy brand-customer relationship, customer engagement, and higher chance of referring more business your way soon. 

7. Total Economic Impact™ (TEI) Analysis

TEI Analysis evaluates the total economic impact of a technology investment. Developed by Forrester Research, TEI looks at your product’s costs, benefits, flexibility, and risks.

While complex, TEI can help you make smarter decisions on ROI by understanding the complete financial impact. 

For instance, it can give you solid numbers to show prospects how your product pays for itself. This can be especially beneficial to profit-driven B2B SaaS businesses. 

It’s About More Than Just the Numbers

While traditional metrics provide a useful image, smart B2B SaaS businesses go beyond, to get the full story. These alternative metrics can help you better understand your offerings’ true impact, effectiveness, and success. 

Leverage the insights from these metrics to make data-driven decisions to improve your offerings, improve customer satisfaction, and maximize long-term ROI.

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Author Bio – Reena Aggarwal

Reena is Director of Operations and Sales at Attrock, a result-driven digital marketing company. With 10+ years of sales and operations experience in the field of e-commerce and digital marketing, she is quite an industry expert. She is a people person and considers the human resources as the most valuable asset of a company. In her free time, you would find her spending quality time with her brilliant, almost teenage daughter and watching her grow in this digital, fast-paced era.

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