KPIs That Indicate SaaS Is In Demand

The KPIs that indicate SaaS is in Demand

The trend of adopting customer relationship management strategies is adopted by many enterprises nowadays. Such CRM & Sales Stack strategies impart a positive influence on businesses since the quality of a service is something that always stays in clients’ memories regardless of what price they paid. With immense technological advancement in the past decade, the CRM & Sales Stack strategies have also changed from traditional to newer ones.

The business owners come across many choices as far as the selection of a CRM is concerned. Businesses need to take this decision seriously because what they select now will determine their relationship with the customers later. The CRM broadly offers on-premise and Software as a Service systems to manage the relationship with clientele.

Let’s have a look at the factors that make SaaS a preferable choice for the businesses as compared to on-premise CRMs;

Number of Conversions

SaaS has nothing to do with all the hardware buying procedure and allocating budget for optimizing the hardware time to time.  Unlike traditional CRM modes where there is a need to buy the hardware before the deployment of software, SaaS products are easy to handle. It reduces expenditure and also makes it possible for customers to invest the saved amount of money to attract new customers for their business.

The fact that Software as a Service has nominal upfront costs, and it is a cloud-based service provider makes it easy for the new businesses to adapt. The increasing number of conversions from visitor to a free trial and from free trial to permanent clients is a significant key performance indicator of SaaS success.

Related: How To Analyze Your Sales Pipeline and Track Sales Effectively

The fluctuations in Revenue Streams

While the traditional on-premise CRMs focus on selling their software along with other utilities as a result of a single payment, the case is not the same for SaaS products. The SaaS products rely on monthly recurring revenues since the users are charged on the monthly basis. The MRR (Monthly Recurring Revenue) is an important key performance indicator of the success of a SaaS product.

Therefore, fluctuations in the Monthly Recurring Revenue are an important determinant of a customer’s demand for SaaS products. If the revenue is increasing gradually over the time, it is considered as a positive outcome.

Churn Rate & Paying Customers

The statistics about the churn rate and change in some customers with time is also an important key performance indicator to determine the success rate of a SaaS product.

The churn rate in addition to the number of paying customers has shown whether a SaaS product is successful or not. The ease and convenience associated with SaaS products have made it a preferred choice, and it can also be confirmed by taking a look at many yearly figures & statistics.

Calculating CAC

The CAC refers to customer acquisition cost, and it is computed by taking into account all the costs that are allocated towards the acquirement of new customers, and it includes sales as well as marketing expenses and then dividing these costs to the number of new customers that have been acquired by the organization in that period.

If the calculation of CAC shows an increase that means SaaS are demanded by the customers more as compared to the on-premise CRMs. The incessantly increasing sales of SaaS over the years as compared to traditional methods prove the customers’ growing interest in SaaS products.

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To Sum Up

In a nutshell, one of the biggest concerns of a thriving business is none other than its success. This holds true for Software as a Service businesses as well, which has been in the market since the 1960s. The expedience of SaaS makes it a preeminent choice of many running businesses. Most of the key performance indicators reveal the increased customers’ insistence for SaaS products & for their CRM or Sales Stack strategies while trying to find the most valuable one. The demand for customer relationship management tools will be growing steadily because it is like a water for business & more customers are seeking to be assured of qualitative supply.

Food Grows Where Water Flows.

Related: Key Aspects of Building True Customer Demand

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Marijus Andrijauskas

Marijus is the CEO at Teamgate. He's a Lithuanian native but always on the move - he works between Teamgate's offices in London and Vilnius.
Marijus is all about building new products and turning them into businesses. An expert in Cloud Computing and SaaS products, writing his deep insights on everything he thinks of worth mentioning.
Find him on Twitter @MarijusAn

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