Totango 2nd Annual SaaS Survey Finds SaaS Executives Are Shifting Business Focus

Report reveals great dissatisfaction with common business metrics; customer-centric measurements sets the new standard

PALO ALTO, Calif.--(BUSINESS WIRE)--Totango today published its 2nd annual SaaS Metrics Report which shows that 68 percent of SaaS executives are unsatisfied with their existing business metrics and the tools and methodologies used to gather them (up from 61 percent last year). A greater number of executives, however, showed interest in measurement and metrics, with overall metrics adoption increasing by 20 percent, over 2011.

“The SaaS market’s rapid maturation has taken the focus away from inward business metrics to external, customer-centric measurements that indicate happy, engaged customers.”

"The power of revenue has shifted from the business to the User. SaaS companies need to rethink their approach to measuring a healthy business. It’s no longer about looking at the top of the sales funnel, it’s about looking at the User’s interaction with your business and products in real-time," said Guy Nirpaz, co-founder and CEO at Totango. "The SaaS market’s rapid maturation has taken the focus away from inward business metrics to external, customer-centric measurements that indicate happy, engaged customers.”

57 percent of executives interviewed understood the need for deeper customer-centric metrics to guide the future of their businesses, with the top future metrics being Product Usage Analysis, Churn, Customer Lifetime Value, Upsell and Net Promoter Score. Additionally, 71 percent indicated that they have moved their conversion measurement further down the funnel from Unique Website Visitors and Trial Signups to Free to Paid Conversion Rates. Surprisingly, only 50 percent of executives were measuring customer churn, despite its importance to recurring revenue streams.

"Measuring product usage helps SaaS companies provide the best possible customer experience. Unlike the old world of enterprise software, the best marketing, sales and customer support cannot make up for a bad product trial or on-going user frustration. E-commerce, gaming and other consumer-focused web businesses have known this for a while, and the B2B world is now catching up fast,” said Sam Boonin, VP Product Engagement, Zendesk.

SaaS executives have good reason to change their measurement focus to customer-centric metrics like Revenue Per User, Product Usage Analysis, and Churn that show true User health. A recent Aberdeen study found that companies with robust customer analytics see 58 percent greater customer retention, 18.5 percent more growth of customer lifetime value, and a 19 percent increase in customer satisfaction.

To download the report and infographic, visit: http://blog.totango.com/2012/09/saas-metrics-2012.

About Totango

Totango provides a Customer Engagement Management solution that allows online service providers and software companies to maximize customer revenues and lifetime value. Totango’s closed-loop platform helps customer-facing teams take the right action with the right customer in real time in order to increase conversions, reduce churn, dramatically improve product and service quality and increase marketing and sales efficiency. Learn more at http://www.totango.com.