In this blog, I will rank the Top 5 KPIs used by our customers to increase their revenue. You might track some KPIs more than others depending on your industry, but these are the most relevant. I want to highlight that you can connect your PayPal & Stripe accounts for free here in less than 5 minutes to access over 100 KPIs, tools, and features to track your revenue data (customers, subscriptions, products, and payments).
Top 5 SaaS KPIs:
1. Avg Lifetime Revenue vs. Avg Tenure:
If you combine and analyze these two KPIs, you will quickly answer how many months or years a customer has subscribed for your product or service before they cancel and how much they have spent during that time. This information is critical to know if your customer acquisition cost (CAC) is viable.
- Viable business model:
- The Lifetime Revenue is higher than the CAC.
- Unviable business model:
- The Lifetime Revenue is lower than the CAC.
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2. Ratio (New Subscriptions vs. Churned Subscriptions):
Your business growth will depend heavily on your ability to acquire new customers and retain your actual ones. Remember that Ratio refers to the comparison of two or more numbers that indicates their sizes in relation to each other. Therefore, if your Ratio is negative, it is a matter of time for you to close the doors for good.
- Positive Ratio (SaaS goal):
- 2+ new subscriptions to 1 churned subscriptions.
- Negative Ration:
- 2+ churned subscriptions to 1 new subscription.
3. Avg Revenue per Customers:
ARPC is the average revenue generated from each customer per month (or per year). This KPI is really important to classify your customers by pricing range and pricing performance, you can also use it to forecast future revenue based on the trend. I want to highlight that there is a strong correlation between Customer Satisfaction and Average Revenue per Customer.
Refunds should be avoided at all costs due to incurring fee charges assumed by the company, besides affecting your overall performance. This KPI should be tracked in real-time to understand and analyze the reason to create an action plan to reduce it to zero. 80% of our customers include the refunds to calculate the churned revenue of the month.
5. Monthly Recurring Revenue (MRR):
MRR is a measure of your predictable revenue stream month over month. It is the most important SaaS KPIs because it encapsulates the performance of the most relevant KPI such as Churn, Lifetime Revenue, Tenure and Average Revenue per Customer.
If you want to run a successful SaaS, you must track this KPI in real-time because it depicts your business health. All action plans should be designed to directly impact your monthly recurring revenue.
Connect your PayPal & Stripe accounts for free here to track, manage and analyze more than 100 KPIs.