Connecting metrics, math & people - SaaS finance

  • April 18, 2017
  • by Pamela de Swardt

My plan was to share some wisdom around how to collect and analyze SaaS metrics. Luckily, I did a quick Google search before I started writing – turns out the internet is awash with fantastic articles by very smart people!

David Skok’s post SaaS Metrics 2.0 is like a holy book for many in the SaaS industry. It’s a comprehensive and insightful article that’s easy to read with neatly formatted spreadsheets (my pet peeve is when people don’t format numbers) and lots of pretty graphs. Aah heavenly!

Anyway, the point is that I don’t think I can add anything helpful about what to measure in a SaaS business.

What I would like to focus on instead is how, as the financial leader in a SaaS business, you can gain true buy-in from the leadership team when it comes to reporting and measuring.

How do you convince others to understand and appreciate the importance of a metric-driven approach to leadership? Slap some KPIs and KMIs down on paper, add some cash to it and voila?

Unfortunately not…

To succeed, you must first be able to reach people within their area of expertise and help them understand the importance of metrics for their department in the bigger business.

Overcome people’s metric misgivings

Each leader in your business is an expert in their particular area. It’s important to remember this and to be cognizant of the fact that you have a distinct “bigger picture” advantage because your area of expertize just happens to be the synergy of numbers across the business.

People feel intimidated because they are “not numbers people”. Large spreadsheets don’t help them feel better, and calculating metrics is just torturous.

Many people have a math phobia – they were “never any good at math at school”. This fear runs surprisingly deep, even after many years of achievement in their careers.

Some people say they “refuse to live in a world ruled by numbers”. They simply don’t want to co-operate.

As the financial leader in your business, you must have a heart for your internal customers in the same way that your sales and support teams have a heart for their customers.

Take the time to get to know each person. Take the time to build up trust. Take the time to find ways to explain why you need all these numbers - in their language. Get into the detail of how and why the calculations work as they do, and how any changes would affect them.

Each person is different so there is no formula for how to approach this or what to say. That said, I find the use of images to be very effective across all disciplines. Here’s an excellent infographic that might help.

Show kindness and consistency

It’s vital that we use metrics consistently each month and that each member is accountable for their own metrics. So yes, slapping those KPIs and KMIs down on paper is needed. But it can never be only that.

Trying to create change or instill a sense of consistency is tough. It pushes us out of our comfort zone of pretty numbers on spreadsheets (all nicely formatted), and into the realm of people, patience and kindness as we work to get the best out of others.

It’s a mindset that works in all spheres of our lives. Everyone who knows me will agree that I can be very blunt and to the point. But, as I learned during my time serving as treasurer on my sons’ school board some time ago, it is deeply humbling and immensely satisfying to see understanding begin to dawn in the eyes of “math phobes” when you take a bit of time to explain and talk to them. Not in a condescending manner, but in a “this is the whole – here is your part” kind of way. Matter of fact and down to earth. We are all in it together, after all.

I am reminded of my student years, when a good friend took the time to re-explain the concept of consolidations to me. Her kindness allowed me to take on this fantastic role in Qorus - a multi-national, multi-currency environment with a complex consolidation each month. I am forever grateful to her!

And now I am appreciating the writer in our marketing team who has kindly taken the time to edit this post so that it reads well in the Queen’s best English – lest I be judged in a field of expertise that is not my own!

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