{"id":3276,"date":"2023-07-12T11:57:56","date_gmt":"2023-07-12T01:57:56","guid":{"rendered":"https:\/\/www.sage.com\/en-au\/blog\/?p=3276"},"modified":"2024-01-10T01:28:33","modified_gmt":"2024-01-09T14:28:33","slug":"how-to-use-saas-kpis-to-survive-a-market-downturn","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-au\/blog\/how-to-use-saas-kpis-to-survive-a-market-downturn\/","title":{"rendered":"How to use SaaS KPIs to survive a market downturn"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-au\/blog\/category\/growth-customers\/\" class=\"entry-header__link\">Growth &amp; Customers<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tHow to use SaaS KPIs to survive a market downturn\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2023-07-12T11:57:56+10:00\">July 12, 2023<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"How to use SaaS KPIs to survive a market downturn\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-au\/blog\/how-to-use-saas-kpis-to-survive-a-market-downturn\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-au\/blog\/author\/david-appel\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2023\/10\/1665950775201-350x350.jpg\" class=\"entry-author__image\" alt=\"david-appel-headshot\" srcset=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2023\/10\/1665950775201-350x350.jpg 350w, https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2023\/10\/1665950775201.jpg 400w\" sizes=\"auto, (max-width: 40px) 100vw, 40px\" \/>\t\t\t\t<span class=\"entry-author__name\">David Appel<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p class=\"\">Most people are at least somewhat on edge about the economy at the moment, and SaaS companies are also seeing cause for concern. But if you can maintain your sense of focus and prioritise your key performance indicators (KPIs), you should be able to survive or even thrive during the market downturn.<\/p>\n\n\n\n<p class=\"\">SaaS KPIs matter tremendously for a range of different reasons:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>They give you a grip on reality: <\/strong>Operating with false confidence is one of the most dangerous patterns of behaviour you can adopt in business. That\u2019s doubly true when the market goes sour. During times like these, your SaaS KPIs offer vital clarity about what\u2019s working and what isn\u2019t.<\/li>\n\n\n\n<li><strong>Metrics prove your progress: <\/strong>Your SaaS KPIs can offer your whole team a psychological boost. After you\u2019ve set your departmental and company-wide goals around metrics, having concrete daily and weekly proof of your forward momentum can be gratifying.<\/li>\n\n\n\n<li><strong>Strong metrics impress investors: <\/strong>Generating venture and investment capital can significantly extend your financial runway in challenging markets. Having genuinely impressive SaaS KPIs will help sway investors in your favour.<\/li>\n<\/ul>\n\n\n\n<p class=\"\">During a market downturn, honing in on your SaaS KPIs can prove&nbsp; more valuable than ever. Here are a few of the most significant KPIs to remain mindful of in bear markets.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Watch your churn and engagement numbers like a hawk<\/h3>\n\n\n\n<p class=\"\">Your voluntary churn rate is often linked to the engagement level you\u2019re fostering in your customers. After all, if many people are engaging with you happily and regularly, your churn rates probably aren\u2019t that high.<\/p>\n\n\n\n<p class=\"\">You should also be mindful of involuntary churn, however. It\u2019s always important to stay on top of your payment processing. But when everyone\u2019s trying to stretch their cash to combat a market downturn, your customers might reconsider signing up for your services a second time once they\u2019ve been kicked off. You want to avoid that.<\/p>\n\n\n\n<p class=\"\">If your churn rate is climbing and engagement is falling, consider these strategies:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Offer discounted subscriptions: <\/strong>Who doesn\u2019t love a good deal, especially when inflation\u2019s taking off? You could tackle this in multiple ways: offering a bulk discount for purchasing numerous months, a user-based discount, or giving one free month to new signups.<\/li>\n\n\n\n<li><strong>Incentivise social sharing and posting:<\/strong> If you haven\u2019t been maximising your effectiveness on social media, there\u2019s no time like the present. Creating platform-exclusive content and then telling your customers about it is a great way to get more traffic to your accounts.<\/li>\n\n\n\n<li><strong>Consult your CMO: <\/strong>If your engagement is flagging, have a quick one-on-one with your company\u2019s CMO. Limiting the meeting to the two of you ensures that you both feel free to speak your minds about what\u2019s working and what might need fixing.<\/li>\n<\/ul>\n\n\n\n<p class=\"\">Next, let\u2019s turn our attention to the financial side of things.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Take it month by month<\/h3>\n\n\n\n<p class=\"\">In poor market conditions, you should narrow your time horizon and perspective. Watch your revenue month by month to carefully track and address any negative patterns that might be forming while also keeping an eye on your annual recurring revenue (ARR).<\/p>\n\n\n\n<p class=\"\">Your monthly recurring revenue (MRR) gives you a consistent way to check in with yourself and your team each month. If troubling developments are spotted, these can hopefully be addressed and turned around before they become serious problems.<\/p>\n\n\n\n<p class=\"\">Modern cloud accounting solutions for SaaS companies include a SaaS metrics dashboard and automate the MRR calculation with real-time data. Accounting solutions like Sage Intacct can help you focus and prioritise your SaaS KPIs.<\/p>\n\n\n\n<p class=\"\">Think of it like this: By consistently managing and improving your MRR, your ARR essentially takes care of itself. Your MRR serves as your compass to give you a sense of your direction throughout the year, and your ARR is the rewarding view you get after the journey. No surprises, no anxiety, just a serene sense of satisfaction in your accomplishments.<\/p>\n\n\n\n<p class=\"\">Accounting software can help you <a href=\"\/blog\/tips-to-improve-forecasting-your-saas-companys-monthly-recurring-revenue\" target=\"_blank\" rel=\"noopener\">forecast your MRR<\/a> with pinpoint accuracy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Improve your customer effort score<\/h3>\n\n\n\n<p class=\"\">Customer effort score (CES) is a scoring metric for how hard a customer has to work to get a question answered or a problem resolved. For instance, on a scale of 1 to 5, where 5 represents the maximum level of customer effort required, you\u2019d want to score a 1.<\/p>\n\n\n\n<p class=\"\">A SaaS company\u2019s CES becomes a big deal during a market downturn. Depending on their industry and services, many SaaS apps find themselves in the \u201cfirst to go\u201d category as consumers across the nation curtail their spending.<\/p>\n\n\n\n<p class=\"\">Making it simple and seamless for your customers to get help when they need it goes a long way. You should be asking yourself:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>If you\u2019ve done enough: <\/strong>What have you offered your customers in terms of self-service options, for instance? Have you built out a robust \u201cresource centre\u201d full of easy-to-read content? Maybe try an automated chatbot?<\/li>\n\n\n\n<li><strong>Where the weak links are: <\/strong>Customer service is often a chain of solutions rather than just a single one. An automated chatbot might try to help first. If it can\u2019t help, it refers the customer to the company\u2019s online resource centre. If that still doesn\u2019t work, the customer will probably call or email at that point. Ensure that your entire customer service chain operates smoothly and there aren\u2019t one or two links weakening the whole thing.<\/li>\n\n\n\n<li><strong>If the writing is on the wall: <\/strong>Often, customers will write reviews signalling their dissatisfaction if you fall short on your customer service obligations. You need to be proactive about listening to them and quickly making corrections where people have asked for them.<\/li>\n<\/ul>\n\n\n\n<p class=\"\">Work to optimise your CES. You\u2019ll give yourself an essential advantage over many of your competitors while everyone rides out the market downturn.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Summing Up<\/h3>\n\n\n\n<p class=\"\">We\u2019ve only scratched the surface of why predictive SaaS KPIs are vital during a market downturn. <a href=\"https:\/\/sage.com\/en-au\/sage-business-cloud\/intacct\/additional-financial-management-modules\/saas-intelligence\" target=\"_blank\" rel=\"noopener\">Discover<\/a> how you can create real-time SaaS metrics dashboards to drive key metrics such as ARR, NDR, Churn and Cash.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get a roundup of our best business advice in your inbox every month<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-20ec4af6-53dd-41ab-81ed-95d438e3bb90\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1064\" height=\"810\" src=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2019\/01\/GettyImages-626184462-1064x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2019\/01\/GettyImages-626184462-1064x810.jpg 1064w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Most people are at least somewhat on edge about the economy at the moment, and SaaS companies are also seeing cause for concern. But if you can maintain your sense of focus and prioritise your key performance indicators (KPIs), you should be able to survive or even thrive during the market downturn. SaaS KPIs matter [&hellip;]<\/p>\n","protected":false},"author":1433,"featured_media":2532,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[72,73,75],"tags":[208,137,138,246,207],"business_type":[9],"context":[],"industry":[],"persona":[110,101,102],"imagine_tag":[],"coauthors":[301],"class_list":["post-3276","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-growth-customers","category-money-matters","category-strategy-legal-operations","tag-accounting-tips","tag-business-intelligence","tag-business-management","tag-how-to-grow-your-business","tag-technology","business_type-medium-sized-business"],"sage_meta":{"region":"en-au","author_name":"David Appel","featured_image":"https:\/\/www.sage.com\/en-au\/blog\/wp-content\/uploads\/sites\/5\/2022\/04\/GettyImages-1057253610.jpg","imagine_tags":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Australia","distributor_original_site_url":"https:\/\/www.sage.com\/en-au\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/posts\/3276","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/users\/1433"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/comments?post=3276"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/posts\/3276\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/media\/2532"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/media?parent=3276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/categories?post=3276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/tags?post=3276"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/business_type?post=3276"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/context?post=3276"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/industry?post=3276"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/persona?post=3276"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/imagine_tag?post=3276"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/coauthors?post=3276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}