Our simple cheat sheet of metrics can help you pinpoint ways to improve the profitability of your SaaS business.
To be successful in scaling up your SaaS business you either need to secure investment or be able to make a lot of money on your own. Measuring your profitability may seem simple, but when you’re only looking at the bottom line you’re not necessarily going to be able to see how you can improve it. Increasing profitability means breaking down the areas of your business such as:
- acquisition – your sales and marketing
- service delivery – your operations and running costs
- retention – the cost of keeping existing users
Then you need to look for approaches that will help you to reduce costs, increase efficiency or increase revenue. In our download, each of these areas and approaches comes with a metric that you can use to monitor and analyse performance.
We’ve talked recently about how switching to IaaS or bare metal cloud can reduce SaaS costs and increase customer lifetime value (CLV), but that’s not the only way to increase your profits. Each of our metrics also comes with ideas on how you can work to improve it. Automating sales and marketing communications can increase the efficiency of your acquisition spending. Adding premium features can increase your revenue from existing customers. In fact, even changing the maximum size of any team within your organisation can increase productivity.
Of course, being profitable isn’t always enough in and of itself, but it can help you secure the funding you need to take your plans forward. Proving your current or future potential for profitability is important for investors, but you’ll also need to focus on gaining users, making the most of your data, or innovating to stay ahead of the competition.
Still, making money is a good start, so download our guide to SaaS profitability now.