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You can’t launch an App or SaaS business without having a dashboard with the most important metrics in place. 

But what measures can/should you track? Below is a list with the most important metrics for SaaS related companies: 

Monthly Recurring Revenue (MRR)

If you have a subscription-based App or SaaS business, then the Monthly Recurring Revenue (MRR) is probably the most important metric. Basically it is the sum of all monthly fees paid by every single customer.

Imagine you have 2 plans:

  • plan A: €20/month x 100 accounts = €2000 
  • plan B: €50/month x 20 accounts = €1000

Then your MRR would be €3000

MRR can be broken down into:

  • New MRR: the recurring revenue of new accounts
  • Upgrade MRR
  • Reactivation MRR
  • Downgrade MRR
  • Churned MRR: existing customers that canceled their subscription

Furthermore, it is also interesting to calculate the MRR for each of your individual pricing plans.

Net MRR Growth Rate

Net MRR Growth rate is the net increase or decrease in monthly recurring revenue from one month to the next. 

Net MRR Growth Rate = (New MRR+ Upgrade MRR + Reactivation MRR) – (Churned MRR + Downgrade MRR) * 100

The net growth rate provides a solid indicator of how quickly your SaaS company is growing.

Average Revenue Per Account (ARPA)

Average Revenue Per Account (ARPA) is the average monthly revenue generated per account:

ARPA = MRR / # Accounts

Variations: ARPA for new & existing accounts. It’s very interesting to see the average price point that new customers have chosen, therefore limit the ARPA calculations to new & existing accounts respectively.

This is particularly relevant if you changed your pricing and want to see the effects of these changes.

Gross Margin

Gross Margin is the difference between Revenue and Cost Of Goods Sold (COGS). Typically, it is calculated as the selling price of an item, minus the cost of material and labour used to produce the item.


Lifetime Value (LTV)

Lifetime Value (LTV) is a prediction of the average revenue that a single customer will generate before they churn. It’s an estimation of the total revenue a business can reasonably expect from a single customer account.

LTV = (ARPA * Gross Margin) / Churn Rate

LTV tells companies how much revenue they can expect one customer to generate over the course of the business relationship. The longer a customer continues to purchase from a company, the greater their lifetime value becomes.


Customer Acquisition Cost (CAC)

The Customer Acquisition Cost (CAC) is the average expense of gaining a single customer. In other words, it is the total cost of sales and marketing efforts that are needed to acquire a customer. It is one of the defining factors in whether your SaaS company has a viable business model that can yield profits by keeping acquisition costs low as you scale.

Customer Churn

Keeping customers is as important as acquiring new ones, that’s why it is also very important to keep track of the customers you’re loosing. Customer Churn is the number or percentage of customers that discontinued or canceled their subscription in a given time period.

Revenue Churn

Revenue churn is the amount of revenue that you’re loosing due to canceled subscriptions. This rate can be different from the customer churn due to different pricing plans.

Imagine the same 2 plans from the MRR metric:

  • plan A: €20/month x 100 accounts = €2000 
  • plan B: €50/month x 20 accounts = €1000

So we have 120 accounts (1 account =1 customer) in total with a total MRR of €3000.

If we lose 12 accounts from our most expensive plan that we have a 10% customer churn (that’s really bad!). 

From a revenue point of view, we lose 12 x €50 = €600. That counts for 20% revenue churn (even worse!).





Some extra info about metrics

Customer vs Account vs User

Some measures are account-based, for example: ‘Average Revenue Per Account’ or ARPA.

But since an account can have multiple users (think of an Office 365 account), we could also come up with an ARPU = ‘Average Revenue Per User’.

On the other hand, we could also have an international customer with multiple accounts. And as such we can calculate also the ARPC = ‘Average Revenue Per Customer’.

In order to simplify things, we will only focus on monthly & account-based metrics.

Yearly vs Monthly vs Weekly

When you’re just starting off it makes sense to work & track on a weekly basis. As you get more mature then monthly makes more sense.