23 Most Important SaaS KPIs & Metrics

Description:The total number of customers who pays regularly – being signed up for the subscription.

Should be High or Low?:If the number is going down that might be caused by cost of the subscription or low satisfaction rate of customer and additionally not enough marketing to reach for new subscribers.

Description:Number of unique visitors. It should be a number within a period of time. It can show you if the interest of the users is growing or not. You can also use it to calculate the percentage of new subscribers in compare to total number of visitors and see how likely new visitors will start the subscription.

Should be High or Low?:If the number drops down, maybe you should work on your SEO, or marketing strategy

Description:Sign-up rate is different than subscribers’ rate. This important metrics can help you to understand the progress of your marketing. You can measure how much different strategies, or some changes is marketing can increase number of subscribers from the signup group. You can offer some free trials of your product or some discounts.

Should be High or Low?:If the number of sign ups is growing but it doesn’t generate new subscribers, you might think about improving your paid offer or decrease free offer.

Description:This metrics is important to track to be able to compare it with the result of the payed traffic of your website. You can measure how much you can improve your natural traffic conversion results through the smart website optimization and including a lot of call to action buttons/ pop-ups, letter subscription or just creating an account. This way you can grow your SaaS with SEO, while tracking your metrics.

Description:The total amount of subscribers of who found your website due to the paid advertising via Google AdWords or another paid search platform. This metrics allows you to estimate if that kind of marketing is worth the price. You can compare this number with the organic new subscribers and try to improve your SEO to be able to decrease your budget for the payed advertisement if necessary.

Should be High or Low?:If the number is dropping that may be not worth to pay for advertising.

Description:This metrics shows the percentage out of number of all visitors how many of them actually bought some of your products. The target is to have this number fairly high but even if conversion rate is not very high, but the number of visitors is growing your total sales will grow as well. You can measure if it’s worth to use pay-per-click advertisement method. If your traffic is high but there is not comparable number of new subscribers that might not be worth to pay for that kind of advertising.

Calculation Method / Formula:# of successful actions / # of total visits.

Should be High or Low?:You may check how your strategies or product improvement influence on the conversion rate and based on that choose some directions in growing your company.

Description:The total number of customers/subscribers who resigned from the subscription during last month (or some period of time). This may help measure the satisfaction of customers or learned about competitors offer. You may implement some survey while resigning process so you can learn the reasons and improve your offer.

Should be High or Low?:If the number is growing that may cost your company some budget changes. Sometimes decreasing payment for the subscription may help to decrease that number.

Description:Also called the attrition rate. It is a percentage of churned customers out of all customers connected either by some contract or subscription for services or products in some period of time (in a month). The main reason usually for the attrition of the customer is poor customer experience or slow service performance.

Should be High or Low?:To decrease the percentage and increase the customer satisfaction you may consider develop tactics how to value your customers and how to build a relationship with the customer.

Description:This is the total amount of your churn expenses. It is count as lost revenue from the recurring monthly income form an average user.

Calculation Method / Formula:ARPU * number of cancelled subscriptions

Should be High or Low?:Increasing number may impact your budget assumptions and push you to make some changes and reevaluations of your investments.

Description:It is the percentage of loyal customers who keep using/purchasing your products in the end of the measured period of time out of customers counted at the beginning of that period of time. New customers are not counted into this metrics. This can help you understand your strategies for keeping your customers.

Calculation Method / Formula:(CE-CN)/CS where CE – number of all customers, CN – number of new customers acquired, CS – number of clients at the begining of the measured period

Should be High or Low?:If the number is going down, you may search for reasons and try to implement some changes. Low number might indicate some new competitor on the market or some new interesting offers that can attract clients.

Description:Average Revenue per User also known as Average Revenue per Unit. Average revenue generated by an average subscriber per month (or year). You can estimate how much a single user is worth for you and decide what kind of advertising or marketing strategies are worth to invest in.

Calculation Method / Formula: Divide the total revenue by the number of subscribers.

Should be High or Low?:This number depends on your offer prices. If your products are fairly not expensive you probably have to think more about reaching more customers and try to keep them with your competitive price offers. But in that case, it may be not worth to invest in pay-per-click advertisement method.

Description:Measures the total amount of predictable revenue, that means it is the revenue from the total number of subscribers. It doesn’t count in single time purchases.

Calculation Method / Formula:ARPU x # of users

Should be High or Low?:Some small up and downs are inevitable. They might be caused by the market itself, but unpredicted bigger falling may cost your company some budget cuts. You should investigate the reasons to be able to prevent them in future.

Description:Estimate value of the net profit coming from the entire future relationship with a client. It is the total amount of profit that average client is likely to spend over the time while being a client (Customer lifespan).

Calculation Method / Formula:one of the ways to measure LTV is:
Average value of sale * number of transactions * Retention time * profit margin

Should be High or Low?:Lower or higher number depends on type of your products or services. You can set some target and with correct investments in development and marketing strategies you can try to increase that number.

Description:This metrics shows your revenue based on newly chained customers. Based on that metrics you can compare loyalty and interest older and new customers and measure your marketing strategies as well as influence of relationship and a support on further sales.

Calculation Method / Formula:Net New MRR = New MRR + Expansion MRR – Churned MRR

Description:This metrics should show your total payment revenue from your advertisers. This metrics together with cost of AdSense can help you to calculate how many customers you need to payback your advertise investment and to make it profitable.

Should be High or Low?:If the investment is higher than income, you probably should find more suitable way of advertising your product. Unless it is calculated in for example your startup investment

Description:It is a total cost of advertising to convince a potential customer to buy your product or service. It may show you how good is your marketing strategy. The target of any marketing should be gaining as much as possible new customers not just visitors without real value. You must remember to include in the expense’s salaries, costs of software, equipment, rent etc. Conversion is very often mix with acquisition of a client it is important to know the difference, acquisition means gaining a potential client that starts a subscription but he haven’t spent money yet while conversion counts only customers who spent already money on your product or services.

Calculation Method / Formula:(Total Marketing + Sales Expenses) / number of New Customers Gained

Should be High or Low?:It is related to your campaign and marketing strategies. You should choose it according to your target based on a value of an average customer.

Description:Ad’s is one of the most important factors to achieve a success. An excellent product is not enough without a good marketing. You need to invest in advertising to improve your sales to create a recognizable label to increase your business ratings.

Should be High or Low?:You cannot assume that cost of marketing can be lowered to the maximum but the properly designed strategy can bring more customers so the budget should be adequate to possible achievements

Description:The total cost of employee payments. Total cost can grow for example if there is need to hire more people or salaries increases. It also has an influence on your employees work satisfaction rate.

Should be High or Low?:In case of some unpredicted situations or some high number of employee’s turnover rate the number can rise but within the budget you should also calculate how to make your employees satisfied with their job conditions.

Description:It is a direct cost of the goods sold per month. Generally, that metrics includes hosting costs, keeping the product running, cost of license, customer support, third-party apps included in product delivery etc.

Should be High or Low?:This is more an informative number to calculate one of the factors for calculating gross profit.

Description:Number of issues appearing during a period of time. All the problems or requests can be measured as a ticket. Tracking this number may allow to increase customer support awareness and allow to create a time standard.

Description:That metrics can be used to measure the loyalty or satisfaction of a customer. It shows the quality of relationship between customer and your company. The metrics numbers come from respondents/customers. NPS above zero usually is taken as good result. Respondents who rate your company are usually separated in tree groups: Promoters, Detractors and Passives. On average Promoters buys more, stay loyal customers or even promote your company among other potential customers. The Net Promoter Score is calculated by subtracting the percentage of Detractors from the percentage of Promoters. Number of Passives increase the total number of respondents, and due to that it lowers down the final NPS.

Calculation Method / Formula:% of promoters – % of Detractors

Should be High or Low?:If the number is going down through a period of time, there might be some problem between your company and customers.

Description:It measures how much effort your customer has to input to get his issue resolved. Besides the effort itself for that measurement very big impact will have a customer experience. Usually customers can rate you much lower due to the bad communication experience even if their problem was not complicated.

Calculation Method / Formula:You can measure it on a scale from 1 to 5 representing the amount of your customer’s effort.

Should be High or Low?:Target is the minimum effort of your customer. If the results are far from the target you should investigate and try to improve your product or services to be more user-friendly and reliable.

Description:How much profit you make on each dollar of sales before most of the expenses. The gross profit is calculated by the total revenue reduced by the cost of sale of those goods. Comparing this metrics with Net Profit margin you can also track all the other expenses that are not directly related to COGS.

Calculation Method / Formula:(Sales Revenue-COGS)/Revenue.

Should be High or Low?:If the number is going down, you should consider maybe removing products that doesn’t bring enough income but generates some problems and cost for improvement and customer support. If the gross margin is growing that means the investment in COGS is bringing high income and allows to improve and grow your product and services.