The presentation covers the basic metrics that any SaaS company should have at a minimum. Metrics include: ARPU MRR ARR Churn LTV CPA Growth NPS Viral Coefficient

1. Metrics for SaaS
Dave Stevenson
@dnstevenson
Hack Ogden, June 2014

4. ARPU

5. ARPU
• Average Revenue Per User
• Take the average of your users and the plans
they are on and average it out.
• Use this as a discussion around your price
points and plans. Which plan are you trying to
get people to signup for? Is there an imbalance?
• Get more customers or drive this higher?

6. ARPU
Example:
100 customers on $10 / month plan.
50 customers on $20 / month plan.
5 customers on $50 / month plan.
(100*10) + (50*20) + (5*50) / 155 = $14.51 ARPU

7. MRR & ARR

8. MRR & ARR
• Monthly Recurring Revenue
• # users * ARPU
• Annual Recurring Revenue
• MRR * 12
• A nice way to track general revenue

9. Churn

10. Churn
• Answers: What is your customer turnover rate?
• # lost / starting value
• Track by month
• Example:
• 3 cancelled accounts during month / 100
customers at start of month = 3% churn

11. Churn
• Aim for 5-7% annually
• 5% monthly ends up 46% yearly
• Yearly Churn = (1-.<monthly churn>)^12
• 5% monthly: (1-.05)^12 = 46% yearly
• http://sixteenventures.com/saas-churn-rate/

12. LTV

13. LTV
• LifeTime Value
• Tells you how much a user is worth
• LTV = ARPU * (1/C<monthly churn>)
• Example:
• $14.51 * (1/0.03) = $480.28 LTV

14. CPA

15. CPA
• Cost Per Acquisition
• How much does it cost you to gain a customer.
• Vital to know when determining value of
advertising
• $2 per click on Adwords. 50 clicks to get 1
signup == $100 CPA

16. CPA
• Is a $100 CPA good?
• Depends on your LTV. If LTV < $100, thats a bad
deal. > than $100, then turn it on

17. WSG

18. WSG
• Weekly Sales Growth
• Measure just about anything. Best are revenue
and active users
• WSG = (present - start) / (start)
• Example: 100 customers on Sunday, 112
customers on Saturday = 12% growth
• (112 - 100) / 100 = 12%

19. –Paul Graham
“A good growth rate during YC is 5-7% a week.
If you can hit 10% a week you're doing
exceptionally well. If you can only manage 1%,
it's a sign you haven't yet figured out what
you're doing.”

21. NPS

22. NPS
• Net Promoter Score
• 1 Question: How likely is it that you would
recommend [your product] to a friend or colleague?
• Promoters: 9-10
• Passives: 7-8
• Detractors: 0-6
• NPS = (% of P) - (% of D)

23. NPS
• Example: Send email to 100 people. 20 score
9+, 30 score 0-6. NPS is -10. (-10 = 20% - 30%)
• You want this to be positive
• Better for enterprise/B2B apps than viral
coefficient
• Do this every 6 months for all users. Do 30-60
days for batches of new users

24. Viral Coefficient

25. Viral Coefficient
• What happens when users share your product?
• VC = (# of invites) / (# actions)
• Aim for coefficient greater than 1. That means for
every user that signs up, they will cause another
person to signup
• Better for consumer or social apps than NPS

26. Tips
• Keep metrics on cohorts & overall
• Try different ranges (i.e. weekly & monthly
growths)
• Don’t delete data (i.e. users when they cancel)
• Don’t forget to build your business

27. Caveats
• If you have just launched, ignore most of what I
just said. Concentrate on Metrics for Pirates -
AARRR - http://500hats.typepad.com/500blogs/
2007/09/startup-metrics.html
• Acquisition
• Activation
• Retention
• Referral
• Revenue

28. Action Items
• Calculate your churn & weekly sales growth
• Take 5 minutes and send survey for NPS
• Mailchimp + SurveyMonkey = easy NPS

29. Dashboard
• http://www.highcharts.com/
• http://panic.com/statusboard/
• http://www3.totango.com/
saas-dashboard/
• https://www.geckoboard.com/

30. Resources
• http://www.leananalyticsbook.com
• http://www.forentrepreneurs.com/saas-metrics/
• http://www.forentrepreneurs.com/saas-metrics-2/
• http://andrewchen.co/2013/05/06/the-critical-metrics-
for-each-stage-of-your-saas-business-guest-post-by-
lars-lofgren-of-kissmetrics/
• https://www.udemy.com/lean-analytics-workshop-
alistair-croll-and-ben-yoskovitz/

31. Thanks
dstevenson@simplifile.com
@dnstevenson