10 SaaS Metrics That Actually Matter (And How to Use Them to Grow)

8 minutes

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Scaling a SaaS business isn’t about doing more — it’s about measuring smarter. This is the ultimate guide for founders, marketers, and product teams who want to scale smart by tracking what actually moves the needle. 

Whether you’re chasing product-market fit or preparing for Series A, the right metrics can be the difference between sustainable growth and silent churn. In this article, we’ll break down the 10 must-track SaaS metrics — from MRR and CAC to retention and runway — with clear formulas, real benchmarks, and tips on how to actually use them to grow.

1. Monthly Recurring Revenue (MRR)

What is MRR?
MRR is the total revenue you expect to earn every month from active subscriptions. It doesn’t include one-time payments or professional services — just recurring charges.

Why does MRR matter?
This is your north star for predictable growth. MRR tells you how fast your business is growing (or shrinking) and gives your team a single metric to rally around.

How to calculate MRR?

MRR = Number of active customers × ARPA (Average Revenue Per Account)  

Use case:
Say you’re testing a new pricing tier. By tracking MRR before and after rollout, you can see how many users upgrade, downgrade, or churn — and whether the change is actually improving recurring revenue. 

MRR is also a key metric in investor decks, revenue forecasts, and hiring plans.

Benchmark:
Early-stage SaaS companies should aim for 10–20% month-over-month MRR growth. As you mature, growth rates naturally taper but MRR should still trend up steadily.


2. Customer Lifetime Value (LTV)

What is LTV?
LTV estimates how much revenue a customer will generate during their entire relationship with your product.

Why does LTV matter?
It helps you understand how much you can afford to spend on acquiring a customer. If LTV is low, scaling becomes risky and unprofitable.

How to calculate LTV?
LTV = ARPA × Gross Margin × Average customer lifespan (months)

Use case:
If your average customer pays $100/month, stays for 10 months, and you operate at a 70% margin, your LTV is $700.

That means you should aim to keep your CAC (see below) under that amount to stay profitable.

Benchmark:

The ideal LTV:CAC ratio is at least 3:1. Anything lower means your acquisition costs are too high or your retention is too low.


3. Customer Acquisition Cost (CAC)

What is CAC?

CAC measures how much you spend to acquire each new customer — across sales, marketing, tools, and overhead.

Why does CAC matter?

It tells you whether your go-to-market strategy is efficient. High CAC eats into your profitability, especially if your LTV is low.

How to calculate CAC?

CAC = Total sales & marketing spend / Number of new customers acquired

Use case:

If your marketing spend this month is $15,000 and you acquired 30 customers, your CAC is $500.
Now compare that to your LTV — is it worth it?

Benchmark:

Aim for a CAC payback period under 12 months, especially in early growth phases.


4. LTV:CAC Ratio

What is LTV:CAC?

This ratio shows how much return you generate from a customer relative to what it cost to acquire them.

Why does LTV:CAC matter?

It gives you a high-level view of your business model’s profitability and scalability. It’s also one of the most investor-loved SaaS KPIs.

How to calculate LTV:CAC?
LTV:CAC = Customer Lifetime Value / Customer Acquisition Cost

Use case:

If your LTV is $1,200 and CAC is $400, your ratio is 3:1 — which is healthy.
If the ratio is <1, it means you’re spending more than you earn. Time to optimize acquisition or retention.

Benchmark:

  • <1: You’re losing money
  • ~3: Sustainable growth
  • >5: Potential underinvestment in growth

5. Churn Rate

What is churn?

Churn is the percentage of customers (or revenue) you lose during a specific time period.

Why does churn matter?

High churn destroys recurring revenue. It’s easier (and cheaper) to retain a customer than to acquire a new one.

How to calculate churn?

Customer churn = Lost customers / Total customers at start × 100
Revenue churn = Lost MRR / Starting MRR × 100

Use case:

Churn spikes after a UI update? Time to investigate UX.

Recurring product issues? Churn shows you where retention is breaking down.

Benchmark:

  • B2B SaaS: <5% monthly churn
  • B2C SaaS: 5–8% is normal, depending on price point

6. Net Revenue Retention (NRR)

What is NRR?

NRR shows how much recurring revenue you retain from existing customers, including expansions, contractions, and churn.

Why does NRR matter?

NRR >100% means you’re growing even without acquiring new users. It’s a strong indicator of product-market fit and user satisfaction.

How to calculate NRR?

NRR = (Starting MRR + Expansions - Contractions - Churn) / Starting MRR × 100

Use case:

Let’s say your MRR starts at $100k, you lose $5k to churn, $2k downgrade, but gain $15k from upsells.

Your NRR = ($100k + $15k – $2k – $5k) / $100k × 100 = 108% — which is excellent.

Benchmark:

  • 100% = Stable
  • 120%+ = Best-in-class

7. Monthly Active Users (MAU) / Daily Active Users (DAU)

What is MAU/DAU?

MAU and DAU track how many users log in and use your product on a daily or monthly basis.

*What about WAU?

WAU (Weekly Active Users) is often used alongside or instead of MAU/DAU for products with weekly usage cycles — like learning apps, internal tools, or SaaS dashboards. It provides a middle-ground view of engagement that’s especially useful when daily usage isn’t expected but monthly feels too broad.

Why does it matter?

These metrics measure engagement and stickiness. Low usage today means churn tomorrow.

How to calculate engagement ratio?

DAU / MAU = % of monthly users using the product daily

Use case:

Track usage by feature or cohort. If new users stop logging in after 7 days, you’ve got an onboarding or value gap.

Benchmark:

  • Consumer apps: 20–40% DAU/MAU
  • B2B tools: 10–30%, depending on use case

8. Free-to-Paid Conversion Rate

What is conversion rate?

It measures how effectively your free users or trial leads convert into paying customers.

Why does it matter?

It’s a direct signal of product-market fit, perceived value, and onboarding success.

How to calculate conversion rate?
Conversion = Paid users / Free users × 100

Use case:

If 1,000 users sign up for a free trial and 180 upgrade, your conversion rate is 18%.
Optimize onboarding, trial length, or pricing to lift this.

Benchmark:

  • Freemium models: 2–5%
  • Free trials: 15–25%

9. Average Revenue Per Account (ARPA)

What is ARPA?

ARPA is the average monthly revenue you generate from each active customer.

Why does ARPA matter?

Tracking ARPA helps you analyze the impact of pricing changes, upsells, and plan usage over time.

How to calculate ARPA?

ARPA = MRR / Total number of active customers

Use case:

If MRR stays flat but ARPA increases, you’re upgrading existing users. 

If ARPA falls, it may be time to revisit your pricing strategy or segment approach.

Benchmark:

There’s no universal benchmark, but tracking ARPA trends over time is key for spotting product shifts and monetization wins.


10. Burn Rate & Runway

What is burn rate?

Burn rate is how much cash your company spends monthly. Runway is how many months you can survive at your current burn.

Why does this matter?

Even with great MRR, a high burn rate can kill your company before you break even. This metric keeps your growth grounded in financial reality.

How to calculate runway?

Runway = Cash on hand / Monthly burn

Use case:

If you’re burning $50k/month and have $600k in the bank, you have 12 months of runway.

That’s decent — but not fundraising-proof. Monitor this closely as you scale.

Benchmark:

Most SaaS teams aim for 12–18 months of runway to balance growth and risk.


Bonus: How to Actually Use These Metrics

Tracking is easy. Acting is everything.

SaaS growth doesn’t come from dashboards alone — it comes from decisions. Once you’re measuring the right KPIs, the real value lies in turning that data into action: identifying which campaigns actually move MRR, spotting churn before it happens, and uncovering which segments drive the most LTV.

Here’s how to make your metrics actionable:

  • Build real-time dashboards with tools like Looker Studio, or Tableau
  • Segment everything: by channel, cohort, pricing tier, or geography
  • Automate reporting, so your team sees key KPIs without waiting for the monthly review
  • Share metrics company-wide to create a culture of accountability and clarity
  • Revisit and refine regularly — metrics that worked at 10 customers won’t scale to 10,000

Need help putting it all together?

That’s what we do. At Valiotti Analytics, we help SaaS teams build crystal-clear dashboards, unify messy data, and surface the metrics that actually matter — from CAC payback to churn forecasting and product usage insights. Whether you’re just getting started or scaling fast, we turn data into decisions.

Let’s talk if you’d like us to audit your current setup or build a custom reporting layer around your stack.