5 KPIs for Scaling SaaS Businesses

In order to grow predictably a business needs KPIs for scaling.

For SaaS businesses, one of the most significant milestones they reach is when they’re ready to scale. By this point, it means that your Software-as-a-Service (SaaS) has worked out its first problems. Your company has a fair amount of user feedback. And all you’re missing is a big marketing push to bring in more new users. 

That said, businesses rarely scale linearly. So to make sure that your SaaS remains profitable while growing, here are 5 scale-helping KPIs you should keep track of. 

1. Average Support Ticket Time

One of the main aspects of every SaaS that is the hardest to scale is customer support. Even if there are several technological aids, it will still ultimately rely on a human element. And getting everything in order from a human resource perspective always takes some time. 

For this reason, keeping an eye on your support time ticket is an excellent way to make sure that your customers aren’t being impacted negatively while you are growing. Here are three suggestions for you to help keep your support time under control:

• Automated responses: These are some of the preferred options for SaaS nowadays. They do a great job of helping you filter which customers will need personalized attention and which ones you can help with your content. 

• FAQs: These are expected by your users since most sites feature them. So make sure you update them frequently to reflect the most recent customer feedback. 

• Knowledge Base: If your SaaS is more complex, then having a robust knowledge base will be a worthwhile investment. 

2. Return on Ad Spend (ROAS)

If your marketing strategy relies on investing in ads, then you absolutely must track your ROAS. That’s because as you scale up your ad spend, it is almost certain that it won’t scale linearly. Said differently, if you 2x your ad spend, you won’t necessarily 2x the number of customers you onboard. By tracking your ROAS, you can make sure that your ad spends profitably throughout the entire growth process. 

• Cut off unprofitable ads: As mentioned earlier, ads do not scale linearly, so by having a well-defined ROAS goal, you can make sure that you only focus on the campaigns that give you the result that you need. 

• Scale up successful ad strategies: Sometimes, just increasing your ad spend on a campaign won’t get you the desired results. So it may be necessary to replicate an entire ad strategy. So if you keep track of your ROAS per strategy, you can better determine how well it’s working. 

• Better cost control: Knowing how much profit each customer represents is critical to every SaaS business. Tracking your ROAS will give you a better view of how much each customer means. 

3. Number of lead interactions

Making your client acquisition process more efficient will let you improve your profitability across the board. And one of the easiest ways to gauge your marketing and sales team’s efficiency is by keeping track of the number of interactions each customer needs before closing. 

Here are the two main aspects of your pipeline you need to address to start improving it. 

Map out your current pipeline and identify bottlenecks

The first step is to know precisely what your channel looks like and the impact that each step makes on your customer. Likewise, knowing where the blockages in the process are located can help you make breakthroughs. 

Decrease the time to sale

A great way to improve your profitability is to decrease how long it takes to get to the sale point. This will be case-dependent, but you’ll automatically improve your growth rate if you can improve on time. 

4. Positive Cash Flow (KPIs for scaling need an eye on cash)

Having a healthy cash flow is one of the best indicators of a business’s health. For this reason, making sure that you always have a positive cash flow should remain a priority during your scaling process. Here are two reasons why you should keep track of your cash flow. 

• It means you are likely not in danger of running out of cash: Having cash on the balance sheet is every CEO’s priority #1.  If you’re producing positive cash flow you’re likely headed in the right direction.
• It shows to investors you can acquire new users: If your business relies on investors, showing them that you can produce positive cash flow could increase their confidence in their investment..

5. Runway

For SaaS businesses that rely on raising funds from investors, your runway is critical to your sustainability as a business. So it makes absolute sense to look at this KPI periodically and make sure it’s being tracked accurately. Here are three reasons why tracking your runway is a must. 

• It measures how much time you have left: Whether it’s to become profitable or get another round of funding, runway lets you know how much time you have left to operate. 
• It lets potential investors know the state of your business: How you show up to investors will determine in large part how successful you’ll be in gaining their trust. Looking for funding with enough runway left lets your investors know that you have solid planning and executing skills. 
• It gives you an idea of how quickly you can scale: Your runway will determine the rate at which you can scale since it can be a proxy for how much flexibility your budget can withstand. 

Focus on Your KPIs for scaling with a SaaS financial expert

Scaling your SaaS is a challenge in itself, but if you’ve reached this point, it’s a clear indicator that you’re making the right business decisions. 

Keeping track of these KPIs undoubtedly helps you streamline your decision-making process by keeping analysis paralysis at bay. 

If you’re ready to work with a financial partner to help you with these metrics and refine your financial strategy, click here to schedule a free consultation.