Once an expense has been submitted it’s not usually given a second thought except “I wonder when I’ll get paid back.” In reality, expense data directly correlates with the success of your company and the all important SaaS metrics that drive your strategy.
Traditional SaaS metrics include reports like monthly (or annually) recurring revenue, churn, customer acquisition cost, average revenue per customer, and lifetime customer value. Financial data is a large part of all of these reports, but expenses and customer spend are often just lumped in and not used to their full potential. By attributing your expenses directly to prospects, customers, projects, etc., these reports will start to paint a detailed picture of how your spend really affects your bottom line.
Standard SaaS Metric: Customer Lifetime Value
Supercharged: Customer ROI (LTV compared to Individual Customer Spend)
Understand the lifetime value of each of your customers compared to what you’ve spent over their lifetime to determine the ROI of each customer. This will become an important metric for customer success teams.
Standard SaaS Metric: Customer Acquisition Cost
Supercharged: Customer Spend as a Percentage of CAC
You know in total what it costs to acquire a customer, but how much are you spending directly on a prospect to acquire them? Is there a way to optimize this process to decrease your acquisition costs?
Standard SaaS Metric: Sales Pipeline
Supercharged: Sales Pipeline compared to Customer Spend
Compare the amount of pipeline your sales team is generating to the amount that they are expensing. Are they spending more than they are bringing in? Are they bringing in fewer customers but larger deals? You can learn how your time and expense budget should be allocated to generate the best sales results.
Standard SaaS Metric: Monthly Recurring Revenue
Supercharged: MRR compared to Monthly Total Customer Spend
Learn the impact of your overall monthly customer spend. Are there noticeable trends between spend and MRR? How does spend impact your MRR?
Standard SaaS Metric: Monthly Recurring Revenue Cohort
Supercharged: Customer Spend Cohort
Understand your customer spend over time. Are you spending more or less over time? Are there certain times of the year that your spend increases? This can help you plan your cash flow and create a better customer success strategy.
How to Get the Data You Need
In order to run these metrics, you’ll need to have a system in place to track and tag your expenses. You’ll also need to be able to analyze expenses individually and not in report form.
Companies that use Abacus have the ability to build custom tags to attribute each expense to a specific prospect, customer, project, event, etc. This allows them to analyze their spend in any form and supercharge their metrics.
Yieldbot, a real time customer intent platform, has created a workflow in Abacus to track their sales team’s travel and expense budget per client so that they can compare:
- a sales associate’s spend per total revenue they’ve generated
- spend per client versus revenue generated per client
- a sales team’s spend as a percentage of the total sales travel and entertainment budget
Interested in supercharging your SaaS metrics with your expense data? Try Abacus free for 30 days.