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Tracking SaaS KPIs isn’t optional—it’s critical. With global SaaS revenues projected to surpass $232 billion in 2025, companies that monitor the right SaaS metrics gain a distinct competitive edge.
KPIs help SaaS teams optimize customer acquisition, minimize churn, and scale revenue efficiently. For example, according to Databox, SaaS businesses that closely track churn and customer lifetime value see 20-30% better retention rates.
In this guide, we’ll break down the most important SaaS KPIs every B2B SaaS team should monitor to drive sustainable growth.
So, let’s start with the basic question,
What exactly is a KPI and how should a SaaS team use them?
A KPI, or key performance indicator, is a measurable value that shows how effectively a company is achieving its objectives. In the SaaS world, KPIs help teams monitor critical aspects like revenue growth, customer retention, and product engagement.
As Stripe highlights, unlike traditional businesses, SaaS companies generate recurring revenue, making consistent tracking of SaaS KPIs essential for long-term success.
For SaaS teams, KPIs serve multiple functions: they guide daily decision-making, provide clarity on business health, and ensure alignment across departments.
For instance, monitoring churn rate or monthly recurring revenue can help identify growth bottlenecks early.
Having a reliable SaaS KPIs cheat sheet ensures that everyone—from product managers to CFOs—is focused on metrics that drive sustainable growth, not vanity numbers.
Important areas your KPI should focus on
Once SaaS teams understand how KPIs guide business decisions, the next step is knowing where to focus. As Klipfolio emphasizes, SaaS KPIs should cover five core areas:
- Customer acquisition: Track how much it costs to acquire customers (CAC) and how effectively sales funnels perform.
- Customer retention: Monitor churn rate and customer lifetime value to ensure long-term stability.
- Financial performance: Use SaaS metrics like MRR and ARR to evaluate predictable revenue streams.
- Product engagement: Measure user activity, feature adoption, and overall product stickiness.
- Operational efficiency: Review metrics such as revenue per employee to streamline internal operations.
Covering these areas creates a SaaS KPIs cheat sheet that gives a well-rounded view of both growth and risks.
SaaS KPIs and SaaS metrics
Both SaaS KPIs and SaaS metrics play a crucial role in measuring performance. SaaS metrics give you raw data, while KPIs turn that data into actionable goals.
For instance, tracking positive customer reviews is helpful, but using Net Promoter Score (NPS) as a KPI allows you to benchmark customer satisfaction more effectively.
Consider a marketing campaign. You might track marketing qualified leads (MQLs) as a metric to see how many prospects your campaign generated.
But to truly measure success, you’d monitor conversion rate as a KPI to see how many MQLs became paying customers. SaaS KPI benchmarks let you compare these results against industry standards to stay competitive.
Why is SaaS KPIs important?
SaaS KPIs are essential because they transform raw business data into focused, actionable targets. For B2B SaaS companies, these KPIs offer a clear view of performance, growth, and potential risks. Tracking the right SaaS metrics ensures every department operates with aligned goals.
Here’s why SaaS KPIs matter:
- Identify growth opportunities: KPIs like MRR and customer acquisition cost highlight where growth is strongest.
- Spot retention issues early: Metrics such as churn rate and customer lifetime value reveal whether customers are staying or leaving.
- Support data-driven decisions: B2B SaaS KPIs help marketing, sales, product, and finance teams collaborate with shared performance indicators.
- Benchmark industry performance: Comparing results against SaaS KPI benchmarks shows how competitive your business is within the market.
- Maintain financial stability: Tracking revenue-focused SaaS metrics ensures sustainable cash flow and profit margins.
With the right KPIs in place, SaaS businesses gain better control over their growth trajectory and long-term success.
Now that we understand why SaaS KPIs are critical, let’s explore the key SaaS metrics every business should track to measure growth, performance, and long-term success.
12 most important SaaS KPIs to cover
Here’s a SaaS KPIs cheat sheet that every B2B SaaS company can use to monitor growth, customer retention, and financial health effectively:
1. Monthly recurring revenue (MRR)
MRR is one of the most important SaaS metrics because it provides a clear snapshot of predictable, recurring revenue each month. For B2B SaaS companies, consistent MRR indicates business stability and helps in setting short-term revenue goals.
Formula:
MRR = (total accounts for the month) x (rate per account)
Example:
If you have 400 customers paying $20 per month, your MRR = 400 x $20 = $8,000. For tiered pricing, say 100 customers pay $30, 200 pay $50, and 300 pay $70.
Your MRR = (100 x $30) + (200 x $50) + (300 x $70) = $41,000. If churn is 2%, subtract that from MRR: $41,000 - (2% of $41,000) = $40,180.
2. Annual recurring revenue (ARR)
ARR is critical for long-term financial planning, especially for B2B SaaS companies with annual contracts. It helps estimate yearly revenue and attracts investors by showcasing future income potential.
Formula:
ARR = MRR x 12
Example:
If your MRR is $41,000, your ARR = $41,000 x 12 = $492,000.
3. Churn rate
Churn rate measures customer retention. High churn can stall SaaS growth even if new customers are being added. Keeping churn low is key for customer satisfaction and long-term revenue.
Formula:
Churn rate = (canceled customers / total customers) x 100
Example:
If 150 customers cancel out of 10,000 in a month, churn rate = (150/10,000) x 100 = 1.5%.
4. Revenue churn
While churn rate focuses on customer count, revenue churn focuses on revenue loss. For B2B SaaS companies with different pricing tiers, this SaaS KPI offers a more accurate picture of financial impact.
Formula:
Revenue churn = (revenue lost / starting revenue) x 100
Example:
If you lose $10,000 out of $300,000 starting revenue, revenue churn = ($10,000 / $300,000) x 100 = 3.3%. With $2,000 gained in upgrades, net revenue churn = 2.6%.
5. Conversion rate to customer
This SaaS KPI tracks how well your business turns leads or free users into paying customers. A strong conversion rate means effective sales funnels, better product-market fit, and efficient marketing.
Formula:
Conversion rate = (new paying customers / free users or leads) x 100
Example:
If 50 out of 800 freemium users upgrade, conversion rate = (50/800) x 100 = 6.25%.
6. Average revenue per account (ARPA)
ARPA helps measure how much revenue each customer brings on average, which allows B2B SaaS companies to optimize pricing strategies and segment customers more effectively.
Formula:
ARPA = MRR / total accounts
Example:
If MRR is $60,000 with 3,000 customers, ARPA = $60,000 / 3,000 = $20.
7. Customer lifetime value (CLV or LTV)
CLV shows the total revenue a company can expect from a single customer throughout the relationship. It’s one of the key SaaS KPIs for understanding long-term revenue potential.
Formula:
CLV = (1 / churn rate) x ARPA
Example:
With a 5% churn and $40 ARPA, CLV = (1/0.05) x $40 = $800.
8. Customer acquisition cost (CAC)
CAC shows how much it costs to acquire one new customer. B2B SaaS companies rely on this KPI to balance sales and marketing investments with revenue growth.
Formula:
CAC = (sales and marketing cost) / (new customers)
Example:
Spending $50,000 to acquire 400 customers means CAC = $50,000 / 400 = $125.
9. Net promoter score (NPS)
NPS measures customer satisfaction and loyalty. High NPS indicates strong product advocacy, which can drive referrals, reduce churn, and fuel viral growth.
Formula:
NPS = (% promoters – % detractors)
Example:
From 80 respondents, 40 are promoters and 10 are detractors: NPS = (40/70 - 10/70) x 100 = 42.8.
10. Quick ratio
Quick ratio reflects how fast a SaaS company is growing by comparing revenue added to revenue lost. This KPI gives a real-time view of business momentum.
Formula:
Quick ratio = (MRR added + upgrades) / (downgrades + churn)
Example:
If $10,000 MRR is added, $1,500 in upgrades, $500 in downgrades, and $1,000 lost to churn: Quick ratio = ($10,000 + $1,500) / ($500 + $1,000) = 7.67.
11. Net burn rate
Burn rate shows how quickly your SaaS company is using cash reserves. It's crucial for startups or scaling SaaS companies still working toward profitability.
Formula:
Net burn rate = gross burn - MRR
Example:
If monthly expenses are $40,000 and MRR is $25,000, net burn rate = $15,000.
12. Viral growth (Viral coefficient)
Viral growth measures how many new customers your existing users bring in. A strong viral coefficient lowers CAC and accelerates growth through referrals.
Formula:
Viral growth = (# invitations sent) x conversion % / 100
Example:
If 100 users generate 400 referrals and 25% convert: viral growth = 400 x 25% = 100. A score above 1 indicates positive viral growth.
Now that we’ve covered the most important SaaS KPIs to track, it’s equally important to understand the best practices to measure and manage these metrics effectively to turn data into actionable insights.
Best practices to measure the SaaS KPIs
Measuring SaaS KPIs isn’t just about setting targets—it’s about tracking them consistently and making the data actionable. For B2B SaaS companies, following best practices ensures that SaaS metrics actually drive business growth.
- Maintain consistency: Regularly track KPIs on a fixed schedule. Consistent measurement helps identify trends and spot potential issues early.
- Centralize data: Store KPI data in one place using a shared dashboard. This allows teams across sales, marketing, and product to access real-time SaaS metrics and collaborate better.
- Use automation tools: SaaS KPI tracking dashboards simplify data collection and eliminate manual calculations. Tools like interactive dashboards automatically generate reports and updates, allowing teams to respond quickly to shifts in performance.
- Create historical data libraries: Save historical KPI data to track long-term trends, compare performance, and benchmark against industry standards.
- Keep KPIs visible: Make key SaaS KPIs easily accessible to all stakeholders, ensuring alignment across departments and better decision-making.
By following these best practices, SaaS companies can efficiently monitor their SaaS KPIs cheat sheet, stay competitive, and optimize growth strategies based on real-time insights.
How Compass can help in measuring SaaS KPIs
Measuring KPIs for SaaS companies often becomes complex as businesses grow. Compass simplifies the process by automating sales incentive and commission management, making it easier to track and optimize B2B SaaS KPIs across teams.
Here’s how Compass supports SaaS sales KPIs:
- Automates complex compensation plans: Easily manage spiffs, bonuses, multipliers, accelerators, and clawbacks across multiple sales roles, reducing manual work and ensuring compliance with financial regulations.
- Improves quota attainment and forecasting: Design flexible, transparent quotas aligned with revenue goals, and adjust targets anytime to reflect updated business strategies.
- Delivers real-time performance analytics: Gain instant insights into quota attainment, territory performance, and plan effectiveness with advanced analytics and mobile dashboards for managers, directors, and RevOps teams.
- Enables finance-driven revenue analysis: Allow finance teams to analyze commission-driven revenue impact with custom reports that support better budgeting and future revenue planning.
With Compass, SaaS companies can efficiently monitor critical SaaS sales KPIs and drive predictable, scalable growth with full performance visibility. Schedule a call now!
Conclusion
Tracking SaaS KPIs is crucial for every B2B SaaS company aiming for sustainable growth. By focusing on the right SaaS metrics, businesses gain deeper insights into customer behavior, financial stability, and operational efficiency.
Whether you're building your own SaaS KPIs cheat sheet or benchmarking performance against industry standards, consistent monitoring ensures that every department stays aligned with overall business goals. In today’s competitive SaaS market, staying data-driven isn’t optional—it’s the foundation for long-term success.Bottom of Form
FAQs
1. How SaaS businesses can use KPIs?
SaaS businesses use KPIs to monitor performance across revenue, customer retention, product engagement, and growth. They help teams make data-driven decisions, set clear goals, and optimize operations to drive consistent growth.
2. How to create KPIs with clients in SaaS?
Start by identifying the client’s specific goals—such as increasing user adoption or improving renewal rates. Then, define measurable SaaS metrics that align with these goals and set realistic targets. Regularly review these KPIs with clients to track progress and adjust strategies.
3. How to measure KPIs in SaaS?
SaaS KPIs should be measured consistently using centralized dashboards, automation tools, and historical data libraries. This ensures accuracy, real-time visibility, and quick responses to any performance changes.
4. What are SaaS KPIs?
SaaS KPIs are key performance indicators that track critical aspects of a SaaS business, including monthly recurring revenue, churn rate, customer lifetime value, acquisition costs, and product usage. They serve as a SaaS KPIs cheat sheet to evaluate business health and growth.