SaaS Metrics Cheat Sheet

SaaS metrics are used by SaaS (software-as-a-service) companies to measure and track growth. From revenue to marketing, these metrics help a company establish benchmarks, set KPIs, and prepare for the future. 

The application of these metrics will vary from business to business, but the fundamental purpose is universal: tracking your full funnel business performance. 

This cheat sheet covers the top SaaS metrics to track for your business: how to apply them, what each metric tells you, and the intended outcome of measuring it. Each metric below includes a clear definition and formula. Tracking is even easier when you add them to a Klips dashboard. 

Whether you’re a founder, a finance leader, a marketer, a sales rep, or anywhere in between, each of these metrics is a key part of your full business funnel. 

This is your SaaS metrics cheat sheet.

Here are the metrics covered in this article:

1. Monthly Recurring Revenue
2. Annual Recurring Revenue
3. Churn
4. Customer Retention Rate
5. Sales Cycle Length
6. Weighted Annual Contract Value (ACV) 
7. Customer Acquisition Cost (CAC)
8. Customer Lifetime Value (LTV)
9. Net Promoter Score (NPS)
10. Product Qualified Leads (PQLs)

SaaS Revenue Metrics

Revenue metrics are the heart of your business. Money is what brings you and your company growth, and arguably, success. Finance metrics are a key component of your business funnel. 

Your revenue metrics are a signal for business performance. When you dive into your revenue metrics, you’ll see one of three things: growth, stability, or areas of concern. Revenue metrics will help you dig deeper into your systems and processes to fix a problem. For example, are you seeing a lot of churn? Dig deeper into why: Is there an issue with your product? Has your success team had an increase in support tickets lately?

Revenue metrics should be used as a way to signal business health, like signs of success or early warning signs so you’re never caught off guard. 

1. Monthly Recurring Revenue

The total monthly dollar amount of your subscription revenue. You can segment your MRR to see what amount is expansion, new business, churn, or contraction. MRR is critical to track; it’s the money coming in the door every month so you can sustain your business. 

Calculate it:

ƒ Sum(Recurring subscription charges normalized to a monthly amount; exclude one-time fees)

2. Annual Recurring Revenue

The total annual dollar value of your subscription revenue. This metric is an accurate depiction of your revenue and will help you forecast your growth on a larger scale. ARR is a holistic way of looking at your business growth, whereas MRR is a more granular way of looking at your incoming revenue. 

Calculate it:

ƒ 12 × MRR (at period end)

3. Churn

SaaS businesses rely on subscription revenue, so when a customer leaves, it’s a direct hit to your MRR. The cost of acquiring a new customer is almost always more than retaining one, so churn is an important SaaS revenue metric for forecasting growth. Churn is an important metric across departments, and it’s something that your leadership team and your marketing team should keep an eye on. 

Calculate it:

ƒ Count(Churned Customers in Period) / Count(Customers at Start of Period)

SaaS Sales and Support Metrics

For SaaS businesses, sales and support are the pillars of your business. Sales brings in new customers or works on expansion for existing customers and your support team is there for your customers throughout their entire journey. 

4. Customer Retention Rate

Customer retention has a direct link to revenue. Retaining customers = less spend to acquire new customers and more opportunity for expansion and renewals. This is a metric you want to watch.

Calculate it:

ƒ (Count(Customers End of Period) - Count(New Customers in Period)) / Count(Customers Beginning of Period)

5. Sales Cycle Length

Sales cycle length is the number of days or months it takes on average to close a deal. SaaS sales teams can use this metric when creating a sales forecast, measuring efficiency, or speaking with investors. 

Calculate it:

ƒ Sum(Days from First Touch to Close for Closed-Won Deals) / Count(Closed-Won Deals)

6. Weighted Annual Contract Value (ACV)

Weighted ACV, different from ACV, expresses average contract value across segments while accounting for customer concentration. Use it when a few very large or very small contracts would otherwise skew a simple average.

Calculate it (by segment share):

ƒ (ACV_SMB × % SMB Customers) + (ACV_Mid-Market × % Mid-Market Customers) + (ACV_Enterprise × % Enterprise Customers)

SaaS Marketing and Growth Metrics

Marketing’s goal is to attract potential customers. For SaaS marketers, it can be a challenge. Products and services change or release new features or updates, have a niche audience, or exist in the cloud, so there’s no physical product. All of these attributes can make SaaS marketing challenging (and honestly, quite fun!) 

This is what makes SaaS marketing and growth metrics important to understand and track. When things change, your data keeps you grounded.

7. Customer Acquisition Cost (CAC)

How much does it actually cost to acquire a customer? Customer acquisition cost (CAC) assigns a dollar value for acquiring a new customer (fully loaded costs, including sales and marketing). CAC is important to measure in aggregate and by market segment. Is one segment more costly than another? Use this metric to determine efficiency and profitability by segment, territory, or as a whole.

Calculate it:

ƒ Sum(Sales Costs + Marketing Costs) / Count(New Customers)

8. Customer Lifetime Value (LTV)

The lifetime value of a customer is the total revenue a business can expect from a single customer account. Marketers and finance teams use this to identify the most valuable segments and to test payback thresholds.

Calculate it: 

ƒ (Average Revenue per Account) × (1 / Logo Churn Rate) × (Gross Margin %)

9. Net Promoter Score (NPS)

Net Promoter Score measures a customer’s willingness to promote your product or service to colleagues or friends. Word-of-mouth is one of the most effective growth levers. Measuring NPS helps separate detractors from promoters so you can focus your growth efforts.

Calculate it: 

ƒ (% Promoters) - (% Detractors)

10. Product Qualified Leads (PQLs)

PQLs measure the quality of potential customers based on their usage and actions in your product. Like marketing qualified leads, PQLs are assigned based on actions that indicate high intent to purchase. PQLs are often higher quality than MQLs or SQLs due to in-product experience and demonstrated interest beyond page visits or form completions. 

Calculate it: 

ƒ Count(PQLs)

Bonus SaaS metrics that you should track on your dashboard

There are hundreds of metrics to choose from, but the hardest part can be narrowing down which ones. Here are a couple of bonus metrics you can track that are applicable to forecasting your revenue and achieving your growth targets.

• DAU/MAU Ratio: Get the definition and formula
• Expansion MRR Growth Rate: Get the definition and formula 
• Net Revenue Retention Rate: Get the definition and formula
• Time to Value: Get the definition and formula

Get started today and track all of these metrics on a Klips dashboard for full funnel business performance monitoring.