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SaaS Product Metrics

5/18/2019

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Core SaaS Company Metrics include:
  • Customer Acquisition Cost
  • Annual Recurring Revenue
  • Annual Contract Value (or Net New ARR)
  • Churn (attrition)
  • Cash Flow
https://blog.hubspot.com/service/saas-metrics
https://a16z.com/2015/08/21/16-metrics/
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from: https://www.forentrepreneurs.com/saas-metrics-2/

Tien Tzuo CEO of Zuora says that there are only three metrics that really matter for SaaS companies:
  • Retention Rate (how much ARR you keep every year)
  • Recurring Profit Margin (ARR - Churn - non-growth spend)
  • Growth Efficiency (how much does it cost you to acquire $1 of ACV)
http://www.slideshare.net/Zuora/zuora-always-on20123-saas-metrics-that-matter-12301579
https://www.socialmediatoday.com/content/3-key-metrics-matter-new-subscription-economy
​

Product Metrics:
As a product manager or product business owner you should choose from these core SaaS company metrics and a variety of other metrics to understand the performance of your product.  Track both the metrics themselves and the trends in your metrics such as:

​Marketing & Sales Performance (for different markets / segments)
  • Customer Acquisition Costs (including marketing lead analysis and sales funnel analysis)        
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​from: https://www.forentrepreneurs.com/saas-metrics-2/
  • Win Rate (and win/loss analysis)
  • Pipeline Activity (do you have enough pipeline to achieve revenue goals)
  • ACV (annual contract value or new booked revenue) & units (and therefore average selling price)
  • ARR (or annual recurring revenue) 
  • Market Penetration (% of total addressable market and/or % of total existing customers upsold) 
​
Customer Response
  • End-User Adoption and Usage Frequency
  • NPS (net promoter score) & other customer sentiment analysis
  • Customer Health or Success (often more detailed than sentiment analysis; products like Gainsight can help identify attrition risk and upsell opportunities) 
  • Customer Retention Costs
  • Attrition and Renewal Rates (gross and net)
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General Product Health
  • Main Value Proposition Metric:                                                                             Is your product achieving its described central benefit for your principal (or various) persona?  “Administrators can now save 50% more with our offering… End users can do this task 75% faster...”
  • Other Product Usage Analytics:                                                                             In-product analytics help you see if your product is behaving and creating value as expected. Product engagement tools such as Pendo, Google Analytics, or Adobe Analytics can facilitate this analysis. Often enterprise SaaS or transactional applications are trying to lower the amount of time a user spends to complete a task unlike consumer or engagement apps which are trying to increase the total time a user spends in an application. 
  • Overall Financial Analysis:                                                                                   This includes many of the metrics already mentioned and others such as Gross Margin, Customer Lifetime Value, and metrics which represent whatever other assumptions were made as part of the business case and pricing strategy.
  • Internal Team Metrics:                                                                                           Obviously a broad variety of metrics could be considered including team sentiment and key stakeholder metrics such as feature release quality for Dev Ops or story points for Agile teams.
  • Software Quality and Support:                                                                                Examples include open tickets (per customer), time to close (different priority support tickets) and open bugs. 

Further References:
  • https://www.pragmaticmarketing.com/resources/articles/15-product-management-metrics-you-should-know
  • https://280group.com/product-management-blog/25-metrics-matter-mobile-product-managers-2018/
  • https://www.gainsight.com/blog/calculate-6-key-customer-success-metrics/
  • https://productcoalition.com/critical-metrics-every-product-manager-must-track-c5f1e46e3423
  • https://medium.com/product-breakdown/product-management-analytics-what-metrics-should-you-be-measuring-241609b1950d
  • https://svpg.com/the-role-of-analytics
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Product Frameworks: Strategy & Execution

4/20/2019

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Previously I listed a few product management resources including 
  • Marty Cagan's book "Inspired" which I review here
  • A list of product mgt associations, consultants, blogs, and courses 
  • A few product management and business strategy books 

In those resources there are product frameworks that can help you consider what are the right activities at the right time during a product lifecycle. These include:

280Group's Optimal Product Process

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Brian Lawley and the 280 Group has some great PM training and resources.
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Pragmatic Marketing Product Management Triad
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(As previously mentioned, Pragmatic Institute is well known for its training.)

SirriusDecisions Product Marketing and Management Model
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Roman Pichler's Product Management Framework 
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(Recently I discussed some of these frameworks with a few colleagues including Kathleen Marzahl and Rick Xu). 

One theme often found in these frameworks and in other descriptions of product management is a delineation between technical (execution, internal facing) and strategic (external facing) activities.

Often in Agile methodologies there are:

Technical PMs (Internal Facing “Agile Product Owner”)
  • Lead daily stand-ups, get issues resolved that are in the way of developers making progress
  • Own product specifics (PRD, specific requirements) and backlogs
  • Work on dev/test/release process (or ultimately a DevOps culture with frequent releases) and bug log w/ Tech Lead
  • Consider the next minor release
 
Strategists (External Facing Agile Product Managers):
  • Understand market needs and competitors offerings
  • Talk with customers; work closely with Sales, Marketing, Services and Product Marketing
  • Position product and create roadmap
  • Own launches, pricing, beta programs, and product revenue
  • Consider next major release and next MRD

Here are a few additional resources that detail this distinction
ProductPlan Product Manager vs. Product Owner
Aha Product Manager vs. Product Owner
Agile Product Manager vs Product Owner at SmartSheet

Similarly Marty Cagan says establishing a strong product culture requires 
  • Innovation culture: compelling product visions, strong product managers, empowered business and customer savvy teams product teams often in discovery
  • Execution culture: urgency, high-integrity commitments, accountability, collaboration, results orientation, recognition, strong delivery management, frequent release cycles 
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Some More Product Management and Product Marketing Slides

8/2/2009

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I put a few more product management and product marketing slides from my Stanford Continuing Education class on my website: http://www.johngibbon.com/pm-slides.html

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Web 2.0 Marketing, a "Smarter Planet", and the Smart Grid

3/26/2009

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A few weeks ago I talked about Web 2.0 marketing in my class.  People are using tools such as blogs, podcasts, forums, and social media sites to better communicate with their customers.

For example at Elfster, we have a blog and a Facebook group.   During the class Aaron Burcell discussed his go-to-market plan for Smarty Card which included both traditional marketing and Web 2.0. (Check out The Wall Street Journal's article "The Secrets of Marketing in a Web 2.0 World" and "Adding Social Media to Marketing & PR" by Lee Odden).

Recently I ran across IBM's new "A Smarter Planet" blog. It is a good Web 2.0 attempt to show their involvement and thought leadership on topics such as the smart grid, smart transportation, etc.  They use a mix of text, audio, and video including this video which is lighthearted overview of the smart grid.  The format seems uncharacteristic of Big Blue and I am guessing that was deliberate. 

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Aaron Burcell Talks About Go-To-Market Planning

3/13/2009

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Aaron Burcell the VP Marketing from SmartyCard and veteran of many successful start-ups (WebTV, etc) talked about Go-To-Market planning at my class last night, great stuff.

Many good insights, but a few ideas that stuck out for me:

-spend 50% of your time listening to your customer (via customer support, beta programs, watching customers use your product, site analytics, etc.)

-being one-of-a-kind and quickly getting to market isn't everything

-really understand what your company is trying to achieve and what value it provides its customers before you can craft a go-to-market plan 

-with that identify launch goals and metrics

Aaron, Chris Carvalho, and the whole SmartyCard crew recently had a very successful launch: People's Choice Award at demo09 and WSJ http://tr.im/gZm6 and USA Today coverage http://tinyurl.com/cmmbjc



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