Which business metrics does your company track? Many businesses pay detailed attention to the performance statistics surrounding individual marketing campaigns but fail to consider the broad measures indicative of overall success. By minimizing efforts to analyze and understand key metrics not directly linked to marketing efforts, such as customer ascension and retention, companies limit their potential for success.
This week we interviewed Jonathan Cronstedt, president of Kajabi. Kajabi is a platform for building, marketing, and selling your own online knowledge products.
According to Jonathan Cronstedt, companies can break free from their reliance on specific but not necessarily generalizable metrics and experience greater business success by shifting to a more comprehensive business model, known as SaaS. Jonathan describes SaaS as a unique language connecting companies to their customers.
The Pirate Metrics
Your business may not be using all of the right metrics, but that doesn’t mean you aren’t already on the right track. There is some overlap between traditional business strategy and the SaaS business model, but when following SaaS, your company may need to consider a greater volume and variety of metrics. In SaaS business strategy, there are four primary metrics:
These factors have been humorously nicknamed the “pirate metrics” because their acronym (AAAR) spells out a common pirate expression. Despite an amusing title, the pirate metrics are a serious tool that allows businesses to better evaluate company performance at various levels. They can even reveal intricate patterns in customer behavior. Jonathan breaks down each of these factors, demonstrating how much information businesses can gain by studying SaaS metrics.
Most businesses are fairly preoccupied with customer acquisition. Many companies monitor data to learn which sources are the most successful in providing traffic to their company site and which digital marketing campaigns receive the highest engagement levels. SaaS acquisition metrics can be used to better understand how and from where people are channeled to your site. These metrics can guide business decisions regarding how and where to advertise, as well as provide some information about target audiences.
Customer acquisition can come from a variety of sources, including organic content marketing, posting in online community platforms, paid traffic, and more. In Jonathan’s experience with SaaS marketing, there is no single superior acquisition method. But, in his years of SaaS strategy work, Jonathan has noticed the pattern that, on average, warm outreach efforts are more successful than cold outreach. This shows the clear benefit of relationship-building in business strategy.
Getting site views might not make you rich, but convincing visitors to become paying customers might. The activation phase of the SaaS strategy is all about encouraging your site visitors to embark on a journey with your company. SaaS metrics may clarify what factors are most influential in pushing consumers to opt-in to services or agree to buy a product.
At Kajabi, Jonathan and the team offer site visitors a free 14-day trial. This period allows users to get familiar with the platform and reach out to customer service with any questions before committing to a payment plan. For Kajabi, activation occurs once a user’s 14-day trial has run out and they have agreed to opt-in to the paid service.
If you want a customer to become loyal, you may want to consider how your business can increase the product or service value to customers over time. Some businesses offer tiers of services to cater to a breadth of budgets and needs, and doing so also creates an opportunity for customers to upgrade and change their experience over time as they see fit. SaaS metrics for ascension may reveal new ways for your business to structure products and services to provide more value for customers and turn a higher profit.
Jonathan shares how Kajabi organizes ascension unique from other businesses. While many platforms offer packages of their services in which certain features are accessible only with more expensive plans, the Kajabi platform allows all customers to use the same tools and features. Instead, Kajabi structures its pricing mechanism to directly correlate with a business’ success and size.
Another grouping of essential SaaS metrics focus on customer retention data. Ultimately, these metrics show whether or not your company provides the product or service promised. This includes metrics that may be useful in narrowing down the reason for leaving, inactive, or delinquent customers. These metrics may point out some of your company’s key shortcomings and provide you the opportunity to improve on them quickly and effectively.
Proudly, Jonathan shares how Kajabi manages to provide 24-7 online support to all platform users, even those operating on a 14-day free trial. Why is this worth bragging about? Because, as Jonathan explains, customer service may make a difference in whether or not your customers stick around for the long-run. If someone gets frustrated with a new service early on and doesn’t have the proper resources to move past a sticking point, you may lose out on their business in the future.
Kajabi grew out of the idea that you shouldn’t need to be a tech expert to create a successful business online. Today, Jonathan and his team work to help businesses of all sizes analyze and optimize their business strategies. With a balance between powerful capability and a user-friendly interface, Kajabi makes SaaS easy for anyone.
- The SaaS business model aims to provide businesses with valuable insights that are often unaddressed in other business models
- Four valuable metrics central to SaaS business strategy that are applicable to any industry are 1. Acquisition, 2. Activation, 3. Ascension, and, 4. Retention
- Be willing to adjust company orientation based on what you learn from SaaS metrics
- Do not over-complicate your business journey
- Do not be afraid to start small and grow over time
- Businesses succeed when their services and products strike a healthy balance between power and usability
MORE FROM JONATHAN
Kajabi – A platform for building, marketing, and selling your own online knowledge products.