Key Productivity Metrics CROs and VP of Sales need to double down this year

As a SaaS revenue team, tracking key productivity metrics is crucial for success. The metrics that CROs (Chief Revenue Officers) and VPs of Sales need to double down on may vary depending on the stage of the company, the type of SaaS product, and the industry. However, there are some key metrics that are increasingly important to track when it comes to the year of driving productivity. You need to make sure that company is on the right track, more than ever. In this blog, we will discuss those key metrics and explain why they are important to track.

Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) is the total amount of subscription revenue that a SaaS company generates on a monthly basis. This metric is essential for any SaaS company because it represents the predictable revenue stream that the company can expect each month. CROs and VPs of Sales need to track MRR each quarter to ensure that the company is growing and meeting its revenue targets.

Tracking MRR can also help CROs and VPs of Sales identify which areas of the business are driving the most revenue. For example, if a certain product or sales channel is responsible for a significant portion of the MRR, the company can focus its resources on that area to continue driving growth.

Churn Rate

Churn rate is the rate at which customers cancel their subscriptions. This is an important metric for SaaS companies because it directly impacts revenue growth. CROs and VPs of Sales need to track churn rate each quarter to ensure that the company is retaining customers and minimizing revenue loss.

Tracking churn rate can also help CROs and VPs of Sales identify which areas of the business are experiencing the most churn. For example, if customers are churning at a higher rate from a certain product or sales channel, the company can investigate why and make improvements to reduce churn.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer. This includes marketing and sales expenses, as well as any other costs associated with acquiring new customers. CROs and VPs of Sales need to track CAC each quarter to ensure that the company is acquiring new customers efficiently and cost-effectively.

Tracking CAC can also help CROs and VPs of Sales identify which marketing and sales channels are driving the most cost-effective customer acquisition. For example, if a certain marketing channel is driving a lower CAC than others, the company can allocate more resources to that channel to drive more efficient customer acquisition.

Customer Lifetime Value (CLTV)

Customer Lifetime Value (CLTV) is the total amount of revenue that a customer is expected to generate over the lifetime of their subscription. This metric is important because it helps SaaS companies understand the long-term value of each customer and make decisions around customer acquisition and retention.

CROs and VPs of Sales need to track CLTV each quarter to ensure that the company is acquiring and retaining high-value customers. Tracking CLTV can also help CROs and VPs of Sales identify which customer segments are generating the most revenue and allocate resources accordingly.

Lead-to-Customer Conversion Rate

Lead-to-Customer Conversion Rate is the rate at which leads (potential customers) are converted into paying customers. This metric is important because it helps SaaS companies understand how effectively they are converting leads into revenue.

CROs and VPs of Sales need to track Lead-to-Customer Conversion Rate each quarter to ensure that the company is effectively converting leads into customers. Tracking this metric can also help CROs and VPs of Sales identify which sales channels and processes are most effective at converting leads into customers.

Sales Velocity

Sales Velocity is the measure of how quickly a SaaS company generates revenue from new customers. It is calculated by multiplying the number of new customers acquired in a quarter by the average deal size and the win rate and then dividing that by the length of the sales cycle. This metric is important because it helps SaaS companies understand how quickly they are generating revenue from new customers and how long it takes to close deals.

CROs and VPs of Sales need to track Sales Velocity each quarter to ensure that the company is generating revenue from new customers efficiently and effectively. Tracking this metric can also help CROs and VPs of Sales identify which sales channels and processes are most effective at generating revenue quickly.

Average Revenue per User (ARPU)

Average Revenue per User (ARPU) is the average amount of revenue that a SaaS company generates from each customer. This metric is important because it helps SaaS companies understand the value that each customer provides to the company and make decisions around pricing and customer acquisition.

CROs and VPs of Sales need to track ARPU each quarter to ensure that the company is generating enough revenue from each customer. Tracking this metric can also help CROs and VPs of Sales identify which customer segments are generating the most revenue and allocate resources accordingly.

Pipeline Coverage Ratio

Pipeline Coverage Ratio is the ratio of the total value of the sales pipeline to the revenue target for the quarter. This metric is important because it helps SaaS companies understand whether they have enough sales opportunities in their pipeline to meet their revenue targets.

CROs and VPs of Sales need to track Pipeline Coverage Ratio each quarter to ensure that the company has enough sales opportunities in the pipeline to meet revenue targets. Tracking this metric can also help CROs and VPs of Sales identify which areas of the business need more attention to generate more sales opportunities.

Sales Forecast Accuracy

Sales Forecast Accuracy is the measure of how accurate the sales team’s revenue forecasts are for the quarter. This metric is important because it helps SaaS companies understand how well the sales team is able to predict revenue and make decisions around resource allocation and goal setting.

CROs and VPs of Sales need to track Sales Forecast Accuracy each quarter to ensure that the sales team is accurately predicting revenue. Tracking this metric can also help CROs and VPs of Sales identify areas where the sales team needs additional training or support to improve their forecasting abilities.

In conclusion, tracking key metrics is critical for the success of any SaaS revenue team. CROs and VPs of Sales need to track metrics like MRR, churn rate, CAC, CLTV, lead-to-customer conversion rate, sales velocity, ARPU, pipeline coverage ratio, and sales forecast accuracy to ensure that the company is on track to meet its revenue goals and make data-driven decisions. By tracking these key metrics, SaaS companies can identify areas of the business that need attention and optimize their revenue generation efforts.

Want to know how SIA falls neatly into your organization? Get in touch!