Any SaaS business wanting to grow needs to track the right performance metrics (KPIs). Keeping an eye on the right SaaS metrics helps you understand how healthy your business is and lets you fix problems quickly when they come up.
However, if you're not sure which metrics matter most for getting and keeping customers, all that data won't help much. So, let's look at the six most important metrics you should be tracking to grow your SaaS business.
SaaS metric 1: Monthly recurring revenue (MRR)
Monthly recurring revenue (MRR) is the steady, predictable money your company makes each month. It's the total amount you can expect from your current customers, assuming you don't lose or add any new ones. Tracking MRR helps SaaS businesses understand their money coming in and spot any changes or patterns over time. By looking at MRR, you can see if your pricing, marketing, and customer keeping strategies are working well.
How to calculate your monthly recurring revenue?
To calculate your MRR, take the number of all your active customers and multiply it by what they pay you each month. This gives you a clear picture of how much steady money you're making monthly.
For example, a company with a $10,000 MRR in January and a $11,500 MRR in February has a monthly growth rate of 15%. This helps you track if you're moving in the right direction.
SaaS metric 2: Customer churn rate
Customer churn rate measures the percentage of customers who stop using your product within a certain time. Since keeping customers directly affects your business growth and success, you can't ignore customer churn. As you know, getting new customers costs more than keeping the ones you have. By understanding why customers are leaving, you can fix their problems and make their experience with your product better.
How to calculate your customer churn rate?
To calculate your churn rate, divide the number of customers you lost during a specific time by the total number of customers you had at the start of that period. This gives you a percentage that shows how many customers you're losing on average.
For example, let's say you had 1,000 customers in January. By the end of February, you had 980 customers. This means your churn rate over those two months is 2%.
Why you should track customer churn rate?
Tracking customer churn rate helps you understand why customers stop using your product. It shows patterns in user behavior and helps you see which groups are more likely to leave. With Wonit’s analytics, you can see which parts of your proposals clients viewed and for how long. This helps you identify deals that might be losing interest, so you can follow up in time. Keeping existing customers happy builds loyalty and encourages positive word of mouth, which supports long-term growth for SaaS businesses.
SaaS metric 3: Monthly active users (MAU)
Monthly active users (MAU) shows the number of unique customers who actively use the software within a month. It gives you valuable insights into how well your SaaS product is keeping and attracting customers. By watching MAU, you can spot trends in user behavior and usage patterns. Are certain features driving more engagement? Are there any problems keeping users away from your platform? These insights help you make smart decisions to improve user experience.
Why you should track monthly active users?
Tracking monthly active users (MAU) helps you see how well your business is performing. It shows the effect of your marketing, new features, or pricing updates. If your MAU is increasing, your strategy is working. If it drops or stays the same, it’s a sign to improve. With Wonit’s CRM integrations, you can pull client details from HubSpot or Salesforce to create personalized proposals. This makes every interaction feel tailored and helps keep users engaged and returning.
SaaS metric 4: Customer acquisition cost (CAC)
Customer acquisition cost (CAC) measures how much money you need to spend to get one new customer. CAC helps you understand if your marketing and sales strategies are working well and if your growth plan can last long term.
How to calculate your customer acquisition cost?
To calculate your CAC, add up all the costs of getting customers, like marketing campaigns, ads, salespeople salaries, and other related costs. Then, divide this total by the number of new customers you got during that time.
For example, let's say you spent $10,000 last month on sales and marketing. You got 10 new customers. This means you spent $1,000 to get one new customer.
Why you should track customer acquisition cost?
By tracking your CAC, you can see if your customer acquisition efforts are worth the money. Since CAC shows the cost of getting one new customer, lowering it means higher profits and faster growth. Tools like Wonit can help lower your CAC by speeding up proposal creation from weeks to minutes, letting your sales team respond to more leads faster. Plus, with live engagement tracking and follow up reminders, you'll never miss the perfect time to close a deal.
SaaS metric 5: Customer lifetime value (LTV)
Customer lifetime value (LTV) measures the total revenue you can expect from a customer during their entire relationship with your company. By understanding LTV, you can make smart decisions about how much to invest in getting and keeping customers.
How to calculate your customer lifetime value?
Usually, you'd calculate customer lifetime value by multiplying your average revenue per customer per month by the average customer lifespan in months. For example, if your SaaS business makes $50 per customer per month and customers stay for 12 months on average, your customer LTV is $600.
Why you should track customer lifetime value?
By calculating LTV, you can figure out how much you should spend on getting and keeping customers. If your LTV is high, it means each customer brings a lot of value to your business, making it worth spending more on marketing. A good rule is keeping your CAC lower than your LTV. If you're spending $1,000 to get a customer but only making $600 from them, you need to either lower your acquisition costs or increase customer lifetime value.
SaaS metric 6: Net promoter score (NPS)
Net Promoter Score (NPS) measures customer loyalty and satisfaction. It gives you valuable insights into how likely customers are to recommend your product or service to others.
How to calculate your net promoter score?
To calculate your NPS, ask your customers one simple question: "On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?". Based on their answers, customers fall into three groups:
Promoters (score 9 to 10) Passives (score 7 to 8) Detractors (score 0 to 6)
The formula for calculating NPS is subtracting the percentage of detractors from the percentage of promoters. A positive score means you have more promoters than detractors, while a negative score means the opposite.
Why you should track net promoter score?
Understanding your NPS shows whether your customers are satisfied with your product. It also lets you compare yourself against competitors and track changes in customer feelings over time. By regularly checking your NPS, you can fix any issues that detractors mention and work on turning passives into promoters.
Conclusion
By regularly tracking these six metrics, SaaS businesses can understand their growth better, find areas to improve, and make smarter decisions. While these metrics give you important data, remember to also look at industry benchmarks specific to your niche so you can better understand your customers and run your business more effectively.
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