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Streamlined Angles on Turbulent Technologies

Joel York

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Top Stories by Joel York

As a SaaS business matures, the importance and value of SaaS metrics increase. Most SaaS businesses begin their journey down the SaaS metrics path by tracking recurring revenue in relation to customer acquisition costs. After building a solid customer base, churn becomes a priority. These fundamental SaaS metrics are all apparent in the standard SaaS profit equation below. SaaS profit = current customers x ( avg recurring revenue – avg recurring cost ) – new customers x avg acquisition cost However, it quickly becomes apparent that fighting churn requires a SaaS metrics toolkit that digs significantly deeper than simple financial metrics. Operational metrics are needed that connect day-to-day business reality to financial performance. It is this realization that gives birth to the new Metrics-driven SaaS Business as it discovers the goldmine of SaaS customer success... (more)

The Promise of SaaS Customer Success Metrics

Over the past few years, the SaaS community has gained a solid understanding of SaaS financial metrics, as well as many of the operational principles required to achieve them. However, there has always been an obvious gap between what happens on the top line and what happens on the ground. It’s one thing to claim that a 50% reduction in churn will result in a 2X increase in recurring revenue, but it’s quite another thing to make it happen. Achieving that 50% reduction in churn is usually a tedious and unreliable process of trial and error. This is about to change. As the SaaS ind... (more)

The SaaS Metrics Maturity Model

Tweet Me! Becoming a Metrics-driven SaaS Business is no easy task. It takes time, commitment and plenty of customers. However, the financial rewards of moving beyond standard SaaS financial metrics to SaaS customer success metrics and ultimately to sophisticated predictive analytics are significant. Each step toward SaaS metrics greatness builds upon the last. The stages of development can be classified into a natural progression of increasing SaaS business understanding from financial stability to operational measurability to revenue predictability outlined at the very beginning... (more)

The Metrics-driven SaaS Business

Tweet Me! My first serious lesson in the criticality of SaaS metrics was about six years ago when I was unexpectedly stumped in a board of directors meeting. I had just presented the booking plan for the year and one of the Director’s in the meeting said that the plan was good, but we really needed to increase our booking rate. My first reaction was something like: “Well our current booking rate is pretty strong and we’re a SaaS business, so even with no immediate improvement to bookings we’ll continue to pile up revenue quarter after quarter, right?” Wrong! I had totally neglect... (more)

Bluenose Enables the Metrics-driven SaaS Business

Tweet Me! We are witnessing a dramatic change in the way SaaS businesses are managed. While SaaS financial metrics, such as recurring revenue, acquisition cost, service cost, churn, growth and lifetime value have dramatically increased our understanding of the economics of SaaS businesses, they have proven inadequate for managing them. As useful as they may be, SaaS financial metrics look at the past, not the future. They can tell you that you have a problem with churn, but they cannot tell you what you should do about it. Motivated by the need to better understand churn, many Sa... (more)