This presentation includes descriptions and relations of key metrics for your SaaS growth and financial goals.

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2. Short Guide To
SaaS Financial Goals
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3. SaaS –High Level Focus
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4. Key SaaS Goals
Profitability
Cash
Growth
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5. Profitability
Profitability: directly related to MRR.
MRR: (Monthly Recurring Revenue)
In a SaaS business, one of the most
important numbers to watch is MRR. It is
likely a key contributor to Profitability.
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6. Cash
Very critical to watch “Cash” in a SaaS business!
There can be a high cash expenditure to acquire a
customer, while ongoing cash payments from
customers come in small increments over a long
period of time.
!! Convincing your customers for longer term
contracts with advance payments can alleviate
this situation.
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7. Growth
Growth is a critical success factor to gain market
leadership.
Why?
 Customers prefer to buy from the market
leader,
 The market leader gets the most discussion in
the press, blogosphere, and social media.
 Cycle starts: positive natural reinforcement
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8. Key Metrics: CAC
CAC: Cost to Acquire a Customer
CAC = Total cost of Sales & Marketing / No of Deals
closed
Months to recover CAC: one of the best ways to
look at the capital efficiency of your SaaS business is
to look at how many months of revenue from a
customer are required to recover your cost of
acquiring that customer(CAC).
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9. Key Metrics: MRR
MRR: is computed by multiplying the total
number of paying customers by the average
amount that they pay you each month (ARPU).
Total Customers: a key metric for any SaaS
company. This increases with new additions
coming out the bottom of the sales funnel, and
decreases by the number of customers that
churn.
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10. Key Metrics: MRR Deepen
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11. Key Metrics: ARPU
ARPU- average monthly revenue per customer:
One of the key ways that to grow your business is
to take the average annual deal size to higher
values.
Examp: If you take average annual deal size
from $10k, to $40k, this will grow your business
by 4x.
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12. Key Metrics: Churn Rate
CHURN RATE: The percentage of customers who
end their relationship with a company in a given
period. One minus the churn rate is the retention
rate.
Average Lifetime of a Customer: is computed by
1/Churn Rate. As an example, if a you have a 50%
churn rate, your average customer lifetime will be 1
divided by 50%, or 2 months.
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13. Key Metrics: LTV
LTV: is a prediction of the net profit attributed to
the entire future relationship with a customer.
 The dollar value of
a customer relationship, based on the present
value of the projected future cash flows from the
customer relationship.
LTV = ARPU x Average Lifetime of a Customer –
the Cost to Serve them (COGS)
LTV = ARPU / Churn Rate Gürses Eroğlu
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14. Profitability
Customer Profitability = LTV – CAC
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15. Key Guidelines
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16. Profitability Graph
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17. References
http://www.forentrepreneurs.com
http://en.wikipedia.org/wiki/Customer_lifetime_value
http://en.wikipedia.org/wiki/Arpu
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