To understand how well your SaaS marketing agency is performing, you need to decide what your return on investment looks like.
Possibly, it’s simple: you may just want sales. However, if you’re looking to increase brand awareness, then you may need to consider other ways to measure how successful your partnership with your agency is.
Understanding your definition of success can help you measure your satisfaction with your marketing agency.
Define Clear Goals
The first step to being able to measure your return on investment with your marketing agency is for you to agree on clear goals with them. These goals should align with your business objectives. For instance, if an increase in ARR is your main goal, then you should set MQLs or % of MQLs to SQLs as your main KPI with your agency.
Setting clear, agreed-upon goals enables you to measure your agency's success and ROI easily. If you’re unsatisfied with your partnership, having shared goals makes it easy to judge whether it’s meeting your expectations.
Some common goals for SaaS marketing agencies are:
- Driving qualified leads (MQLs): Most SaaS companies want a certain number of marketing qualified leads to fill their sales funnel.
- Conversion rates (MQLs-SQLs): If you know your past conversion rates, you can use them as a basis to calculate how many MQLs you need to meet your sales goals. The higher the conversion rate, the better qualified your leads are.
- Monthly revenue (MRR): It is important to understand how much MRR you need to reach your annual revenue goals, and your agency can help you meet that KPI.
- Traffic: Traffic to your website is a more top-of-the-funnel goal, but tracking it can be useful to understand your ranking and brand awareness. You should split website traffic to understand the source.
Use Clear Metrics
Whatever goals you choose to focus on, it’s important to have clear definitions and consistently measure metrics. You should have a shared report that your team can check for their performance based on agreed-upon metrics.
Key metrics to measure SaaS marketing ROI:
- Customer Acquisition Cost (CAC): Calculate the total customer acquisition cost.
- Lifetime Value (LTV): Project the revenue generated by a customer over their lifespan.
- LTV:CAC Ratio: Aim for a healthy balance, such as 3:1, to ensure sustainable growth.
- MRR/ARR Growth: Assess how marketing contributes to recurring revenue.
- Conversion rates across the funnel (lead-to-customer, trial-to-paid, etc.).
Track Leads Effectively
You need to correctly track leads to attribute them and understand if your agency contributes to your lead count. Lead tracking also helps you understand the most promising sources and how many sales you need to reach out to.
You can track leads using CRM systems like HubSpot or Salesforce or analytics tools like Google Analytics.
You can use different attribution models to track lead sources:
- First-touch: This model attributes the source to the first marketing touchpoint. For example, if the lead found a blog post via Google and then downloaded a lead magnet, their source would be Organic Search (Google). It’s good to assess how well your marketing channels are working and for brand awareness.
- Last-touch: With a last-touch attribution model, the lead’s source is the last place they interacted with you. For instance, if your lead first finds you via Google and then converts on a paid media advert on LinkedIn, paid media (LinkedIn) will be their source.
- Multi-touch attribution: Using a multi-touch attribution model is the best to gain a complete view of your buyer journey. This is ideal if you have a long or complicated sales cycle. However, you need extremely accurate data and clear sources to track it effectively. There are three ways of doing multi-touch attribution:
- Time decay: This model prioritizes touchpoints closer to the final conversion. It deprioritizes more top-of-the-funnel touchpoints.
- Linear distribution: Each touchpoint is given equal importance. The downside to this model is that it doesn’t reflect which channels are more successful.
- U-shaped: The first and last touchpoints are given more value than the others. If your customers often need more than two touchpoints, this model doesn’t reflect them accurately.
- W-shaped: This model is similar to the previous one, but it evenly attributes the first, middle, and last touchpoints. It can be a good model for B2B companies with a long sales cycle but will show no more than three touchpoints.
Factor in Qualitative Impact
As well as measuring clear, quantitative metrics, your SaaS marketing agency will also be working on harder-to-quantify benefits. These can include improved brand perception and authority in the SaaS space, stronger customer trust and loyalty, and better competitive positioning and long-term benefits.
These aspects of qualitative impact can greatly improve your company’s sales, brand, and trust. While they can be difficult to measure and only noticed in the longer term, they are important to consider.
Leverage Tools and Reporting
You need the correct tools to create reports to collect the data we've mentioned above.
Classic marketing tools include CRMs, especially HubSpot, which provides incredible reports in one place. It reports on your sales pipeline, website traffic, and email analysis. Google Analytics 4 is the best tool for the most accurate website analysis.
Your agency will probably also use SEMrush to manage SEO and rankings. They can also use HotJar to see how people interact with your websites. Finally, a social media tool such as SproutSocial can be useful (HubSpot also has a similar feature).
Having regular, clear reporting and dashboards that the agency and your team analyze together can ensure everyone is on the same page and understands progress. It can also help you identify trends and measure progress.
Adjust and Optimize
Continuously measuring return on investment enables you to make informed, data-driven decisions. For instance, if you see in a weekly report that a campaign isn’t performing well for the 2nd week in a row, you could adjust or cancel it. Otherwise, if one campaign is performing very well, you could pause underperforming campaigns to increase the budget of the successful one.
Constantly adjusting, improving, and measuring your marketing effort is key in SaaS.
Measuring the Success of Your Saas Marketing Agency
When beginning to work with a SaaS marketing agency, consider what return on investment looks like for you. Then, define clear goals and track them using shared metrics in reports made using marketing analytics tools. Finally, use that data to continuously improve your efforts and guide your marketing agency’s work.
To discover how a data-driven B2B SaaS marketing agency can help deliver strong ROI, contact Kalungi to learn more about our approach and proven playbook.
