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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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: “ How likely are you to recommend us to a friend or colleague?” Image source
Customers can answer on a scale from 1 to 10, with 1 being the least likely to recommend and 10 being the most. Detractors—scores 6 or below—can then be followed up with directly to find out exactly what's making them unhappy with your service. Using SaaS metrics to make better growth decisions
Now that you know which metrics actually matter, what do you do with them? How can you act on your measurements to improve your SaaS business?