"What gets measured gets managed—but what you measure determines whether you succeed. Focus on metrics that tell you what to do next, not metrics that just make you feel good."
Here's what separates successful SaaS companies from struggling ones:
They track the right metrics.
Not vanity metrics that make you feel good.
But actionable metrics that tell you where to focus.
This guide covers every SaaS metric you need to track—with formulas, benchmarks, and what to do about them.
Revenue Metrics
1. Monthly Recurring Revenue (MRR)
Definition: Predictable revenue from subscriptions each month
Formula:
MRR = Number of Customers × Average Revenue Per User (ARPU)
Example:
- 100 customers
- Average monthly payment: $100
- MRR: $10,000
2. Annual Recurring Revenue (ARR)
Definition: Annualized version of MRR
Formula:
ARR = MRR × 12
Example:
- MRR: $10,000
- ARR: $120,000
3. Average Revenue Per User (ARPU)
Definition: Average revenue per customer per month
Formula:
ARPU = Total Revenue / Total Customers
Example:
- MRR: $10,000
- Customers: 100
- ARPU: $100
4. Revenue Growth Rate
Definition: Month-over-month revenue growth
Formula:
Revenue Growth Rate = ((Current MRR - Previous MRR) / Previous MRR) × 100
Example:
- Previous month MRR: $8,000
- Current month MRR: $10,000
- Growth rate: ((10,000 - 8,000) / 8,000) × 100 = 25%
Benchmarks:
- Excellent: 15%+ monthly growth
- Good: 10-15% monthly growth
- Needs Work: 5-10% monthly growth
- Critical: <5% monthly growth
5. Net Revenue Retention (NRR)
Definition: Revenue retained from existing customers (including expansion, excluding churn)
Formula:
NRR = (Starting MRR + Expansion MRR - Contraction MRR - Churned MRR) / Starting MRR × 100
Example:
- Starting MRR: $100,000
- Expansion revenue: $15,000
- Contraction revenue: $5,000
- Churned revenue: $3,000
- NRR: (100,000 + 15,000 - 5,000 - 3,000) / 100,000 × 100 = 107%
Benchmarks:
- Excellent: >125%
- Good: 110-125%
- Needs Work: 100-110%
- Critical: <100% (shrinking)
Customer Metrics
6. Customer Acquisition Cost (CAC)
Definition: Total cost to acquire a new customer
Formula:
CAC = (Total Sales & Marketing Spend) / (New Customers Acquired)
Example:
- Monthly marketing spend: $5,000
- New customers: 25
- CAC: $200
7. Lifetime Value (LTV)
Definition: Total revenue expected from a customer
Formula:
LTV = ARPU × (1 / Monthly Churn Rate)
Example:
- ARPU: $100
- Monthly churn: 5%
- LTV: $100 / 0.05 = $2,000
8. LTV:CAC Ratio
Definition: Customer value compared to acquisition cost
Formula:
LTV:CAC = LTV / CAC
Example:
- LTV: $2,000
- CAC: $200
- Ratio: 10:1
Benchmarks:
- Excellent: 3:1 or higher
- Good: 2-3:1
- Needs Work: 1-2:1
- Critical: <1:1 (losing money on acquisition)
9. Payback Period
Definition: Months to recover acquisition cost
Formula:
Payback Period = CAC / (ARPU × Gross Margin %)
Example:
- CAC: $200
- ARPU: $100
- Gross margin: 80%
- Payback: $200 / ($100 × 0.80) = 2.5 months
Benchmarks:
- Excellent: <12 months
- Good: 12-18 months
- Needs Work: 18-24 months
- Critical: >24 months
Churn Metrics
10. Customer Churn Rate
Definition: % of customers who leave in a period
Formula:
Customer Churn Rate = (Churned Customers / Total Customers at Start) × 100
Example:
- Churned customers: 5
- Starting customers: 100
- Churn rate: 5%
Benchmarks:
- Excellent: <2% monthly
- Good: 2-5% monthly
- Needs Work: 5-10% monthly
- Critical: >10% monthly
11. Revenue Churn Rate
Definition: % of MRR lost from churned and contracted customers
Formula:
Revenue Churn Rate = (Churned MRR + Contraction MRR) / Starting MRR × 100
Example:
- Churned MRR: $3,000
- Contraction MRR: $2,000
- Starting MRR: $100,000
- Revenue churn: (3,000 + 2,000) / 100,000 × 100 = 5%
12. Net Churn
Definition: Revenue churn minus expansion revenue
Formula:
Net Churn = Revenue Churn - Expansion Rate
Example:
- Revenue churn: 5%
- Expansion rate: 8%
- Net churn: 5% - 8% = -3% (negative churn = growth!)
Engagement Metrics
13. Activation Rate
Definition: % of users who complete key actions
Formula:
Activation Rate = (Activated Users / Total Signups) × 100
Example:
- Activated users: 40
- Total signups: 100
- Activation rate: 40%
14. Daily/Monthly Active Users (DAU/MAU)
Definition: Number of users who engage in a period
Formula:
DAU/MAU = Daily Active Users / Monthly Active Users
Example:
- DAU: 1,000
- MAU: 5,000
- Ratio: 20%
Benchmarks:
- Excellent: >30%
- Good: 20-30%
- Needs Work: 10-20%
- Critical: <10%
15. Net Promoter Score (NPS)
Definition: Customer loyalty measure
Formula:
NPS = % Promoters - % Detractors
Promoters: Score 9-10 Passives: Score 7-8 Detractors: Score 0-6
Example:
- 60% Promoters
- 30% Passives
- 10% Detractors
- NPS: 60% - 10% = 50
Benchmarks:
- Excellent: 50+
- Good: 30-50
- Needs Work: 0-30
- Critical: <0
Efficiency Metrics
16. Burn Rate
Definition: Rate at which startup spends cash
Formula:
Burn Rate = (Cash at Start - Cash at End) / Months
Example:
- Cash at start: $500,000
- Cash at end: $470,000
- Monthly burn: $30,000
17. Runway
Definition: Months until cash runs out
Formula:
Runway = Cash Balance / Monthly Burn Rate
Example:
- Cash balance: $500,000
- Monthly burn: $30,000
- Runway: 16.7 months
Benchmarks:
- Safe: 18+ months
- Caution: 12-18 months
- Warning: 6-12 months
- Critical: <6 months
18. Rule of 40
Definition: Growth rate + profit margin should exceed 40%
Formula:
Rule of 40 = Revenue Growth Rate + Profit Margin
Example:
- Growth rate: 25%
- Profit margin: 20%
- Rule of 40: 45% ✓
Benchmarks:
- Excellent: >40%
- Good: 30-40%
- Needs Work: 20-30%
- Critical: <20%
The SaaS Metrics Dashboard
Daily Metrics to Watch
- MRR
- New customers
- Churned customers
- Daily revenue
Weekly Metrics to Review
- Week-over-week growth
- CAC by channel
- Conversion rates
- Active users
Monthly Metrics to Analyze
- Monthly MRR
- Churn rate
- LTV:CAC ratio
- NPS
- Runway
Quarterly Metrics to Deep Dive
- NRR
- Expansion revenue
- Burn rate
- Rule of 40
Related Reading
- Customer Acquisition Cost Guide - Optimize CAC
- Product-Market Fit Framework - Metrics for PMF
- User Onboarding Guide - Improve activation
Need Help Setting Up Your Metrics Dashboard?
At Startupbricks, we've helped dozens of startups implement tracking and analytics. We know which metrics matter, how to measure them, and how to use them for growth.
Let's talk about building your metrics dashboard.