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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):
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
Quick Metrics & Guide : grab your copy now.
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
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:
How easy was it to solve your problem?
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 $$] x [average customer lifespan]
ARR = $300k with an average customer lifespan of 2 years
=> LTV = $600k
6. CRR: Customer Retention Rate
Gives you the percentage of customers you keep compared to those you lose over a given period of time.
100 customers at the start of the period.
110 customers at the end
20 new customers
=> CRR = 110-20 / 100 = 90% (you lost 10 customers between)
7. CAC: Customer Acquisition Cost
Tells you how much money you spend in total including marketing and sales activities to acquire one customer.
Total acquisition $$ = $100k in Sales commissions + $50k marketing spend
New customers = 100
=> CAC = 150.000 / 100 = $1500
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