There are many metrics that SaaS businesses can track to measure their growth and success, but here are some of the most important SaaS growth metrics that businesses dealing with SaaS subscription management platforms must be aware of:
Monthly Recurring Revenue (MRR): MRR measures the monthly revenue that a SaaS business generates from its subscribers. It is one of the most important metrics because it provides a clear picture of the company’s financial health and growth over time.
Customer Acquisition Cost (CAC): CAC measures the cost of acquiring a new customer. It is an important metric because it helps businesses determine how much they should spend on sales and marketing to acquire new customers profitably.
Churn rate: Churn rate measures the rate at which customers are leaving a SaaS business over a period of time. It is important to track because high churn rates can indicate issues with product-market fit, customer satisfaction, or customer support.
Average Revenue Per Account (ARPA): ARPA measures the average revenue generated per customer or account. It is an important metric because it helps businesses understand the value they are delivering to their customers and identify opportunities for growth and optimization.
Net Promoter Score (NPS): NPS measures customer satisfaction and loyalty by asking customers to rate how likely they are to recommend a company’s product or service to others. It is an important metric because it provides insight into how customers perceive the value and quality of a company’s offering.
Gross Margins: Gross margins measure the amount of revenue that a business retains after accounting for the cost of goods sold. It is an important metric because it indicates how profitable a business is and how much room it has for growth.
Lifetime Value (LTV): LTV measures the total revenue that a customer will generate over the course of their relationship with a SaaS business. It is an important metric because it helps businesses determine the value of their customer base and identify areas for improvement in customer retention and engagement.
Overall, these SaaS growth metrics can help businesses understand their financial health, customer acquisition and retention, and potential for growth, and optimize their strategy accordingly.
