Offering software as a service (SAAS) is a proven way to boost revenues and deliver a better product to customers. As a business model that differs drastically from the traditional, shrink-wrapped approach, SAAS can take some getting used to.

Fortunately, there are some highly effective ways to make sure that any SAAS offering will perform well in practice. Companies like Rebar Technology are dedicated to making it easy to focus on the SAAS Subscription Software Metrics that are most revealing.

Succeeding With SAAS Takes Plenty of Information and Analysis

Selling a license to use a software package used to be the default way to monetize the difficult work of development. Beginning decades ago, many companies began shifting from perpetual licensing schemes to defined terms that afforded them more chances to close sales.

SAAS is the next stage of this important evolutionary process, but it involves a larger leap than those before it. Traditional means of measuring and analyzing sales results do not work as well, by default, with SAAS.

All that it takes to bridge the gap, however, is to add more information to the equation. Focusing on the right metrics and types of analysis can turn SAAS into a boon for just about any software company.

Four Metrics That Matter the Most

Luckily for software companies interested in SAAS, subscription-based software generates customer- and revenue-related data quite naturally. Simply selecting the right subscription software management platform to use will provide easy access to key metrics like:

•Customer acquisition cost. It is relatively rare for even the hottest SAAS products to see much in the way of cost-free uptake. However much a company pays, on average, to acquire each customer will always have a definite impact on the bottom line. Well-designed recurring billing software will make it easier to define and stay on top of customer acquisition costs. Using the same tool effectively can even make it simple to lower this inevitably important figure.

•Customer lifetime value. One of the most attractive features of the SAAS model is that satisfied customers tend to keep paying, month after month. A subscription software management platform can even provide reliable, useful estimates of customer lifetime value (CLV) as that figure varies over time. This will help a product team figure out ways to boost CLV that also produce increased customer satisfaction. Such results can even turn a middling SAAS product into an overwhelming success.

•Monthly and annual recurring revenue. Basic financial metrics like monthly recurring revenue (MRR) and the annual equivalent (ARR) are often used to judge the progress of growth-stage SAAS companies. Choosing a highly capable recurring billing software platform will make it easy to pin down these figures.

Proven Ways to Become More Successful With SAAS
While it will always take a great deal of hard work to realize the financial potential in a SAAS product, staying on top of metrics like those above can help a great deal. Far from being difficult to measure or even estimate, such figures can be provided almost automatically by the same tools that are used to manage software subscriptions. Choosing the right subscription billing platform can therefore end up being just as important as all the effort it takes to create a SAAS product customers will love.

Author's Bio: 

Rebar Technology has years of experience in subscription software management, technology integration services, payment consulting, and managed IT services. We are a group of the payment and consumer experience experts with a long history in innovation and developing technology solutions for tomorrow’s challenges. Our teams are based in Chicago and Nashville and support companies across the globe in developing a seamless subscription and payment experience.