The SaaS market is crowded as ever. A surefire way to unlock sustainable growth and stay ahead of the competition is by tracking the right metrics for your lead generation efforts.
Data can give you deeper visibility into every aspect of your lead-gen process and indicate the need to optimize your tactics. But sourcing, managing, and analyzing many data points can be overwhelming.
You’re confused about the top metrics to track for your SaaS business and how to get started. That’s why we’ve curated the 12 most important lead generation metrics every SaaS company should track in 2023.
12 Lead Generation Metrics Every SaaS Company Should Track
Here are the 12 most important lead generation metrics you should consider tracking for a data-driven strategy:
1. Marketing Qualified Leads (MQLs)
Marketing-qualified leads are prospects who show interest in your business by interacting with your marketing campaigns, like ads, blogs, podcasts, social media posts, etc. Instead of tracking just the number of MQLs, it’s important to set a target for the number of MQLs required to meet your revenue goals.
This target will help you track the completion rate for your MQLs, comparing the actual and estimated leads generated through marketing campaigns. You can use this metric to analyze the effectiveness of your marketing strategy and make improvements.
How to calculate the actual-target MQLs ratio
Number of actual MQLs / Number of target MQLs x 100
2. Product Qualified Lead (PQL)
Product-qualified leads are those who have used your product to some extent and have a likelihood of converting into paying customers in the future. PQLs are a core metric for companies following a product-led growth motion. The number of leads generated through your product’s free or trial version shows the tool’s effectiveness.
How to calculate PQLs
There’s no straight formula for calculating PQLs. Here are some examples of PQL definitions:
For Slack, a PQL is when an account reaches its 2,000 message limit, for Facebook a PQL is once someone adds 7 friends.
You can also track PQLs to understand in-app user behavior, identify friction points, and improve your product. Use these insights to give prospects something more exciting in their trial and accelerate your lead generation process.
3. Sales Qualified Leads (SQL)
Sales-qualified leads include prospects qualified by your sales team. Qualifying leads against your ICP can streamline lead generation efforts since your reps won’t waste time chasing bad leads.
Tracking SQLs can reveal your sales team’s efficiency and pinpoint bottlenecks hampering their performance. You can also use this metric to map your progress and optimize your sales strategy for maximizing conversions.
4. Meetings booked and attended
Another key metric for SaaS companies is the number of meetings booked and attended by prospects. It shows the effectiveness of your sales team and highlights the top-performing reps with the highest number of calls. At the same time, you can identify reps that need improvement.
Another way to track meetings is by categorizing the metric into different parameters, like location, industry, company size, social media channel, and more. This will help you narrow down your most promising ICP.
5. Cost Per Lead (CPL)
Cost per lead is the average cost you incur for generating a single lead. Tracking CPL gives you a sense of how much you spend on bringing potential customers. It’ll also help you calculate the ROI compared to the average revenue these customers generate. You can use these insights to allocate your customer acquisition budget.
CPL can also be a good metric for performance evaluation for your marketing and sales teams. The lower the cost of getting new leads, the better.
As CPL can vary for top, middle, and bottom-of-the-funnel leads, I highly suggest aligning on a standard framework between the sales and marketing departments If you determine precisely what a lead costs in the respective funnel phase, you can easily determine the average value. This helps manage the budget and vetting new vendors.
To track CPL, use a lead generation tool and calculate the cost of marketing and sales campaigns for generating new leads.
How to calculate CPL
Total Cost of Marketing Campaign / Number of Leads Generated
6. Conversion Rates
The sales conversion rate measures the percentage of leads successfully turning into paying customers. You can also track the conversion rate for other parameters, like sign-ups, app downloads, form responses, and more.
Your conversion rate shows how effectively you’re able to convert prospects into customers. When combined with metrics like MQLs, PQLs, and SQLs, your conversion rate can help you identify which channels drive the highest conversions.
For instance, conversions from your LinkedIn prospecting efforts will come under MQLs, while those from your product’s free trial will come under PQLs.
How to calculate conversion rate
To calculate your conversion rate, you can use this formula:
Number of Leads That Convert to Paying Customers / Total Number of Leads x 100
7. Average Time-to-Sell
The average time-to-sell metric determines the average time it takes to convert a lead into a paying client. It tells you the efficiency of your sales funnel, measuring how long you typically take to find, pitch, and convert prospects. Tracking this metric helps identify roadblocks in your sales process and optimize it for seamless conversions.
You can calculate the average time-to-sell for different channels to get granular insights about your funnel. For instance, if you’re using email for outreach, you can track how long it takes to build an email list, pitch and follow up with prospects, and convert them so that you can get an appointment scheduling
How to calculate average time-to-sell
Total Time to Convert Leads / Number of Converted Leads
8. Sales touchpoints to convert
The number of sales touchpoints needed for conversion calculates the average number of interactions between your sales rep and a prospect before they convert. A sales touchpoint can be anything—from a cold email or social media activity to ads, webinars, lead capture forms, and other channels. This directly impacts your average time-to-sell ratio.
Besides, the more touchpoints you need to add to the sales process, the longer will be your sales cycle and the higher your customer acquisition costs. So, you can use this metric to improve your lead nurturing tactics to accelerate conversions.
9. Customer Acquisition Cost (CAC)
Customer acquisition costs are the average expenses you make to acquire one customer. This metric tells you the cost-efficiency of your lead generation and acquisition strategy. It also helps you properly allocate your sales and marketing resources to get solid returns.
More importantly, your CAC presents the scalability of your business and answers the question: will your SaaS company remain profitable if you scale operations and bring more customers? If the CAC is higher than the customer lifetime value (more on this shortly), you might not be able to grow sustainably.
What’s more, SaaS companies often rely on their acquisition costs to determine the price points for a new service. CAC offers a good benchmark to arrive at your new pricing.
How to calculate CAC
Total Cost of Sales and Marketing Efforts / Number of Customers Acquired
10. Average Deal Size
The average deal size represents the average value of the deals closed in a given duration. Tracking this metric helps in forecasting your business’s revenue potential. You can also use this data to evaluate your sales performance by comparing the actual average deal size to the expected average deal size.
Besides, this metric also guides your pricing decisions. You get clarity on what customers are willing to pay for your product and how you should price it to match their expectations.
How to calculate average deal size
Total Value of Deals Closed / Number of Deals Closed
11. ARR Goal Completion
Average recurring revenue (ARR) measures your company’s predictable recurring revenue through retainer contracts and subscriptions. You can calculate ARR for any duration—monthly, quarterly, or annually.
ARR Goal Completion measures the degree to which your company achieved the ARR goal. Think of it as the success rate for your ARR targets. This gives you a realistic estimation of your revenue performance and reveals any gaps or opportunities to boost your bottom line.
You can also use the ARR Goal Completion rate to demonstrate your growth trajectory to stakeholders and build confidence in your ability to create a predictable revenue pipeline.
How to calculate ARR goal completion
(Actual ARR Achieved / Target ARR) x 100%
12. CAC: LTV Ratio
CAC: LTV is the ratio of your acquisition costs (expenses) and lifetime value (earnings). This metric shows your business’s profitability since it compares your expenses on acquiring new customers to the revenue you generate from these customers.
Tracking this ratio also clarifies if your growth strategies are sustainable. For instance, if you spend too much on converting clients but not getting enough returns and receiving poor customer reviews, you’ll run into losses instead of earning profits.
This metric also indicates your financial health and growth potential. A good balance of CAC and LTV tells investors that your company is a safe option to bet on.
How to calculate CAC: LTV
Customer Acquisition Cost / Lifetime Value of a Customer
How to leverage your lead generation metrics with ClicData
Now that we’ve covered the 12 most actionable metrics for SaaS, let’s answer the bigger question: how do you track and manage all this data?
Monitoring so many metrics can easily become chaotic if you don’t have the right tools to strategically use this data.
But with ClicData’s powerful data management and analytics platform, you can derive meaningful insights from your metrics and improve decision-making. You can connect the tool with your CRM software and 250+ data sources to collect and analyze crucial metrics.
ClicData can also visualize your data points to simplify analysis and help you use these reports for strategic decision-making. Check out ClicData and try it yourself!
Maximize Your Lead Generation Success With These Metrics
You must leverage data to boost your lead generation process and win better ROI. Closely monitoring the lead generation metrics we discussed in this article will help you find opportunities for improvements in your sales funnel.
You can also work with a marketing coach to use these metrics effectively. They’ll make sense of the data to guide your lead-gen efforts.
About the author
Eduard Klein is an International Digital Growth Marketer, Blogger, and Entrepreneur with a global mindset. He is the founder of RocketGrowth and guides through the process of starting and growing a digital business, and riding the wave of digital technology and marketing without getting swept away.