As a sales manager, it’s important to stay on top of the performance of your company’s sales process. But when you’re transforming a company to selling software as a service (SaaS), understanding which KPIs are key to success can be challenging. In this blog post, we discuss five of the most important sales KPIs when transforming your company to selling SaaS and how these metrics can help you track progress in achieving your goals.
Customer Acquisition Cost (CAC): CAC measures the total cost of acquiring new customers through marketing and sales efforts. It helps you understand how much it costs to acquire new customers and provides insight into the effectiveness of your customer acquisition strategies. For example, if you have a high CAC, it may indicate that there are opportunities for improving customer acquisition processes and reducing costs.
Customer Retention Rate (CRR): CRR measures the percentage of customers who remain with your business over time. This metric is especially important for SaaS businesses because customer retention is critical for long-term success and sustainability. Tracking this metric allows you to identify areas where you may need improvement in order to keep customers satisfied and reduce churn rate.
Average Revenue Per User (ARPU): ARPU measures the average revenue generated from each user. It helps you understand how much money each customer contributes to your bottom line and provides insight into pricing strategies and other monetization models that could be implemented in order to maximize revenue per user.
Total Contract Value (TCV): TCV measures the total amount of money customers commit upfront when purchasing a subscription or service contract with your business. This metric gives you an indication of both the size of deals being signed as well as customer loyalty over time; tracking it allows you to better understand pricing models, discounting levels, upsell opportunities, etc., so that you can maximize customer value over time.
Net Promoter Score (NPS): NPS measures how likely customers are to recommend your product or service based on their experience using it. It provides an indication of customer satisfaction levels and is particularly useful when launching new products or services as it allows you to get feedback from customers quickly in order to improve offerings before they become widely available.
Conclusion: When transforming a company from traditional product sales model into SaaS offering, tracking the right KPIs is critical for measuring progress towards goals such as increased revenue, improved customer satisfaction levels, or reduced expenses related to acquiring new customers or retaining existing ones. By monitoring these five key metrics—CAC, CRR, ARPU, TCV, and NPS—you can gain valuable insight into how well your transformation efforts are paying off so that you can adjust accordingly in order to maximize profits while ensuring customer satisfaction remains high throughout the transition period.