MBA1011 8 Essential Metrics Every SaaS Should Track P1

Hey O. Welcome to the Hundred Dollar MBA show. Because you know you can't build your business empire alone. We got your back with daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher, Omar Zenholm. I'm also the co founder of the hundred dollar MBA, a complete business training and community online over at 100 MBA net and today's lesson is part one of a two part lesson. In this two part lesson, we're going to cover the eight essential metrics you need to follow that you need to track in any SaaS business. When I say SaaS business, I mean software as a service or any business that has some sort of subscription where you charge customers every month, every year. Now, when it comes to the metrics that you track in any SaaS business, there's tons of metrics. You could track over 50 metrics if you wanted to. But because I run a SaaS business with webinar Ninja, our webinar software, I really needed to boil it down to the essentials. I can't track everything because if I'm tracking everything, I'm forced to have to put something into place to improve it. And I just don't have the time or the manpower to do that. So we're going to focus on the eight essential things you need to track. Now remember, we're tracking these things so we can improve them, so we can have goals set up for them and so we can reach those goals. So in today's episode, part one of the lesson, we're going to cover the first four essential metrics and then tomorrow's episode, the next four, I'm going to tell you what these metrics are, how to track them, and share with you some tools that really help and most importantly, how to make sure that we're always raising the bar and setting up goals to improve these metrics. I know we're talking about analytics in the next couple episodes, but I promise you this won't be boring. This will be really beneficial and it'll empower you to improve your business. So let's get into it. Let's get down to business. Today's episode of the $100 MBA show is brought to you by Long Tail Pro, a step by step system to help you quickly discover thousands of profitable, easy to rank keywords for almost any niche. Visit longtailpro.commba and use coupon code MBA for a free trial and 30% off your subscription forever. Again, that's longtailpro.commba AND use code MBA. So again, in part one, today's lesson. We're going to cover the first four metrics you want to track in any SaaS business. Now, with any business online, especially a SaaS business, everything starts with your website. This is how people find out about you, this is how people buy, this is how people, you know, sign up for your newsletters, sign up for your trials, whatever. So we're going to start with the essential thing, which is your website. This is kind of the door to your store. So the first metric we're going to track is monthly unique visitors. This is the number of unique people that visit your website. So if you have five different people that have visited your website two times each, that's still five unique visitors. Basically, we're trying to find out how many new people are visiting our website in this month. Now, just a heads up, all these metrics we're going to be covering, it's easier to track them on a monthly basis. So we have a snapshot of how many people have visited our website in this month. Now, how are you going to track this? Now the easiest way to do this is with Google Analytics, which is absolutely free. You can go to google.com analytics and sign up with your Gmail account. And basically Google's going to give you a piece of code that you're going to paste in the header of your website and all your websites pages. You should be able to do this in one area of your website. So it will cover all the pages on your website. If you don't know how to do that, you can contact your website admin or your website host or the service you're using. It's pretty straightforward. And basically this piece of code talks to Google Analytics in your account and says, hey, here's all the analytics when it comes to visitors, but the one we're going to really look at is unique visitors. How many monthly unique visitors we get every month. This is essential because we want to be able to say, hey, new customer has come to my website. What have they done? Sign up, did they buy? Did they do this? This comes later on. But we need to track how many new people come to our website every month. Now why are we tracking any of this? So we can improve it. Right? So if I look at my unique visitors this month, let's say for example, it's a thousand unique visitors. I need to set up a personal goal for myself so that I can hit that goal. So we're not just tracking for the sake of tracking here. We're tracking so we can know how close Are we to that goal every month? So say, for example, I set up a goal of increasing by 10%. So I want 1100 unique visitors next month. So keep in mind, whatever we're tracking, we're tracking it for the sake of knowing where we are now so we can set up a goal to achieve in the next month. So metric number one, monthly unique visitors. Metric number two, leads. Let me define what leads are. Leads are basically emails that you collect, and these are people that have come into your system, and that includes people that are customers or not customers yet. So they could sign up for your newsletter, sign up for a free course, sign up for a freebie. Maybe some of them have converted to customers, but at some point they were a lead, they came in via an email, opt in. So you want to track leads. You want to know how many people are not only coming to your website, but are actually including their name and email address and they become part of your lead system. They have been added to your email marketing software. So that in itself is a conversion. So it's a win. You got somebody to give up their email in exchange for some sort of freebie. You now can start a relationship with them and convert them to a customer. Maybe they're already a customer, but the point here is that we want to see how many people that come to our website become a lead. We're going to talk about conversions in a bit, but right now we just got to track this number. How many leads do I get every month again? If I'm getting an average of 300 leads a month, I want to increase that to, let's say, another 10%. So next month I want 330 new leads. Now, mind you, 10%. Just something I'm using as an example. You may want to go 100% or 50%. And remember, some things are easier to achieve. It's a lot easier to, you know, increase your lead numbers by 50% than your sales numbers. That conversion from website visit to a lead is a lot easier. They're not giving up money, they're giving up their email address. So the barrier of entry is lower, therefore your growth can be higher. Okay, so we have unique visitors and we have leads. What's the third metric you're going to have to track so you can improve upon? And that's signups. Now, signups can include free trials or people that are in their grace period. But sign up basically means that they have signed up for your service but have yet to be charged. There's a difference between a sign up and A customer. So with us we have a 14 day trial when they sign up for an account that's considered a sign up. They only become a customer when they get charged on day 15. So money hasn't changed hands yet, but they are signing up. So that's kind of a next level past being a lead. This is very important to track because later we're going to have to track, you know, charges, customers, all that kind of stuff. And we want to know how many people actually sign up and then become customers. And we also want to know how many of the leads sign up. So you get the point. These numbers will start getting smaller and smaller, right? So you might have a thousand visitors, but 200 leads, but 50 signups, how many of them will be customers? You get the point. This is very important because you need to track every step of the way to see where you can increase conversions and increase the total number of money you actually make. See, the whole point of tracking these metrics is knowing where you can improve and improving it. But if you don't know the numbers, if you don't know what's happening in every stage, you have no goalposts, you have no real way to actually measure if you're getting better or not. So we're going to track signups, people that have created accounts, this could be free accounts or free trials, but they still have not been charged yet. They're not customers yet. Now we still have one more metric we want to cover today, the fourth metric. And then I'm going to show you how this all works together with all these four metrics. But, but before that, let me give a love to today's sponsor. 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You can have a beautiful, powerful online store up and running in just hours. And because you listen to this podcast, you're going to get a special 15% off your first purchase. Just go to weebly.com mba that's W-E-E-B-L-Y.com mba. Don't just build a beautiful website, build a successful online business with Weebly. All right, metric number four, and that's the number of customers that you acquire in a month. We're talking about new customers. It doesn't matter what plan they're on, how much they were charged. We're trying to just track right now customers, people that have been charged on their credit card, right, or whatever form of payment you're accepting. This is very important because this is kind of the goal. You've been working so hard. You've built a website, you've fine tuned your sales copy, you have a great video. You have all these lead gens and lead magnets and great freebies, and they get on your email list to become a lead, they sign up for your trial, and then they win them over and they become a customer, they get charged. We need to track that number. Because really, that says, after all my efforts, after all the filters, this is what I get. How can I raise that number? How can I increase that number? Let's say, for example, that number is 30. I get 30 customers and I had a thousand unique visitors that month. Well, I can work backwards. I could say, how can I increase traffic to get more visitors, to increase the chances of getting more customers? You can do a ratio, like for every thousand visitors, I get 30 customers. So if I get 2,000 visitors, I should get 60 customers. If all else is equal. But let's not stop there. Let's say we have lead numbers, right? So they are a lead before they become a customer. So if I increase my lead numbers, then I should increase my customer numbers. Well, what about when they go from lead to becoming a actual signup, where they go on trial? Maybe if I entice them and make it more lucrative, a better idea. Or show them the benefits of signing up for that trial. If I get more signups, the math says I will get more customers. So we got to track how many customers we get every month. Now, we talked about Google Analytics, tracking your unique visitors. What about your leads? Well, you can track your leads via your email marketing service provider, Whether you're using Mailchimp, ActiveCampaign, Infusionsoft, AWeber, they're gonna tell you how many contacts that you get every month. You may have to do some filtering, but you'll find out you wanna know that monthly number. So that's pretty straightforward. What about signups? Well, signups, whether they're on trial or some sort of free account, should come from your app itself. Or if you have a free trial, you should be able to track that via your payment processor like Stripe, where you could say, hey, I want all my customers that have not been charged yet. Also, customers on trial can be tracked with other tools like Bare Metrics. I know the founder, Josh Pickford of baremetrics.com and it's a great tool if you want to track things like customers that are on trial, how many people have on trial. You can also track the fourth one, how many customers you acquired with something like Bare Metrics. You can also do this with your payment processor, but it's a little easier and actually prettier to look at barometrics. Now I know that it seems like, wow, everything's all over the place. I got to actually look at these numbers. Well, it's actually not as complicated as you may think. You can create a simple Google Sheets spreadsheet and every month just plug in the numbers, plug in your unique visitors from Google Analytics, plug in your leads from your email marketing service provider, and then if you're using a tool like baremetrics, then you can plug in your actual new signups as well as your actual customers. To wrap up, I want to give you an actual assignment before tomorrow's episode. I want you to fire up a Google sheet, an Excel document, whatever, and just create these four columns, these four metrics, unique monthly visitors, leads, signups and customers, and just leave the cells empty. You can plug in the information later and then you'll add the next four in tomorrow's lesson part two. So make sure you tune in tomorrow where we cover the next four essential, the whole eight, the essential metrics you need to follow, you need to track and improve upon as a SaaS business. Thank you so much for listening to the $100 MBA show. Wow, that was a jam packed episode. We got lots more tomorrow to wrap up this two part lesson. Full disclosure, I've been kind of tracking these things in a inefficient way. I have been tracking them, but now I'm trying to clean up a little bit and kind of keep it centralized so I can actually track things against each other. And this kind of prompted me to do this lesson and share what I'M doing to improve our tracking of these essential metrics. All right, before I go I want to leave you with this. Sometimes some of us we find this stuff a little bit dry and boring but this is going to make our life easier and it's going to make things clearer for you. Sometimes we get overwhelmed and we're like hey am I getting better? How well are we growing? Are we growing at all? What are we doing to improve to our growth and our overall, you know, revenue by having this spreadsheet and having some sort of dashboard where you can look at and say okay we are growing or we're not growing or this is where we can improve. It's in black and white and often overwhelm gets cured when you just have some information. Alright thank you so much for listening. I'll check you in tomorrow's lesson free ride Friday and part two of this two part lesson. Alright, I'll check you then. Take care of Sam.