Tracking the right metrics can help Subscription Billing Organisations achieve greater success and growth, with the key being knowing which metrics to measure throughout each stage of growth. In this post we’re looking at the metrics that matter most, and why Sage Intacct, Sage’s leading cloud accounting software is rated the top Subscription Billing Software…

Why Metrics Matter

As the SaaS industry enjoys rapid growth, there is increasing importance on measuring performance effectively – but it can prove challenging and time consuming to do this well using various systems and spreadsheets!

In this unique sector, the various stages of business growth determine where best to focus your attention as you acquire customers, expand your product offerings and increase revenue – here are the typical stages of growth and what to measure most during each one:

Stage 1 - The Start Up

On entering the market, you’re focused on building brand awareness and gaining customers. Your aim is to build a customer base as you develop and hone your product or service offerings to suit customer needs while you gain traction in the market.

Key Metrics for the StartUp Phase

Customer Acquisition Cost (CAC) – this is the cost of spending to acquire new customers including advertising, marketing and sales activities. Researching the market and utilising the most cost-effective strategies, such as social media platforms, will help steer CAC spending in the right direction and to build engagement with your prospective and growing customer base.
Monthly Recurring Revenue (MRR) is an essential metric showing the monthly revenue obtained from subscriptions. Focusing on this during the initial phase provides insights into the company’s growth and stability while also helping to evaluate your pricing structure and forecast future revenue streams.

Rated the Number One Subscription Billing Software, Sage Intacct users can keep their fingers on the pulse with on-demand customisable reporting accessible via any internet connected device.

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Stage 2 - The Growth Phase

You’ve established a customer base and are seeing steady revenue growth, with your focus now turning towards scaling the business, improving operations and expanding product or service offerings to maximise revenue and profits.

Key Metrics for the Growth Phase

A crucial metric to measure during the Growth Phase and shows the total amount of revenue a customer generates over the entire life of their relationship with a company. Building good customer relationships through customer service, communication and product or service development can all positively influence a longer customer lifecycle, as they’ll be more likely to continue their membership or subscription when happy with the service level.

The Churn rate is the percentage of customers who have cancelled their subscriptions over a set time period. A key measurement during the growth phase, this is an indication of how well your product or service offerings are meeting customer expectations and demands. For example, a high churn rate indicates a need to evaluate why excess numbers of customers are cancelling, and how you can improve retention by improving service levels and product enhancements.

Sage Intacct enables customers to streamline and automate even the most complex subscription billing scenarios, helping them deliver better customer service and manage their cash flow effectively. Discover how in our video overview here.

Stage 3 - Maturity and IPO

Once you’ve acquired a well-established position in the market, a stable customer base and predictable revenue streams, the focus becomes improving operations and efficiency, enhancing the product offering and continuing to acquire and retain customers.

At this stage, once the required level of revenue and profitability has been reached, a subscription-based business often considers going public via an initial public offering (IPO), which offers the public the chance to invest in shares of the company stock and own a piece of the business.

At this point, greater insights to the future are needed to encourage investment, with metrics including deferred revenue, earnings before interest, overall company expenses and year-over-year customer growth increasing in importance.

Improving efficiency, forecasting and analysis becomes simple with Sage Intacct, with users having a complete view of their financials in one easy to use system and enhanced technology that supports faster, smarter decision making.

The Intacct Impacct with Acuity Solutions

We’re a leading Sage Partner with decades of experience helping customers overcome their accounting challenges in a variety of industries.

We offer fixed price implementations on ALL projects, so customers always know what they’ll be paying (even if implementation runs over schedule).

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