SaaS Businesses: What to Measure

Doing some research on core metrics for the SaaS business model – a lot of this I’m remembering from GetSat and Typepad. KISSMetrics comes through as usual with a top five:

  • MRR – monthly recurring revenue – you can’t count a year subscription all at one time – chop it into twelfths
  • Churn – percentage of customers who bail each month – KISSMetrics says if it is in the double-digits, drop everything and focus on product
  • Cost Per Acquisition – marketing cost divided by new users
  • APC – average revenue per customer – total revenue divided by number of customers
  • Lifetime Value – average subscription length times monthly average revenue per customer

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