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January 16, 2025

The Ultimate Guide to SaaS Analytics: Key Metrics and Their Importance

  • Intermediate
  • SaaS

For over a year, I’ve had the pleasure of working with Reply. The team became one of our clients back in August 2022, so we’ve already come a long way together. You can read their feedback about our collaboration on the homepage.

Reply is a mix of all the best startup features: quick reactions to “changing environments,” a large and exceptionally friendly team, perfectionist leaders who set complex yet clear tasks and are always open to hearing each team member’s opinion, and who strive to accommodate. They extend this same attitude to their clients—Reply truly offers personalized service and an individual approach to each of their many customers.

…but for an analyst, such personalization and the absence of any templates in the service is a challenge.

However, after enduring the trials of fire, water, and Reply, the latter has made me the analyst I am today, so its role in my life cannot be overstated.

This lyrical introduction brings us to today’s topic: my experience with SaaS and my perspective on analytics for this type of business. Reply isn’t my only SaaS client, but it’s undoubtedly the most significant one.

So, here’s the agenda for today:

What is SaaS?

If the title caught your attention, you probably already know what it is, but let’s get on the same page.

SaaS (Software as a Service) is a business model that delivers services in the form of a cloud application or program that users interact with over the internet. Typically, SaaS offers specific tiers or “levels” of usage, detailed in pricing plans with costs based on a certain time period.

Goals of SaaS

Globally, there are only two goals: acquiring new users and retaining existing ones. In SaaS, these often fall under the purview of two separate teams—marketing and product. Simply put, the former handles acquisition, while the latter focuses on retention. However, a great SaaS company isn’t about division; it’s about consolidating the efforts of various departments towards one overarching goal: the growth of the company.

Marketing and Product Analytics

This division is subjective and somewhat conditional, as both departments need to understand each other’s metrics, albeit with less granularity. For example, marketing needs to know the churn rate segmented by user acquisition channels, but it’s sufficient for them to understand the percentage rather than the specific reasons behind each user’s churn—a detail that’s invaluable for the product team.

For this reason, I don’t separate the following metrics into two categories, as they’re all interconnected and equally critical for the business as a whole.

Which User Source is More Important?

Here, I’m referring to the source of user acquisition—the traffic channel to the website, partnerships, offline promotions, etc. By “source,” I mean what brought the user to the product.

So, which source is more important? My answer is unequivocal: the first one. We need to understand which marketing activities brought the user to the product. The fact that they later, as a client, accessed the site organically via a branded search query and upgraded to a higher plan doesn’t matter for marketing since it’s not a new customer. They did so because they liked the product—a retention issue. Conversely, product teams aren’t overly concerned about which source prompted the user to upgrade their plan; what matters is that they did, and the site’s entry source doesn’t influence that decision.

Moving forward, we’ll dive into nuances because, as they say, “The devil is in the details.” SaaS is always about nuances.

What Defines the “First Source”?

Let’s assume the business has no offline activities, just a website promoted via SEO, PPC, and a partnership program. Partners are allowed to promote the product through their own ad campaigns. Additionally, the site features forms for webinar registrations, lead magnets with valuable materials, etc.

It’s worth noting—always tag marketing activities with UTM parameters. This is standard practice (or at least it should be), but experience has shown that reminders are always necessary: don’t forget to tag website links with UTM parameters! But don’t apply tagging to the website itself...

In most cases, the “first source” to prioritize in analysis is the one from which we obtained the user’s contact information. This is determined using standard attribution—last non-direct.

First via last non-direct... no, that’s not a mistake; let me explain.

As data collection becomes increasingly restricted, it’s essential to collect data independently whenever possible instead of relying on third-party services that are subject to limitations.

This advice applies to determining lead sources as well. It’s not just feasible to do it independently—it’s necessary. This can be achieved through a JavaScript script that identifies and stores the user’s entry source in cookies. If they fill out a form or register, transferring their contact details, the cookie’s source data is also sent. This relatively straightforward approach ensures you know where your users are coming from, without relying on the limitations imposed by blockers, consent requirements, etc.

However, consult your legal team about consent compliance, as there are nuances there too.

With this data, the first source is determined as follows:

  1. If the lead comes from a partner: their source is “partner.”
  2. If the lead was captured on the website: their source is the source of the form submission that added the contact to your system. If someone first registered for a webinar and later signed up for the product, the first source is what it was at the time of the webinar registration, not the product signup.

For a comprehensive view, it’s also beneficial to record the source of the product registration. This approach answers the question of where leads are coming from and what “finalizes” their registration.

Another useful practice is to store an additional set of source/channel/campaign/term/content—the data from the user’s first visit to the site. This logic is simpler than the previous one: identify the source at the time of the first visit, save it in cookies, and don’t change it. When a form is submitted or a registration occurs, pass these values as additional fields to your CRM/admin panel.

This allows for two-level analysis: one that aggregates data by the initial entry source to the site, and another based on the source of significant actions on the site (conversions). Analyzing data solely on the basis of conversion sources can be insufficient since subsequent actions might not occur without the initial interaction. Excluding the earliest source could lead to premature conclusions and the removal of a valuable associated source from your strategy.

Regarding associated sources, it is ideal to record the entire chain of user interactions with the business until they become a customer. Storing sources for all sessions prior to a user performing a valuable action can be challenging, so an alternative approach is to store the sources of all forms submitted by unregistered users. For example, if you frequently host webinars or distribute valuable materials in exchange for contact details, you can record those sources.

The source of your customer's acquisition is a critical point for further analysis, which is why I’ve focused on it in such detail. For clarity, let’s summarize:

  • Always store the source of the contact when it first appears in your database.
  • It is highly beneficial to store the source of the user’s first visit to the site. This way, you’ll know how potential customers initially found out about you.
  • Recording registration sources is useful. This allows you to study what or who (e.g., managers) drives potential customers to become company clients.
  • Storing the sources of all submitted forms while the user is not yet a client is also beneficial. This helps identify which activities are most engaging to your potential customers.
  • You can obtain maximum insight into the impact of your activities by recording the sources of all touchpoints, not just submitted forms. Implementing this can be quite challenging. To begin with, determining whether to track the full chain can be assisted by tools like Google Analytics 4. While GA4 may not capture 100% of traffic data for various reasons, it provides enough information to answer key questions about most users’ behavior on your site. You can use this data to decide whether GA4 is sufficient or if you need to record the entire interaction chain independently.

As you can see, there’s a lot you could record, but you shouldn’t save data that you won’t analyze. Therefore, you need to establish your own strategy for source tracking.

DAU WAU MAU

The previous section was of interest to marketers and those allocating promotional budgets. This section will focus on product metrics that determine user engagement with the product.

  • DAU (Daily Active Users): Active product users per day.
  • WAU (Weekly Active Users): Active product users over seven days.
  • MAU (Monthly Active Users): Active product users over 30 days.

In most cases, the business itself defines what constitutes an "active user." It could be someone who merely visits the site/app at least once during the specified time period or someone who performs specific actions. Naturally, those who perform specific actions align more closely with the definition of "active users," but the business determines this concept.

Sometimes, to avoid spikes in the graph, DAU is calculated as the average number of active users per day over the past 30 days:

Unique user count over 30 days divided by 30.

This smooths the graph, making trends easier to discern.

However, absolute values alone aren’t sufficiently insightful. Hence, the addition of these ratios:

  • DAU/WAU: How frequently those who were active at least once during the week return daily.
  • WAU/MAU: How often those who were "active" at least once during the month returned at least once per week.
  • DAU/MAU: This is the most commonly used ratio. It reflects the percentage of users in the past month who use the product daily. The higher this percentage, the better you retain users.

These metrics are typically based on data from analytical systems like Google Analytics 4, which capture as much interaction data as possible. It’s crucial to send your internal user ID to such systems during registration, login, and whenever the user is logged in and interacting. This links multiple devices to the same user and distinguishes multiple users sharing a single device. For maximum accuracy, you can also track when users log out, which enables tracking product users and their events only when they are logged in and can perform actions restricted to logged-in users. Since we’re discussing product metrics, exclude interactions with marketing pages from calculations if your definition of "user activity" includes "visiting the site." In such cases, only visits to product pages should count.

Revenue, MRR, and Their Types

The section about money will undoubtedly interest everyone, so let’s ensure we’re aligned.

Revenue is the sum of money received from product users. However, whether the business ultimately "earns" the full revenue received at the time of payment depends on various factors, including billing principles. The longer the subscription period, the greater the likelihood of changes before the end of the billing cycle. Consequently, the company’s actual revenue may differ from the initial payment amount since SaaS businesses might issue refunds for unused periods. Alternatively, some models don’t allow changes to subscriptions in advance or don’t refund unused periods after cancellation. In such cases, the revenue equals the payment amount, but the business "earns" this revenue gradually over the service period.

MRR (Monthly Recurring Revenue) represents the actual earned revenue.

I know that MRR is often described as a predictive metric. For me, MRR has two aspects: when discussing a past period, MRR reflects the actual revenue for that period. However, MRR can also be used for forecasting—just define certain future conditions (e.g., current active users, expected new customers, typical churn rate, etc.), and you can easily predict future revenue based on MRR.

Formula:

Payment amount / Number of months of product use.

Thus, for an annual plan costing $1,200, the MRR would be $100 for each of the 12 months of actual product use ($1,200/12 months). Specifically, actual use. If refunds are issued for subscription cancellations, and the user cancels after 10 months, your revenue would be $1,200 minus a $200 refund. Total MRR would be $1,000—the actual earned revenue for the service period.

In SaaS articles, people often write about MRR but less frequently about revenue. If you only offer monthly subscriptions, the difference between revenue and MRR will be minimal. However, for complex and personalized usage models, you must calculate both indicators. MRR is more stable and doesn’t reflect significant losses if a customer on an annual subscription leaves. You’ll see a $100 loss as churn MRR, but when calculating churn revenue, you’ll see a $1,200 loss because that’s how much the customer would have paid in their next payment if they stayed. Losing $1,200 motivates action 12 times more effectively than losing $100.

This brings us to the realization that understanding MRR and revenue sums is insufficient. In the previous paragraph, I mentioned Churn MRR/revenue. There are several such types. Let’s list them:

MRR Types:

  • Total: The sum of MRR for a given month.
  • New: MRR generated in the first month of subscription. Any customer brings this in their first month of product use.
  • Expansion: The sum of MRR from customers whose MRR increased compared to the previous month. This metric tracks whether a customer began generating more revenue. It’s also worth calculating the delta between the current and previous months, as it shows how much more revenue the company gains due to satisfied active customers upgrading to higher-tier plans.
  • Contraction: The opposite of the previous point. It defines the MRR of customers whose MRR decreased compared to the previous month. Again, calculating the delta is crucial, as it shows how much revenue the company loses. Additionally, this serves as a "red flag" indicating the potential loss of these customers—they are still active users but signal that they’re unwilling to continue paying at the same level. Investigating contraction reasons and engaging closely with such clients gives you a chance to improve the product and retain these customers.
  • Churn: A dreaded term in SaaS, representing users and their MRR lost because the customer left. It’s the only metric that doesn’t pertain to earned revenue; rather, it’s the amount you’ve lost, making it one of the most critical metrics.
  • Reactivation: Defines users and their MRR when they give your product another chance and return as customers after churning.
  • Unchanged: Reflects your stability. It’s the amount your active users continue paying consistently.

Revenue types are determined by similar principles, but they require a highly customized calculation. Unlike MRR, revenue accounts for actual payment amounts at the time of receipt. To correlate a particular payment with its type, it’s better to rely on the subscription period rather than the month. Unlike MRR, this type of calculation has predictive and preventative value. For example, if you see a significant revenue increase in a certain month but MRR hasn’t risen significantly, it likely means the number of longer-term subscriptions (six months, a year) has increased, which will lead to higher MRR over time. Conversely, if you see a spike in Churn Revenue but MRR has barely changed, it indicates you lost a large number of long-term subscriptions that month, which will negatively affect MRR in the future.

Churn and Its Definition

Churn is when your customer stops being your customer. In other words, these are the clients you’ve lost.

The definition seems clear, and we only need to write the calculation formula. Here it is:

Number of customers who stopped using the company’s services (churned) during a given period / Number of active customers at the start of the period × 100%

For instance, if on September 1 you had 1,000 active customers, and during September, 50 customers left, then churn would be 50 / 1,000 × 100% = 5%.

It seems simple, doesn’t it? It is... until you try to define the formula’s components.

The active customers at the start of the period are relatively straightforward—they’re those with an active subscription on the first day of the current month or the last day of the previous month.

But what defines someone who stopped using the product?

Would you consider churned a customer who:

  • Canceled their subscription?
  • Canceled on the 15th and reactivated on the 20th of the same month?
  • Remained active but switched to a free plan?
  • Delayed their payment, which then occurred at the beginning of the next month, as your service allows a five-day grace period for late payments?
  • Canceled their subscription now but still has three months of prepaid usage remaining? Clearly, this is churn, but when does it occur—now, on the cancellation day, or three months later when the subscription officially ends? If it’s now, and the customer changes their mind and reactivates next month, was it churn, or did churn not happen at all?

This list of questions can go on. The main takeaway is this: SaaS is about the nuances and intricacies of each business. The formulas are usually simple, but defining their components often requires extensive discussion, alignment, and communication within the team.

Reasons for Churn and Contraction – RFM Analysis and Beyond

It’s obviously great to observe growth in New and Expansion customers/MRR, and it’s somewhat painful when Contraction and Churn customers/MRR grow. However, the former will grow if you draw the right conclusions from the latter, as these hold the key to growth.

Behind these metrics are people—not just people, but your customers, who you’re either losing or have already lost. Don’t hesitate to allocate resources for communication with them. This shouldn’t just be some generic email blast sent to everyone.

As they say, "divide and conquer." Segment your users. For churn analysis, RFM can come in handy.

RFM stands for Recency, Frequency, and Monetary Value—a segmentation of your customer base based on the recency of their last interaction with your company, the frequency of interactions (for SaaS, this could be the total subscription duration in months), and the total revenue generated by an individual customer over their entire interaction period.

This approach is quite flexible, and the total revenue can be replaced with the average MRR. Once you define the segmentation conditions, you’ll receive lists of customers, such as those who stayed with you for only a few months before churning—these aren’t worth significant resources for retention. For them, a feedback request or a small discount offer in an email might suffice.

You’ll also identify customers who stayed with you for a long time and contributed significantly to your revenue. Don’t hesitate to invest in researching the reasons for their churn, dedicating the man-hours of your best Customer Success representatives.

You can also prevent churn by communicating with those who fall into the contraction category. Your reports should reflect not only dry numbers but also enable quick dives into individual customer details. This process can be automated—for instance, we use cloud functions that generate and send responsible team members a list of customers to contact first, based on specific conditions. You can even get real-time alerts about payment issues with your most valuable clients.

The list of cases can go on. The key takeaway from this section is that no churn or contraction figures will be useful without customer dialogue. Personalize your communication with them, and they will tell you how to improve your product.

ARPU / ARPA – Average Revenue per User/Account

Let’s move forward. In this section, I’ll introduce you to relatively popular metrics:

  • ARPU (Average Revenue Per User)—average revenue per user.
  • ARPA (Average Revenue Per Account)—average revenue per account.

These metrics are more classical for apps, where there’s also ARPPU—Average Revenue Per Paying User. The difference is that ARPU is calculated as total revenue divided by all users, while ARPPU considers only paying users, excluding those using the app for free.

In SaaS, the calculation usually involves only active users, simplifying it to “ARPU” on a monthly basis. The formula is as follows:

MRR / Number of active users

For instance, if your MRR is 50,000 units of currency, and in the same month, you had 1,000 users, then ARPU would be:

50,000 / 1,000 = 50.

Why MRR and not revenue? It’s simple—the principle involves dividing the revenue by the number of customers, and MRR is the metric responsible for revenue.

Of course, you could calculate average revenue including those on free plans, but in my opinion, that’s excessive and could skew the results in a way that’s hard to explain.

ARPA, on the other hand, is simpler to understand. The formula is similar:

MRR / Number of active accounts

If multi-accounts (where one user can have multiple accounts) are rare in your case, ARPU and ARPA will be almost identical. Otherwise, ARPA provides a clearer understanding of revenue from a single account. If your calculations are primarily account-oriented, this is your only correct formula for calculating average revenue, as all formulas should align for accurate analysis.

On the other hand, if your focus is on users, and one account can have multiple users, consider this nuance when calculating ARPU.

LTV – lifetime value

LTV (Lifetime Value) translates to "lifelong value." Essentially, it represents the total revenue a customer is expected to generate throughout their interaction with your company. Notice the use of the future tense here, as this is a predictive metric.

That said, I often encounter cases where the term "LTV" refers to a completely different calculation, such as a variation of ARPU—when total revenue generated by all users during a past period is divided by the total number of users. This approach includes customers whose "lifetime" in your company isn’t yet complete, meaning their revenue data is incomplete.

Projections usually involve complex mathematical formulas with numerous variables, data modeling, machine learning, data science, and other fancy terms. However, a prediction is just that—a prediction. When someone tells you there's a 99% chance it won’t rain tomorrow, but it does, you, as an analyst, might say, “Well, there was still a 1% chance.” Most people, however, will just complain, “Oh, this weather service…”

As an analyst, you must understand that forecasts can deviate from reality. Should you construct overly complex calculations under such conditions? It depends on your business and resources. If you’re Coca-Cola, Apple, or Google, then yes—absolutely. You might have a team of data scientists solely dedicated to forecasting. But will they account for all potential “black swan” events? No, they won’t. There’s always uncertainty… and I’m sure you’ve got the idea by now.

Most businesses lack resources for a full-fledged team of scientists, and frankly, don’t have enough data to meet the rigorous demands of statistical and mathematical accuracy. This means simplifying approaches is often necessary. Yes, the margin of error increases, but it’s better to move forward with some guidance than to be completely in the dark.

In SaaS, LTV serves as that guiding light. A simplified formula looks like this:

ARPU / Churn Rate

Continuing the previous examples, if ARPU is 50 and churn rate is 5%, LTV would be:

50 / 5% = 1,000.

If you don’t know the churn rate but have a good estimate of the average number of months a customer stays with you, the formula can be adjusted:

ARPU × Average customer lifespan (in months)

Armed with these calculations, you can better plan your marketing campaigns, understanding how much you can invest in acquiring a new customer, even if it means operating at a short-term loss. Over time, the customer is likely to recover that investment and start generating profit.

CAC – customer acquisition cost

CAC refers to the cost of acquiring a customer—typically a new one, although there can be exceptions.

For instance, you might launch retargeting campaigns aimed at churned customers, wanting to calculate the cost of reactivating them.

But before diving deeper, let’s look at the formula:

Total customer acquisition costs / Number of acquired customers

The second part becomes clearer—you need to decide whom to count as an acquired user. Only new customers? Or new and reactivated? Or everyone? That’s also an option, though the classic approach considers only new customers.

Now for the costs—there are two approaches: comprehensive and simplified.

  • Comprehensive: Includes all expenses—advertising budgets, team salaries, and various operational costs incurred by the company.
  • Simplified: Usually considers only advertising campaign expenses.

I strongly recommend calculating everything, but if that’s not feasible yet and you need data, recall the flashlight analogy and start with the simplified approach, planning a transition to the comprehensive one later.

For example, if your total acquisition costs were 20,000, and during the same period, you acquired 40 new users, CAC would be:

20,000 / 40 = 500.

CAC / LTV and the Magic Number

We’ve arrived at the simplest formula yet one of the most powerful indicators in SaaS.

The simplicity lies in the formula: CAC / LTV. But reaching this formula wasn’t easy—those approximate 4,000 words you just read (assuming you did) weren’t for nothing. 😉

If you’ve read everything, you already know that achieving this ratio is extremely challenging.

The value and power of this metric make the effort worthwhile because a single calculation can instantly tell you whether your company is profitable or losing money.

For instance, if acquiring a new customer costs you 500 and their lifetime value is 1,000, the ratio would be:

CAC / LTV = 500 / 1,000 = 0.5 (50%)

  • Anything significantly below 1 (100%) is good, as it means you’re earning more than you’re spending.
  • A ratio close to 1 (100%) means you’re breaking even.
  • Anything over 1 (100%)—God forbid—indicates that your marketing is unprofitable, and it’s time to make strategic changes.

The classic benchmark is 1:3 (33%). I don’t recommend holding a ratio of 75–80% because, as you remember, LTV is a predictive metric and thus imprecise. Always account for a “safety cushion.”

If your ratio is around 10–15%, consider increasing your marketing investment because you’re missing opportunities.

There’s another metric known as the Magic Number, calculated using the formula:

LTV / CAC

These two ratios are like ROAS (Return on Ad Spend) and Ad Spend Share—different perspectives on the same concept.

The Magic Number tells you how many times your acquired customer will pay off.

Here’s the reverse logic:

  • Any result above 1 indicates profitability.
  • Any result below 1 points to losses.

Data Attribution by Date—But Which One?

Let’s talk about time-related nuances. In SaaS, there isn’t just one “important” date.

Among the key dates are when the user first:

  • Visited the website,
  • Submitted a form,
  • Registered for the product,
  • Used the service,
  • Registered for a product demo,
  • Spoke with a sales representative,
  • Paid for a subscription,
  • Renewed, churned, or reactivated their subscription,
  • Or simply the month when they used the product.

Each of these dates could vary significantly in time—e.g., there could be a long gap between visiting the site and making the first payment.

From the metrics discussed earlier, you might have already realized that SaaS often revolves around monthly milestones, so data is frequently presented on a monthly basis. But what about delayed interest?

The solution is to aggregate data using cohort logic—that is, by tying it to a specific date. To enable multi-angle analysis, multiple dates need to be captured.

It’s useful to build a funnel report with a primary breakdown by month. This should sequentially include the entire journey of your client, from visiting the site to becoming a customer, as well as their current status—expansion, contraction, churn, or reactivation.

For example, aggregate all data in such a report based on the trial start date. Start by calculating how many users began a trial, how many activated it (regardless of when), how many started paying, became customers, upgraded or downgraded their plans, churned, or reactivated up to the present. This provides a clear picture of all users who joined the trial phase in a specific month. The same logic can be applied to demo dates, helping you evaluate the effectiveness of sales managers.

For a broader perspective, you could create a similar funnel report where each metric is tied to its own date: site visits on their respective dates, trial starts on their respective dates, demos on their dates, active customers by usage dates, churns by churn dates, and so on.

In Addition

At this point, I’ve covered what I believe are the most critical analytical metrics and approaches. However, there are other metrics that, while simpler and perhaps less “powerful,” can still be valuable during analysis. Let’s quickly run through them.

Lead-to-Customer Rate

The ratio of those who became customers to the total number of leads. This simultaneously reflects the “quality” of your managers’ work and the “quality” of your leads—their interest level and prior knowledge of the product.

Formula:

Customers / Total Leads × 100%

If 50 of 1,000 leads became customers, the rate would be:

50 / 1,000 × 100% = 5%

Months to Recover CAC

This metric shows how long, on average, you’ll be in the red for acquiring a new customer. Once this period passes, the customer starts generating profit.

Formula:

CAC / (New MRR × GM), where GM is the gross margin as a percentage.

For example, if CAC is 500, the new customer’s MRR in the first month is 100, and the margin is 80%, the break-even period is:

500 / (100 × 0.8) = 6.25 months

I’d slightly modify this formula by using ARPU instead of New MRR. Initial MRR might change significantly due to discounts or plan changes. In my opinion, ARPU better represents average monthly revenue per user, making this approach more realistic:

CAC / (ARPU × GM)

Quick Ratio

This ratio quickly shows whether your profits are growing or declining. The higher the number, the better. It’s especially insightful when plotted on a graph.

Formula:

(New MRR + Expansion MRR ∆) / (Contraction MRR ∆ + Churned MRR)

Where MRR ∆ represents the change from the previous month.

ARR

This forecasts your revenue for the next year, calculated as your current MRR multiplied by 12.

Formula:

MRR × 12

ACV

Annual Contract Value shows the average revenue generated by a customer over the past 12 months. It’s somewhat similar to LTV but calculated based on actual historical data rather than projections.

Formula:

Total Revenue (last 12 months) / Total Customers

For example, if you have 1,000 customers now, and they generated 2,000,000 in the past 12 months, ACV would be:

2,000,000 / 1,000 = 2,000

Customer monthly growth rate

This metric is essentially churn in reverse, showing the rate at which your customer base grows monthly.

Formula:

Number of New Customers / Total Customers at Start of Period

Customer Concentration

This metric reveals how dependent you are on a small subset of customers.

Specifically, it measures the percentage of revenue generated by your top 10% of customers.

If your total revenue is 2,000,000, and your top 10% of customers generate 1,200,000, the concentration is:

1,200,000 / 2,000,000 = 60%

The higher this percentage, the more reliant your company is on a small customer segment—a risky situation.

Company growth rate

This metric reflects the growth or decline in the company’s revenue.

Formula:

(Revenue This Month - Revenue Last Month) / Revenue Last Month × 100%

For example, if revenue this month was 500,000 and last month it was 475,000, the company growth rate would be:

(500,000 - 475,000) / 475,000 × 100% = 5.3%

Final Thoughts

This article has been rich with formulas, but my goal was for you to take away the maximum insights that will be useful specifically for your business. Not every SaaS company needs to calculate everything under the sun. No one needs to measure all possible metrics just for the sake of having an overwhelming dashboard filled with data points.

Prioritize. No one knows your business better than you, and no one can dictate which questions are most important for you to address. At the very least, no one should. I’ve shared my experience and recommendations, but deciding whether to follow them—and which ones to adopt—is entirely up to you.

Another takeaway I’ve tried to emphasize is that every business is unique. There are countless services on the market promising, “Connect your data systems to our service, and you’ll have access to a user-friendly report-building tool that lets you analyze interconnected data in just three clicks.”

In reality, while these services aim to offer impressive solutions, they are often template-driven. They assume that every business follows the same CRM practices, integrates the most popular payment services, etc. As a result, these tools often fail to realize the ambitious ideas of their creators because they can’t adapt to the specific nuances of individual businesses.

I don’t believe that if SaaS analytics could ever be fully templated, the result would be truly outstanding. I’m against templated solutions. In my opinion, reports should account for as many details of your business as possible. And the only way to achieve that is to work with someone who immerses themselves fully in your needs, examines data down to individual customer interactions, meticulously checks data processing accuracy, and searches for patterns or reasons for deviations.

This is exactly what the team at proanalytics.team specializes in—delivering analytics that is as custom-tailored as the businesses we work with.

Let me know if you need further explanations, have additional questions, or would like to dive deeper into any of the covered topics!

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