SaaS Conversion Tracking - Guide to Measure Sales in 2024

The SaaS conversion funnel is like a map for understanding SaaS business performance. 

It helps them understand and improve their marketing strategies to grow their product. 

This article talks about what the SaaS conversion funnel is, how it's different from regular funnels, and how to make it work better for your business. 

We'll also look at the steps in the funnel and how to see if it's working well.

What is a conversion funnel?

The SaaS conversion funnel is how you guide your target audience from first hearing about your product to becoming paying customers. 

It shows the different steps they take, like learning about your product, trying it out, and then deciding to buy it. 

The funnel has four parts: 

• Awareness - Introducing potential customers to your brand or product.
• Interest - Capturing the interest of potential customers and encouraging interaction with your brand or product.
• Desire - Encouraging potential customers to explore your offerings in more detail and consider their suitability.
• Action - Converting potential customers into paying customers or subscribers.

Why is the SaaS Conversion Funnel Important?

The customer acquisition process is the most expensive part of running a SaaS business. 

So that’s where the importance of the SaaS conversion funnel comes in.

It helps you with:

• Structured Selling Process - Provides a clear path for selling your SaaS product from brand awareness to post-purchase engagement.
• Building Trust and Confidence - Requires nurturing leads with engagement and expertise to ensure they trust your product before making a commitment.
• Identifying and Addressing Drop-offs - Helps pinpoint where prospects abandon the journey and provides insights for improving conversion rates.
• Importance of User Experience (UX) Design - Recognizes the role of seamless interactions in guiding prospects through the funnel and driving conversions.
• Business Control Over Customer Journey - Emphasizes strategic decisions that influence how customers move through the funnel, highlighting the business's control over the process.

How to calculate the SaaS conversion rate?

You can use a simple formula to calculate any type of conversion rate: 

Conversion Rate = (Conversions/Total number of opportunities)*100%

For example, let's say your website had 20,000 visitors in the last month and 1,000 signed up for a free trial.

So, the formula would be:

(1000/20,000) * 100% = 10%.

Therefore, your trial user conversion rate is 10%.

Metrics to track at different stages of the SaaS conversion funnel

How can you tell if your funnel is working well? 

Look at some SaaS growth metrics within the sales funnel that show how well each stage of your funnel is doing.

1. Awareness Stage:

• Website Traffic: The number of visitors to your website.

2. Engagement Stage:

• Click-Through Rate (CTR): The percentage of people who click on a link or ad after seeing it.
• Time on Page: The average amount of time visitors spend on your website or landing page.
• Email Open Rate: The percentage of subscribers who open your emails.

3. Desire Stage:

• Page Views: The number of times your sign-up pages on your website are viewed.
• Demo Requests: The number of requests for product demonstrations or trials.
• Content Downloads: The number of times that your content, such as e-books or whitepapers, is downloaded.

4. Conversion Stage:

• Conversion Rate: The percentage of visitors who complete a desired action, such as signing up for a free trial or making a purchase.
• Customer Acquisition Cost (CAC): The cost associated with acquiring a new customer.
• Lifetime Value (LTV): The total revenue a customer is expected to generate over their entire relationship with your business.

How to Track Your SaaS Funnel in 3 Effective Steps

The SaaS sales funnel has four stages, guiding customers through their decision-making journey until they become paying customers.

Example: Imagine you run a project management SaaS platform. 

The structure of your sales funnel is as follows:

• Lead magnets: These are your ads and campaigns bringing potential customers to your landing page. For instance, running targeted Facebook ads offering a free trial of your project management tool.
• Landing page: It's crucial to address customers' pain points quickly here. For instance, if your platform helps streamline project collaboration, your landing page should highlight this feature prominently.
• Upsell pages: After customers sign up for a free trial, they might be directed to upsell pages where they can upgrade their plan or add extra features.
• Checkout page: This is where customers complete their transactions, so ensuring a smooth payment process is essential.

Monitoring page metrics helps identify where customers might get stuck in the funnel, allowing you to make necessary improvements.

So now that we’ve covered each of the elements that should be tracked let’s go through the steps to cover in this process.

1. Know What to Offer Based on the Funnel Stage

1. Top of the funnel(TOFU)

Remember, the TOFU area is best utilized to build interest. 

Here, the potential customer is researching a specific problem, and you need to convince them to trust your resources.

At the top of the funnel, your goal is to convince a prospect that you have the solution to their problem. 

This might include creating specific blog topics, explainer videos, or animations addressing the problem. 

You can also offer free how-to manuals in exchange for an email address. 

At this stage, it is good to show potential customers how your product works through demos on your website, but do not sound too salesy in the content. 

Ahrefs’ free keyword research tool is a great example of how they use the “free-tools” page to attract qualified leads.

Having a demo on your website, or even a free trial version of your tool, can be a great practice in attracting users to try your product, just as Ahrefs does.

2. Middle of the funnel(MOFU)

The content in the middle of the funnel is significantly different. 

It can build on everything you’ve presented in the TOFU area. However, now it’s appropriate to get into more detail. 

Potential customers are now open to thorough information, so you can introduce full presentations and app demos with maximum impact.

For example, case studies enhance the level of detail but only reference these in passing as to reinforce credibility. 

Assume your customer researching your competitors. 

A good practice of attracting conversions is by creating alternative pages, just as Brevo does, for example:

Case studies enhance the level of detail but only reference these in passing as to reinforce credibility. 

This is an information-gathering stage, which your visitors may be doing for another individual or organization. 

3. Bottom of the funnel(BOFU)

The bottom of the sales funnel is where the closing action takes place. 

The customer is sold on making the purchase by this time, so make sure it’s easy to complete the sale. 

Details on pricing, customer reviews, testimonials, and comparison tables should be clear to facilitate a final decision. 

Comparison-based pages are a great example of this kind of content, with the comparison tables included:

They make it easier for qualified leads to compare two specific products and make the best decision.

To convert users using those pages, make sure to place a strong call to action, or CTA, for maximum impact.

2. Utilize the monitoring tools

To use the proper monitoring tools to track what happens on your website, you should select a tool such as Google Analytics, or any other that fits your needs and works well with your website.

Monitoring tools like Google Analytics can be used to see where users spend time and what content helps them convert.

Set up goals and conversion actions to measure user actions like button clicks or form fills. 

How to do that?

Step 1. Install the tracking code: Add the code provided by the platform to your website's pages where you want to track conversions.

Navigate to your Google Analytics> Admin > Data Streams > Click on your stream and copy the measurement ID.

Step 2. Set your conversions: Configure the platform to recognize specific actions as conversions, such as reaching a confirmation page after signing up.

Once you set the conversion events, you can also create the Google Analytics or Looker Studio report to track your whole funnel based on your chosen preferences.

You can also keep track of your existing customers' value with metrics like average conversion rate and customer lifetime value.

3. Test and Improve

Once you’ve finished creating your SaaS conversion funnel, let it run and track the progress.

Here are the two crucial steps you should incorporate:

1. Test and check your connection: Make sure you’re accurately tracking conversions by testing it on your website.

2. Analyze and improve: Use the data from tracking to find areas for improvement and refine your marketing strategies.

Keep adjusting your tracking setup to ensure accurate data collection and improve your marketing effectiveness over time.

Conclusion

Profitable SaaS companies know a good conversion funnel is crucial, and it can speed up sales and set up your business for growth. 

Need help with measuring your funnel performance and optimizing the organic search conversions?

Book a free call today to see how Omnius can help you track and improve your organic funnel!