Title: The 7 SaaS growth metrics that really matter
Headings: The 7 SaaS growth metrics that really matter
The 7 SaaS growth metrics that really matter
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Acronym alert! We took a close look at the 7 most important growth metrics for SaaS, and how you can use them for sustainable growth.
The 7 SaaS growth metrics that matter most
1. Churn
2. Activation rate
3. Monthly recurring revenue (MRR) / annual recurring revenue (ARR)
ARR = 12 x MRR
4. Cost of acquiring a customer (CAC)
LTV > (3 x CAC)
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5. Customer lifetime value (CLV or LTV)
(Customer revenue x customer lifetime) - cost of acquisition and maintenance
(Average purchase value/average purchase frequency rate) x average customer lifespan
6. Expansion revenue
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7. Net Promoter Score (NPS)
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Using SaaS metrics to make better growth decisions
Is my SaaS business financially viable?
What's working well, and what could be improved?
What are the main levers we should be focusing on?
Connecting business metrics back to the user experience

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Expansion revenue is often easier to gain, as well: It's much easier and cheaper to upsell customers to more powerful versions of your product than it is to acquire net-new customers. In fact, it’s 3X cheaper to generate expansion revenue than it is to acquire new accounts. Shifting your goals from a model that narrowly focuses on net-new acquisition to a one that prioritizes expansion revenue can have a dramatic impact on growth. That’s why ProfitWell recommends that at least 30% of your revenue should come from expansions. Image credit
7. Net Promoter Score (NPS)
Unlike the financial metrics above, net promoter score is a direct measurement of how much value your customers are gaining from your product. Measuring NPS allows you to quickly find out why customers might be dissatisfied and to use their feedback to improve your product. In the early stages of a SaaS business, the qualitative data gained from customer feedback can be helpful for determining whether you have product/market fit. To measure NPS, you can survey your customers with a simple question: “