🎙️ Hey there, SaaSpreneurs!🎙️

Welcome to the latest edition of the SaaS Metrics School newsletter! In this episode, our host Ben Murray dives into the intriguing topic of segmenting SaaS metrics. Are you wondering whether you should segment your metrics? 🤔

Join us as Ben shares his insights and strategies for effectively analyzing sales and marketing efficiency metrics. Discover when it's the right time to start segmenting, the key segments to consider, and the challenges that may arise when it comes to expense allocation. 📓

Tune in for this enlightening episode of SaaS Metrics School, where we explore the world of segmented and aggregate SaaS metrics. 💪

You can also listen to the episode here.

📓Key Concepts to Learn💡

1️⃣ Importance of Segmenting SaaS Metrics: Once you pass $10M ARR, it’s time to consider segmentation. Segmenting your sales and marketing efficiency metrics is a common practice. Match the right metrics with the appropriate stage of the business.

2️⃣ Stages of SaaS Metrics Journey: Right metrics for the right stage of the journey. I break up stages in our journey as: $0-1M ARR, $1-3M ARR, $3-10M ARR, and greater than $10M ARR. Metrics magic starts happening in the $3-10M ARR phase.

3️⃣ Common Segmentation Factors: It’s common to segment your metrics on product lines, ideal customer profile (ICP), SMB vs. Enterprise customers, and geographical location. It’s dangerous to your SaaS health to aggregate your metrics using many distinct customer profiles.

4️⃣ Challenges with Expense Segmentation: One of the difficulties in calculating segmented metrics is identifying detailed expenses for different segments. How we set up our department structure, COA structure, and coding methods play a role in achieving accurate expense segmentation. Otherwise, we are making generic allocations.

5️⃣ Financial Health and Aggregated Metrics: If you have distinct customer profiles (classic example: SMB vs Enterprise), you cannot combine this data! The blended data will mislead you!

By implementing segmented metrics, you can gain a deeper understanding of your business and make data-driven decisions that have a direct impact on your financial health. So, if you're ready to take your SaaS metrics to the next level, this episode is a must-listen!

If you found this episode helpful, make sure to tune in to future episodes of SaaS Metric School to broaden your knowledge of essential SaaS metrics and finance topics.

Got any burning questions or specific metrics you'd like us to cover?

Drop us a line, and we'll do our best to address them in upcoming episodes.

Until next time, keep hustling and measuring those metrics!

Best regards,

Ben Murray
Host of SaaS Metric School

📝 Episode Recap 🎧

In this episode of SaaS Metrics School, Ben discusses the importance of segmenting SaaS metrics, especially in sales and marketing efficiency. He breaks down the stages at which we should start considering segmentation, ranging from zero to 1 million ARR to above 10 million ARR.

Ben explains that aggregating metrics for different customer profiles can be dangerous and suggests considering segmentation based on product lines, ideal customer profiles, SMB versus Enterprise, and even geography.

He also highlights the challenge of identifying expenses by segments and emphasizes the need for good expense detail to make segmented metrics effective. Overall, Ben emphasizes the importance of considering segmented metrics as we progress in our SaaS metrics journey.