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64 SaaS Metrics that every Marketer & Founder Should Know

Every SaaS business has some of the most difficult questions like how profitable our customers are? Or how much can we readjust our customer acquisition strategy? The answers to these come from SaaS metrics.

Most of the SaaS businesses understand the importance of metrics, but the biggest challenge, and mistake in most cases, is tracking the important metrics. This can make the situation worse, if they overlook the right KPIs for their businesses.

Their obsession with tracking the performance is understandable and to help them understand which metrics are important for them, here is an ultimate SaaS metrics list which gives the right idea about all SaaS metrics.

With this knowledge, your biggest challenge can become your ladder for growth, because that is how important it is to track the right metrics for SaaS growth.

 

SaaS Metrics

You will find four categories below, in which the associated metrics are listed and briefly described. To make things easier and more effective for you, there is a downloadable cheat-sheet available which will help you calculate some of the most important metrics for your business in a matter of seconds.

Now, let’s get started with our SaaS metrics list!

 

Marketing Metrics

 

1 – Unique website visitors

Unique website visitors are those who visit your website for the first time in a particular duration (usually a month). It helps in knowing the user type and their purpose of visiting your website. They can vary from people who visited your site out of curiosity to those who are ready to buy from you.

2 –  Email subscribers

Those visitors who sign up on your site to get your blog updates, newsletters or just to be a part of your mailing list are your email subscribers. They do not show interest in your SaaS product or intention to buy yet, but they like your content and wish to receive updates about it which is why they are not leads.

3 – Leads

Those visitors who fill out their details, which are more than just an email address, to download a free resource are leads. They willingly fill out their details to get the resource you are offering, which makes them qualified to be a lead.

4 – Marketing Qualified Lead (MQL)

The leads that show interest in your solution by viewing and/or engaging with some product focused web pages on your site and they fit to the demographics of a customer are the Marketing Qualified Leads.

5 – Sales qualified lead (SQL)

Those leads that meet the criteria to be an MQL and demonstrate sales intent by requesting demo or live sales call or conversation are known as the Sales Qualified Leads.

6 – Opportunities

Those SQLs which have been transferred to the sales team to initiate the sales process are the opportunities.

7 – Paying Customers

All the leads who dish out their money to get your product and commit to it for any certain period of time are your paying customers. Although it is more of a sales metric, but t can help SaaS marketers know about how many MQLs have been converted into paying customers.

8 – Free Trial and Demo Requests

Not all SaaS products are premium only. There are many products which offer free trials to engage the potential buyers aka leads.

Those users who avail the free trials are commonly counted as the MQLs because they do not show any intent to buy your product yet and free trial demands a very low level of commitment.

Similarly, some SaaS products are very complex to setup and require customization before use. So for such products live demos are offered.

9 – Conversion Rate

The rate at which a visitor converts into a lead and/or a lead converts into a customer is called conversion rate. While acquiring new visitors is a priority to gain more customers, but improving conversion rates can also help the business to gain more customers at a low cost.

10 – Visitor to Lead

It is the rate at which a visitor converts into a lead. Using pop-ups, landing pages, email subscriptions etc. are great ways to convert visitors into identifiable leads. It can be calculated in the following way.

Visitor to Lead conversion rate = Number of Leads/Number of Visitors

11 – Lead to Customer

It s the rate at which your leads are converting into paying customers. It helps in the analysig the quality of the leads which is being generated. It can be calculated using the following formula.

Lead to Customer conversion rate = Number of Customers/Number of Leads

12 – MQL to SQL

It is the rate at which your MQLs are converting into SQLs. It also gives great insights about the lead quality and the performance. It can be calculated as follows:

MQL to SQL conversion rate = Number of SQLs/Number of MQLs

13 – Free Trial to Paid Customer

It is the rate at which the free trail users convert into paying customers. The optimization of this can return good amount of revenue to the business. It can be calculated using the following formula:

Free trial to Paid Customers conversion rate = Number of customers/Number of free trials

14 – Marketing Spend: Average/Annual Contract Value

It is the ratio of your marketing expenditure to the Annual Contract Value (explained in the Sales metrics). It helps in finding the ratio to the marketing spending with the sales revenue generated.

Marketing Spend:Annual Contract Value

15 – Month-On-Month MQL Growth Rate

It is the growth rate at which the MQLs are growing each month. It can be calculated in the following way.

Month-on-Month MQL Growth Rate = {(MQLs of This Month – MQLs of Last Month)/ MQLs of Last Month} * 100

16 – Month-On-Month SQL Growth Rate

It is the growth rate at which the SQLs are growing each month. It can be calculated in the following way.

Month-on-Month MQL Growth Rate = {(SQLs of This Month – SQLs of Last Month)/ SQLs of Last Month} * 100

17 – ROI per Marketing Program

It has been commonly seen that many marketing programs initially provide more leads at the minimum cost and eventually stat to provide low amount of lead at a high amount of money invested in them. SO, it is good idea to keep an eye on the ROI (Return on Investment) of each Marketing program.

18 – Customer Type

It is the categorization of customers who share similar attributes. Having different customer types is a good idea as it helps in knowing the most profitable customer type for your business, so you can target such customers in your marketing programs.

19 – Inbound Qualified Lead Velocity

The inbound qualified lead velocity is the rate at which your inbound leads are growing every month. It is the key to measure the organic growth in the acquisition of qualified leads for your business.

20 – Customer Engagement Score

This score can help you measuring the level of engagement that your customers have with your product and/or service. The customer engagement scale is different for every business and they should have one.

It can be created by knowing the answers to questions like how many times a customer is logging in everyday? Are they using the service on the daily basis? What are they using it for? Which features are they using more than others? etc.

21 – Qualified Marketing Traffic

The tracking of those users who are not your customers but who are the returning users is your qualified marketing traffic. Focusing on this group can help you get more leads.

 

Sales Metrics

 

1 – Annual Contract Value (ACV)

The ACV gives you the value of customer’s contract over a period of a year. Here’s an example to understand it. Suppose a customer pays $50000 for a 2 years contract. Now this will generate $2083.33 Monthly Recurring Revenue (MRR discussed in Growth Metrics) and the ACV of this would be $25000.

2 – Total Contract Value (TCV)

TVC is the total value of customer’s contract. If we continue our previous example than the TVC of that customer is $50000.

3 – Average Revenue Per Account (ARPA)

ARPA helps knowing the revenue generated on per unit basis. It is actually the amount of revenue that is being generated by an “average” customer or account, a month. You can calculate by:

ARPA = MRR/Number of Active Accounts

4 – Average Selling Price (ASP)

The Average Selling Price or ASP tells you the average initial price which is paid by the customer at the time of a sales conversion. It is calculated in the following way.

ASP = Total Deal Revenue/Number of all deals

5 – Customer Acquisition Cost (CAC)

CAC or Customer Acquisition Cost is the amount which is required to acquire a single new customer for your business. It gives the idea of spend to get new customers for the business. Usually the cost of marketing and sales combined is considered the total cost on acquiring new customers. It is always calculated for specific time duration.

CAC = Cost of Sales and Marketing/New Customers

6 – CAC Payback Period or Months to recover CAC

If the acquisition cost of a customer is less than the revenue he/she has generated, only then it is profitable for the business. So, it is important to know the time period in which a customer generates enough revenue that surpasses the acquisition of cost. This is called the CAC Payback Period or Months to recover CAC. It is calculated as follows:

CAC Payback Period = CAC/MRR per customer

7 – Gross Margin Adjusted Payback Period

This gives a more accurate CAC payback period as it also takes the COGs into account. It is calculated in the following way.

Gross Margin Adjusted CAC Payback Period = CAC/(MRR per customer *Gross Margin)

8 – Customer Lifetime Value (CLTV)

The Customer Lifetime Value aka CLTV (or simply CLV) is the amount of revenue that a customer has contributed in their overall lifetime of subscription. This gives the true to value f the user and his or her contribution of in the overall revenue.

LTV = ARPA/Customer Churn Rate

9 – LTV:CAC

The ratio of LTV to CAC is crucial in knowing the correlation between the cost you are bearing to acquire a customer and the returns a single customer is giving to your SaaS business.

10 – Win Rate

The win rate provides the simpler look at the efficiency of your sales team. It is usually calculated by seeing the total deals won in contrast with total deals (won and lost both).

11 – Revenue Per Lead

This helps in forecasting or estimating the revenue that your leads are likely to contribute. It is calculated using the following formula.

Revenue per Lead = ACV/Number of Leads

12 – Lead Velocity Rate

In the simplest terms, it is the rate at which your leads are growing on a per month basis. The formula to find lead velocity rate is:

Lead Velocity Rate = {(Qualified Leads This Month – Qualified Leads Last Month) Qualified Leads Last Month}*100

 

Customer Success Metrics

 

1 – Daily Active Users (DAU)

This customer success metrics simply tells the total number of active users at on a single day. Although it is a sufficient metric to see the total active users, however, it does not tell anything about how engaged those customers are.

It is possible that not all the customers have logged in to use the service and some may are active to contact support or delete their data.

2 – Monthly Active Users (MAU)

Similar to DAU, MAU gives you the total number of active users in a month.

3 – Net Promoter Score (NPS)

It is a tool that helps businesses to know the percentage of customers who are your promoters. It utilized the referral scale usually asking one simple question which almost everyone has seen i.e. “how likely are you to recommend (SaaS product) to a colleague or a friend?” followed by a satisfaction scale.

The percentage of Detractors is then subtracted from the percentage of promoters which gives you the NPS.

4 – Customer Satisfaction Score (CSAT)

The customer satisfaction score also utilizes the survey method by asking a simple question i.e. “how would you rate your overall satisfaction with our service?” followed by a scale from 1 to 5. This is followed by averaging out the responses to see the CSAT.

CSAT = (Sum of Customer Responses/5*Number of respondents) * 100

5 – Upsell & Cross-sell Rate

Upsell rate is the calculation of knowing the percentage of the revenue that is generated in a particular period by upselling.

Upsell Rate = ACV of Upsells/Total ACV

Same is the case with cross-sell rate.

Cross-sell Rate = ACV of Cross-sells/Total ACV

6 – Viral Coefficient

Viral coefficient tells the growth of your customer base that has taken place by successful customers’ referrals. It gives you the number of new users that your existing user is referring to your business.

Viral Coefficient = (Number of Users*Average number of referrals*Referral Conversion Rate)/Number of Users

7 – Referral Revenue

It is the total revenue that is generated by successful referrals in specific time period. Customer referral is a great way of growth and it does not require a lot of cost. So measuring the referral revenue helps understand the value referrals are adding to your business.

8 – Referral Return on Investment (ROI)

It is the advanced measurement of referral revenue, in which you compare the mount that is spent on customer referrals with the total revenue that is generated by those referrals over the customer lifetime.

Referral ROI = (LTV-Referral Incentive)/Referral Incentive

9 – Viral Referral ROI

Adding the Viral Coefficient in the equation can help improve your referral ROI. Using the following equation where the average at which existing user generate new users by referrals is added, you can find the Viral Referral ROI.

Viral Referral ROI = ((LTV*(1+Viral Coefficient))-Referral Incentive)/Referral Incentive

 

Growth Metrics

 

1 – Monthly Recurring Revenue (MRR)

MRR is the sum of recurring revenue that is generated by customers in any specific month. It helps in knowing the monthly revenue growth of your SaaS business. It is simply calculated by seeing the recurring amount made by customers in a month.

2 – Annual Recurring Revenue (ARR)

The annual recurring revenue is calculated by multiplying the MRR by 12. It gives the total recurring revenue that is generated in a whole year by the customers.

3 – Committed Monthly Recurring Revenue (CMRR)

CMRR is the forecasting of MRR where you take any guaranteed revenue expansion and/or any anticipated churn into account. Here’s how you can calculate your CMRR:

CMRR = MRR + Guaranteed Expansion MRR – Anticipated Churn

4 – New MRR

New MRR is the revenue generated by new customers in the month.

5 – Expansion MRR

Expansion MRR is the revenue that is generated in the month by existing customers’ renewals or expanded subscriptions.

6 – Churned MRR

Churned MRR is the amount that is not added in the revenue of the business because of cancellations and churn.

7 – Contraction MRR

The amount that is lost due to the downgrade or scale back by customers in their current subscriptions in a month.

8 – Reactivation MRR

The amount that is generated from those customers who have returned after canclling their plan in the past.

9 – Customer Churn Rate

Customer churn rate is the rate at which your existing customers are cancelling your service. It is essential for business growth to reduce the churn rate, in addition to new customer acquisition.

Customer Churn Rate = Churned Customers/Total Customers at the beginning

10 – Revenue Churn

Revenue churn rate aka MRR churn rate is the churn of revenue that is caused by the cancellation or downgrades by existing customers.

Revenue Churn Rate = (Last Months MRR – This Month’s MRR)/Last Month’s MRR

11 – Bookings

It refers to the total amount that is acquired by new deals (up-front new payments and recurring combined) in a particular period of time. It is different from MRR as it considers the whole amount made in a particular month than only the recurring revenue.

12 – MRR Growth Rate

It is the rate at which your MRR is growing over a certain period of time. It is very important for gauge the growth in revenue on per month basis. To calculate this:

MRR Growth Rate = ((This Month’s MRR – Last Month’s MRR)/Last Month’s MRR)*100

13 – Net New MRR

Most of the SaaS business need to have the actual amount of revenue generated rather than knowing the growth rate of it in the percentage form. This is where Net New MRR comes into play. It can be calculated using the following equation.

Net New MRR = New MRR + Expansion MRR – Churn MRR

14 – SaaS Quick Ratio

It gives you the ratio of your revenue growth to churn which is very useful to see the health of your revenue growth. It is actually the comparison of your revenue growth and revenue shrinkage over a particular time period.

SaaS Quick Ratio = (New MRR + Expansion MRR)/(Churned MRR + Contraction MRR)

15 – Burn Rate

It is the rate at which a company or business utilize their cash supply over time. It is more useful for investors to know or estimate about the next round of funding a startup would require in a particular time.

16 – Gross Burn Rate

It is the amount of money a SaaS business spends in a month.

17 – Net Burn Rate

It is the amount which a company loses in a month. Revenue is subtracted from the spend amount and the difference is referred as the Net Burn Rate.

18 – Zero Cash Date (ZCD)

It is the date on which it is predicted that your business will run out of cash supply, based on the burn rate and no new revenue generated.

19 – Cost of Goods Sold (COGS)

The total spend that is required for the service, from serving customers to delivering/upgrading solution, is the cost of goods sold in a SaaS business.

20 – Gross Margin

It is the percentage of leftover revenue after subtracting the COGs from the total revenue generated.

Gross Margin = (Revenue – COGs)/Revenue

21 – Growth

Growth is simply the success and expansion of business in a given period. It determines the effectiveness of business in terms of revenue and market share.

22 – Cash

Cash is a simple metric which is actually the amount that available to be spent on the business. It is essential for startups to keep an eye on this, so they can control the spend and do not fall short of cash in lesser than the projected time.

 

Final Words

These are all the significant SaaS metrics which every SaaS marketer, founder and investor would know about for better growth and effective performance tracking. Knowing about each of these metrics can help you focus on the right KPIs of your business.

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Furqan Tafseer
Furqan Tafseer
Furqan Tafseer is the CMO at Stratigia, an inbound SaaS marketing agency, and a tech enthusiast who has studied Philosophy and loves to keep up with everything new in the world of digital marketing and technology. He loves to spend time with his better half and daughter when he is not working. Apart from being a fitness enthusiast, he loves music, travelling, basketball and writing. You can connect with him on Twitter and LinkedIn.

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