Community & Measuring SaaS Goals
If you’ve spent any time in a SaaS company – geez, it’s almost been 10 years for me – you learn quickly there are three main goals at the top of mind for the executive team:
Demand – Increased booking/revenue
NRR – Net Revenue Retention
Reduced Cost to Serve
It’s amazing how many conversations I’ve had with senior leaders that will end up in one of these three buckets. However, it can be daunting when you need to tackle to align your community with them – especially if you are newer to the community game.
So let’s dive in…
How Does Community Play in Approaching Each Goal?
Demand – Increased booking/revenue
This is likely the most common goal. It’s about leads – pure and simple. It’s about MQLs/SQLs (Marketing/Sales Qualified Leads). Of course, you can’t boldly go into a community and say, ‘Hey, we need y’all to fill in some form.’ That’s just not how it works.
The thing you can control though, is content. Facilitating content creation for marketing teams and making sure your best and brightest members have a space to write amazing content is where you step in. All the excellent content you create translates into SEO (Search Engine Optimization) – whereby your content ranks high in Google search results leading to more eyeballs on your community. However, it’s also about shareable content: creating content that starts conversations in other channels.
Some of the pieces of content could include: community-driven ebooks for top tips, spotlight interviews from behind-the-scenes, or doing a question series with experts. It’s about regular and scheduled content.
If a public community is not possible, the focus obviously won’t be new sales but on cross-sell and upsell to the customers who already have access to the community. In this case, there are three goals you aim to achieve:
Showcase the value of what they bought – via great content (more on that in the next section)
Make them aware of potential cross-sells
Make them aware of possible upsells
This means showcasing to your current community of customers the product they have – and what other products they could buy or upgrade to achieve more. How does one do this? By inviting customers already using the product to share their experiences and creating content showcasing how it’s used.
Some of you have the first part down – but you may be asking – how do I measure any of this? This is the essential point: aligning community with SaaS goals.
We live in a digital world, and your company has many touchpoints. You want to ensure your community is included in that tracking. Suppose your company has a marketing automation tool, like HubSpot or Marketo, or a CRM like Salesforce. In that case, you want to make sure your tool captures their community activity, so you can show the influence on deals.
Who are the prospects who found your company via the community?
Who are the prospects who bought/upgraded because of the community?
What was the content read/consumed from the community that helped with a sale?
This is not an exhaustive list – but you should be asking these questions and hopefully getting access to this data to prove your value.
Even if you are not using huge/expensive tools or have little access, Google Analytics has attribute reports, where you can find where your community had an impact in deals. You can confidently account for a % of people who bought product who had community as part of their purchase journey.
The data analytics nerds in your company will be happy to help you if you direct them with the above requests. We all know your community has an impact on organizational goals. Now, you need to make sure you measure and prove it!
NRR – Net Revenue Retention
Net Revenue Retention is a buzzy term related essentially to keeping your customers happy and not churning (i.e. cancelling). To be a bit more technical, Net Revenue Retention is shown as the percentage of recurring revenue retained from existing customers, including expansion revenue, downgrades, and cancels. The closer to 100% or above – the better.
To simplify it further for you, it’s truly a measure of two things – perceived value and happiness with outcomes. If your members feel the product/service is valuable and are happy, they are less likely to churn. This means they are more loyal. The more dedicated and satisfied they are, the more likely they are to advocate on your behalf – or in the simplest terms, recommend you.
The goal of the community builder does not change – it’s to create a great space, to connect community people together, and make sure they see value as quickly as possible. This can be from content programming to events to networking and everything else you know how to do. If you’re looking for ideas, check out this ebook, going too in-depth is outside the scope of this post.
I want to focus on what to measure to prove the impact of what you’re doing. What you want to measure is advocacy activity. How many cases studies are you able to gather from community members? How many G2 crowd reviews can you connect? How are people scoring you on a Customer Effort Score (CES) or NPS (Net Promoter Score) survey?
I’ve written about CES before and how to do it – and its correlative aspects to NPS. The main thing to know about NPS is that the higher the score, the more likely they will be to recommend your business. And thus less likely to churn. Having good NPS scores from your community members can help reduce churn.
How do you go about it though? As I detail in the linked article above, you never want to use an NPS score based only on the community. It can be skewed. So what’s a community builder to do?
You want to work with your Customer Success organization or whoever runs the overall NPS for your company. You want to overlay customer activity in the community and their membership in said community. The goal will measure data showing that the more active people are in the community, the more likely they will recommend your brand. Every time I have seen this done, the community usually comes out ahead. If not, you hopefully get some guidance from their comments on what you can do better.
If your organization is not doing NPS measurement, check out the article linked above about CES. See how you can use that to show the value of what you build. Suppose a community is helping reduce the effort of your customers. It’s a bright light in keeping them using your product – and you need to tell this story with data.
Reduce Cost to Serve
This is a classic metric for support communities. It’s about reducing customer frustration when it comes to using your product. However, from the executive standpoint, it’s about lowering support costs via ticket deflection or the ever more direct idea of customer avoidance. The goal is that the community acts as level 1 support to solve the most common questions so your support team can focus on the more complex issues.
Essentially, the human to human support is a very costly channel. Community support is a much more cost-effective solution by far. It allows companies to scale support without significantly increasing headcount.
As before, I am not going too deep into how to create a support community – it’s way beyond the scope of this post. I want to focus on how to measure and share what you do in the community so you look like the community-building rockstar you are.
There are a couple of ways deflection can be looked at. One is the idea of the self-service ratio, where you look at the total number of active users you have in your community and divide by the total number of users submitting a ticket.
For example, if you had 1000 members in your community and 100 tickets, the ratio would be 10:1. In other words, for every 10 members active in the community, only 1 submitted a ticket. You can measure this over time as a benchmark and show how the ratio improves.
However, we want to get you a step further – and more numeric. We want you to be able to tell your management about the savings – because we all know money talks. Here is the breakdown to get there.
Find out the costs of a call or a ticket – non-community contact. Your support leader should know it.
What are the number of sessions people coming to your support section/categories? Use Google Analytics or something similar to measure.
Create a survey to ask people on exit. You can use Qualtrics, Hotjar, Alchemer. It should have at least these three questions:
Did you come to the community today to find a solution to an issue you were having?
(If yes) Did you find information on the community that led you to a solution
(If yes) Did your visit avoid the necessity to contact our team?
This will give you the percentage of people who found a solution that did not need to take another step. This will leave you the number of sessions deflected.
Multiply the number of sessions that were deflected by the cost of calling support.
So as an example. A call to your non-community support is $50. In a month, there are 5000 sessions to your support category. Your survey results show that 10% of people found the answer without contacting support. Therefore, you had 500 sessions that got their answer on the community at $50 a pop. This means that this month you saved your company $25,000.
Formula in action:
5000 sessions to your community in a month
10% of respondents reported deflection
500 deflected sessions @ 50$ (ticket cost)
The savings are not 100% there, though, as there is a cost to your community. So, you will want to take this number and then subtract your community budget cost (tools + people) and then divide by budget to get to your ROI.
“Support Savings” – Community Budget
This will give you an ROI number you can be proud of and continue to show off.
Being a Rockstar
I know that most community people are extroverts in their community – but genuine introverts in other aspects of their career. However, I want to ensure the company sees your and your community’s value. Only you can step up and share these wins – no one will do it for you.
It’s not enough to say you don’t measure cause you hate math, or it doesn’t matter because no one asks. You are doing great things to advance your company – they need to know. It will also help you: Showcasing the impact you’re making is the path to more support and resources for you to do more. I hope this article inspires you to take that step!