7 Top SaaS Metrics And KPIs You Should Know

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1. NRR: Net Revenue Retention

Calculates the percentage of recurring revenue from your existing customers over time.

It gives you a great picture of growth and revenue flow based on your MRR (monthly recurring revenue):

Example:

• Starting MRR = $50k

• Expansion MRR = $10k

• Churned MRR = $5k

=> NRR = (50 + 10 - 5)/50 = 110% => growth

⚡If NRR < 100% => danger! you lose more than you grow.

2. GRR: Gross Revenue Retention

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Also called Gross Renewal Rate.

It’s like NRR, but with a major difference: it does not include expansion revenue.

The highest possible value for GRR is 100% and measures revenue stability.

⚡Across all SaaS companies, the median GRR is around 90%. 

⚡GRR < 80% => danger!

3. ARR: Annual Recurring Revenue

The amount of money your company gets from its customers every year from:

• A: subscription cost for one year

• B: recurring revenue from add-ons or upgrades

• C: churn, revenue lost from cancellations

ARR = [A + B] - C

Example:

• 3-year subscription for $3M

• B = $300k

• C = $100k

=> ARR = [$1M + $300k] - $100k = $1,2M

⚡ARR = 12 x MRR

4. CES: Customer Effort Score

Measures what it takes to perform a given action with your products or services.

To find this out, survey your customers by asking the following two questions, on a scale of 1-10:

1. How easy was it to solve your problem?

2. How much effort did it require?

CES = Sum of all scores / total number of responses

⚡the more responses you get, the better.

5. LTV (or CLV): Customer Lifetime Value

A key indicator showing how much money a customer brings into your company over the lifespan.

LTV = [Customer $$] x [average customer lifespan]

Example:

• ARR = $300k with an average customer lifespan of 2 years

=> LTV = $600k

6. CRR: Customer Retention Rate

Gives you the percentage of customers you keep compared to those you lose over a given period of time.

Example:

• 100 customers at the start of the period.

• 110 customers at the end

• 20 new customers

=> CRR = 110-20 / 100 = 90% (you lost 10 customers between)

7. CAC: Customer Acquisition Cost

Tells you how much money you spend in total including marketing and sales activities to acquire one customer.

Example:

• Total acquisition $$ = $100k in Sales commissions + $50k marketing spend

• New customers = 100

=> CAC = 150.000 / 100 = $1500

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