Running a SaaS business means keeping a close eye on the numbers that matter. With so many B2B SaaS metrics available, it’s easy to get lost in the data. That’s why focusing on the right metrics is crucial.
In this article, we’ll break down 21 key B2B SaaS metrics that give you a clear view of your company’s health—helping you grow, retain customers, and stay profitable. Whether you’re optimizing acquisition, retention, or revenue, these B2B SaaS metrics will guide your decisions and keep your business on track.
B2B SaaS Metrics You Must Track For Success
From understanding customer acquisition costs to measuring retention rates, these B2B SaaS metrics provide invaluable insights into your business performance. By keeping a close eye on these key indicators, you can make informed decisions that drive growth and enhance customer satisfaction.
Acquisition-Related B2B SaaS Metrics
1. Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is like the price tag for each new customer. It is also one of the most common B2B SaaS metrics. It shows you how much you’re spending to win them over—everything from marketing campaigns to sales commissions counts. The formula is simple:
CAC = Total Sales & Marketing Spend / Number of New Customers
For example, if you spent $10,000 in marketing and sales this month and gained 50 new customers, your CAC would be $200. Ideally, you want this number as low as possible without sacrificing quality. Lower CAC means you’re getting the most bang for your buck, while a high CAC could be a sign that you’re overspending or targeting the wrong audience.
2. Cost per Lead (CPL)
Cost per Lead (CPL) is like the toll you pay to get potential customers to notice you. It helps measure the effectiveness of your marketing campaigns in generating interest or leads. The formula to calculate CPL is:
CPL = Total Marketing Spend / Number of Leads Generated
Let’s say you spent $5,000 on a campaign and it brought in 100 leads; your CPL is $50. If CPL is high, you might need to rethink your marketing channels or content strategy. But remember, the quality of leads matters as much as quantity. A low CPL won’t mean much if those leads don’t convert into customers.
3. Lead-to-Customer Conversion Rate
This is where the magic happens! The Lead-to-Customer Conversion Rate tells you how well you’re closing deals after generating interest. It’s calculated as:
Lead-to-Customer Conversion Rate = (Number of New Customers / Number of Leads) x 100
For instance, if you convert 20 customers out of 200 leads, your conversion rate is 10%. If this number feels low, don’t worry; it could just mean your sales funnel needs a little tweaking. Improving this rate not only boosts your revenue but also makes your marketing and sales efforts more efficient. It is also one of the most important B2B SaaS metrics.
Revenue-Related B2B SaaS Metrics
4. Monthly Recurring Revenue (MRR)
Monthly Recurring Revenue (MRR) is the bread and butter of any SaaS business. It’s the predictable income you generate month after month, providing stability and helping with future forecasting. The formula is straightforward:
MRR = Number of Customers x Average Revenue Per Account
A steady or growing MRR is a sign of a healthy SaaS business. You want to see this number increasing, not just through new customers but also through upselling and retaining existing ones. While benchmarks can vary by industry, an MRR growth rate of 10-20% per month is often considered solid for early-stage companies.
5. Annual Recurring Revenue (ARR)
Annual Recurring Revenue (ARR) is simply the yearly equivalent of MRR. This metric helps you think in longer timeframes, which is key for strategic planning and impressing investors. Here’s how to calculate it:
ARR = MRR x 12
ARR gives you a clear picture of your business’s revenue potential over the year, making it easier to assess long-term profitability. A steady or increasing ARR indicates that your SaaS company is building a strong foundation for future growth. Many SaaS businesses aim for an ARR of $1 million as a significant milestone.
6. Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU) tells you how much each customer is worth to your business on average. It’s calculated as:
ARPU = MRR / Total Number of Active Users
This metric is great for understanding the value of each user, whether you’re selling to small businesses or large enterprises. A higher ARPU can indicate you’re successfully upselling or offering premium pricing tiers. Ideally, you want this number to grow over time as you provide more value to customers.
7. Customer Lifetime Value (CLV or LTV)
Customer Lifetime Value (CLV) estimates how much revenue you can expect from a customer over the course of their relationship with you. The formula is:
CLV = ARPU x Customer Lifetime (in months or years)
CLV is a powerful metric because it shows you how valuable your customers are in the long run. A common goal is to ensure that CLV is significantly higher than your Customer Acquisition Cost (CAC)—many SaaS companies aim for at least a 3:1 ratio. Higher CLV means your customers are sticking around and spending more over time.
8. Expansion Revenue
Expansion Revenue is the additional income you gain from existing customers, through upselling, cross-selling, or adding premium features. While there’s no single formula for expansion revenue, it is often measured by looking at the increase in MRR or ARR from your current customer base.
Expansion Revenue reflects how well you’re able to grow existing customer accounts. Ideally, this B2B SaaS metric should steadily increase as you improve your offerings and customer relationships. SaaS companies with strong expansion revenue have a competitive advantage, as they can generate more value from each customer over time, reducing their reliance on new customer acquisition.
Retention and Churn SaaS Metrics
9. Churn Rate
Churn Rate tells you how many customers are leaving your SaaS product over a specific period. It’s a critical metric because high churn means you’re losing more customers than you can replace. The formula is:
Churn Rate = (Customers Lost During Period / Total Customers at Start of Period) x 100
A healthy churn rate depends on your business, but for SaaS, under 5% annually is often considered good. If your churn rate is high, it’s a signal that you need to improve customer satisfaction, provide more value, or optimize your onboarding process.
10. Customer Retention Rate
Customer Retention Rate is the flip side of churn—it tells you how many customers stick around. It’s vital because retaining customers is often more cost-effective than acquiring new ones. The formula is:
Customer Retention Rate = [(Total Customers at End of Period – New Customers During Period) / Total Customers at Start of Period] x 100
An excellent retention rate is a sign of strong customer loyalty and satisfaction. Many top-performing SaaS companies aim for a retention rate of 90% or higher. High retention not only boosts your bottom line but also enhances customer lifetime value (CLV).
11. Net Revenue Retention (NRR)
Net Revenue Retention (NRR) measures the revenue growth from existing customers, factoring in upgrades, downgrades, and churn. It’s calculated as:
NRR = [(Starting MRR + Expansion MRR – Churned MRR – Contraction MRR) / Starting MRR] x 100
A NRR of over 100% means you’re growing revenue even without acquiring new customers, which is a dream scenario for SaaS. It signals that you’re upselling or cross-selling effectively, while keeping churn in check. Many high-growth SaaS companies aim for an NRR of 120% or more.
12. Payback Period
Payback Period shows how long it takes to recover the costs of acquiring a customer. It’s calculated as:
Payback Period = Customer Acquisition Cost (CAC) / Monthly Revenue per Customer
The shorter the payback period, the quicker you’re recouping your acquisition costs, which is essential for scaling efficiently. In SaaS, a payback period of less than 12 months is often considered ideal. A short payback period not only boosts cash flow but also indicates that your pricing and acquisition strategies are aligned for profitability.
Growth-Related SaaS Metrics
13. Monthly Active Users (MAU)
Monthly Active Users (MAU) tells you how many unique users engage with your product in a given month. It’s a key indicator of user growth and overall product stickiness. The formula is straightforward:
MAU = Number of Unique Users in a Month
MAU is crucial for understanding how many of your users regularly find value in your product. For SaaS businesses, a growing MAU usually means a healthy adoption curve. However, the number itself isn’t enough—you also need to ensure these active users are high-quality leads, not just casual browsers.
14. Daily Active Users (DAU)
Daily Active Users (DAU) is a more granular version of MAU, tracking how many users engage with your product each day. The formula is:
DAU = Number of Unique Users in a Day
DAU is an essential metric for products that depend on daily usage, such as communication tools or collaboration platforms. A high DAU-to-MAU ratio means your users are consistently engaged, and that’s a good sign for product-market fit. As a benchmark, many SaaS businesses aim for a DAU/MAU ratio of around 20% to 30%.
15. Customer Engagement Score
Customer Engagement Score is a custom B2B SaaS metric that tracks how deeply customers are interacting with your product. This score can vary depending on the actions that matter most for your business—like logins, feature usage, or time spent within the platform. While there’s no one-size-fits-all formula, it might look something like this:
Engagement Score = (Weighted Activity A + Weighted Activity B + …) / Time Period
A high engagement score means your product is providing ongoing value and keeping users engaged. The key here is to track behaviors that align with customer success and product adoption.
16. Product Qualified Leads (PQLs)
Product Qualified Leads (PQLs) represent potential customers who have shown strong interest by using your product, often through a free trial or freemium version. These leads are highly valuable because they’ve experienced your product firsthand. The criteria for a PQL can vary, but it generally includes actions like completing onboarding or using a core feature multiple times. The formula isn’t strict, but here’s how it’s commonly thought of:
PQL = Leads who have hit key usage milestones (customized for your product)
PQLs are usually far more likely to convert into paying customers compared to marketing-qualified leads (MQLs). Tracking and optimizing for PQLs can dramatically improve your sales efficiency and customer acquisition.
17. Time to Value (TTV)
Time to Value (TTV) measures how long it takes for a new customer to realize the value of your product. It’s a vital growth metric because the quicker customers experience value, the more likely they are to stick around. The formula can be:
TTV = Time taken from onboarding to the “Aha” moment (in days)
Shorter TTV means customers are finding value faster, which leads to higher retention and satisfaction. SaaS businesses aim to reduce TTV as much as possible to drive faster adoption and minimize churn.
Customer Satisfaction & Loyalty Metrics
18. Customer Satisfaction (CSAT)
Customer Satisfaction (CSAT) is a simple yet powerful B2B SaaS metric that measures how happy your customers are with your product or service. After a customer interaction, you usually ask them to rate their satisfaction on a scale (often 1 to 5). The formula is:
CSAT = (Positive Responses / Total Responses) x 100
A CSAT score above 80% is typically considered good, but this can vary by industry. High CSAT indicates that your product is meeting or exceeding customer expectations. It’s a snapshot of how satisfied customers are at specific touchpoints, which makes it a great tool for identifying areas to improve customer experience.
19. Net Promoter Score (NPS)
Net Promoter Score (NPS) measures customer loyalty and how likely they are to recommend your product to others. Customers rate their likelihood on a scale from 0 to 10, and the formula is:
NPS = % of Promoters (9-10 ratings) – % of Detractors (0-6 ratings)
An NPS above 50 is considered excellent in SaaS, while a score of 30–50 is generally good. NPS helps gauge long-term customer loyalty and the overall health of your brand. It also serves as an early warning system—if NPS is dropping, it may signal issues with customer experience or product fit.
Profitability & Efficiency Metrics
20. Gross Margin
Gross Margin is a key profitability-focused B2B SaaS metric that shows how efficiently your company is producing its product or service relative to the revenue generated. It’s calculated as:
Gross Margin = [(Revenue – Cost of Goods Sold) / Revenue] x 100
A high gross margin (typically 70-90% for SaaS) means you’re able to keep more revenue as profit after covering the direct costs. It’s an important metric for assessing the financial health of your business. High gross margins provide more flexibility for investing in growth, like R&D or marketing.
21. Payback Period
The Payback Period measures how long it takes to recover the Customer Acquisition Cost (CAC). It’s critical because it shows how quickly new customer revenue can offset acquisition costs. The formula is:
Payback Period = CAC / Monthly Revenue per Customer
Ideally, SaaS companies aim for a payback period of less than 12 months. The shorter the payback period, the faster your business becomes profitable on new customer acquisitions, which helps sustain growth and cash flow in the long term.
Wrapping-up
In wrapping up, it’s clear that keeping tabs on these 21 B2B SaaS metrics is vital for your business.
They offer a roadmap to understanding what’s working and what needs a little TLC. By staying on top of these key B2B SaaS metrics, you can make smarter decisions that enhance customer experiences and drive growth.
Remember, it’s not just about the numbers; it’s about using them to build a stronger, more successful SaaS business. So, dive in, track these B2B SaaS metrics, and watch your company flourish!