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Key SaaS Metrics
SaaS founders should monitor MRR/ARR, churn rate, expansion revenue, and the LTV/CAC ratio to understand growth efficiency and long-term profitability. These core metrics inform product prioritization, pricing strategy, and sales investments.
Beyond headline metrics, analyze cohorts and retention curves to identify whether changes affect new or existing customers. Small improvements in churn or expansion revenue compound quickly for subscription businesses.
Example: Analyze churn by cohort and run small experiments on onboarding improvements for the worst-performing cohorts. Even a modest reduction in churn for one cohort can have a meaningful impact on LTV and long-run revenue.
Action items:
- Track MRR, churn, expansion, and cohort retention monthly
- Run experiments on onboarding and measure cohort improvements
- Tie KPIs to go-to-market initiatives and review progress each month
Cohort-driven analysis and repeatable experiments make SaaS metrics actionable.
