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The total number of customers / accounts.
MRR is all of your recurring revenue normalized to a monthly amount.
The % Growth Rate of MRR.
ARR is the yearly version of MRR. It assumes there is no churn, new customers or growth. It’s literally MRR x 12.
ARPA is the average MRR per account.
The money that is collected in the period and will be different from revenue due to timing.
Revenue happens when the service is actually provided. To keep this simple it’s been assumed all the billings have been recognized in the same month, this is often not the case, and in the case of annual upfront payments we could only recognize 1/12 in any month. Also, real historic account values have not been used and instead new account ARPA has been used.
There are no Generally Accepted Accounting Principles (GAAP) rules on the type of costs that are included in Cost of Goods Sold (COGS). It’s recommended you do not include: sales commissions, allocated overhead charges, customer success costs associated with cross-selling/up-selling, product development costs, third-party software use in-house for operations but not packaged in your product.
This is the Revenue less the Cost of Goods Sold
For SaaS companies this is often targeted at over 80%
Typically includes: Sales & Marketing, Research & Development, General & Administrative, Professional Services
EBITDA (Earnings before interest, taxes, depreciation and amortization is a measure of a company’s operating efficiency.
EBITDA as a % of Gross Margin / Gross Profit.
Your Y-on-Y MRR Growth rate + your Profit should add up to 40%. For maturing SaaS companies this is a good metric, but for early stage companies, whose Gross Profit metric may exceed 100% or more, founders should focus more on the unit economics.
A simple way to evaluate the growth efficiency of early-stage SaaS startups. A rule of thumb is that high-growth companies should aim for a Quick Ratio of 4 (meaning that for every dollar they lose in a month they add 4).
The best companies are able to maintain or even accelerate their revenue per employee. It indicates that the company is achieving economies of scale and understand the increasing or decreasing efficiency of the business.
An index ranging from -10 to 10 that measures the willingness of customers to recommend a company’s products or services to others.
The expected lifetime revenue from a new customer signed in the period.
The amount it cost to acquire a customer during the period. Note that where the customer journey is long using the costs in the same month might not be optimal.
The amount it costs to add $1 of Annual Contract Value. The 2016 Pacific Crest SaaS Survey Median CAC Ratio was $1.13
A measure of how much you make vs what it costs to acquire a customer – ideal is often quoted as >3.
A measure of how long it will take to recoup your sales and marketing investment.
A user is a uniquely identifiable visitor to your website.
A new user is a new uniquely identifiable visitor to your website.
A session is a group of user interactions with your website that take place within a given time frame. By default, a session lasts until there’s 30 minutes of inactivity, but you can adjust this limit so a session lasts from a few seconds to several hours.
A bounce is a single-page session on your site. Bounce rate is single-page sessions divided by all sessions, or the percentage of all sessions on your site in which users viewed only a single page and triggered only a single request to the Analytics server.
The average number of pages viewed during a session on your website.
The average amount of time spent on a page
Average session duration is: total duration of all sessions (in seconds) / number of sessions.
Organic Clicks are reported in Google Search Console
Your Position in Google for a Keyword is reported in Google Search Console. This metric is for the Average Position.
The Search Engine Ranking Position for a Keyword or Average for a group of Keywords.
Backlinks are links from other websites to your own content, and improve the authority of your website and Organic Search Traffic.
Mentions are mentions of your brand and content from other 3rd party-content.
New Subscribers that have opted-in to receive communications.
The total number of Subscribers that have opted-in to receive emails.
New followers from a Social Network.
The total number of followers of a named Social Network.
Of the emails sent, this is the % that opened your email.
Of the emails sent, this is the % that clicked-through using a link.
Of the emails sent, this is the % that bounced.
Of the emails sent, this is the % that unsubscribed.
The conversion rate to a goal like Trial Sign-up.
The conversion rate % of a user completing a specific goal e.g. Trial Sign-up.
The cost of a paid media click, usually an ad in media like Google Ads.
The cost of achieving the goal of acquiring new lead.
The cost of achieving the goal of acquiring a new customer.
Goals measure how well your site or app fulfils your target objectives. A goal represents a completed activity, called a conversion, that contributes to the success of your business e.g. download, sign-up, demo request. For the selected goal, this is the count of the number of matching conversions.
Goals measure how well your site or app fulfills your target objectives. A goal represents a completed activity, called a conversion, that contributes to the success of your business e.g. download, sign-up, demo request. The Goal Conversion Rate % is conversion rate to the specific goal selected.
The level of awareness of your solution by your Ideal Customer Profile or Target Market.
The average review star rating of your product on a review website.
The number of reviews.
A review of your product on a review website or blog.
A lead is a prospect that needs to be qualified as a real sales opportunity. Once qualified, you convert the lead and the lead becomes an Account and Contact and Opportunity.
Lead scoring is a methodology used by sales and marketing departments to determine the worthiness of leads, or potential customers, by attaching values to them based on their behaviour relating to their interest in products or services.
The number of Trial-Sign-ups.
A marketing-qualified lead (MQL) is a website visitor whose engagement levels indicate that he is likely to become a customer.
The % of MQLs that receive a completed Discovery Call.
The conversion % of MQLs becoming SQLs.
A sales-qualified lead (SQL) is a prospective customer that has been researched and vetted — first by an organization’s marketing department and then by its sales team – and is deemed ready for the next stage in the sales process.
The number of Demos requested by Leads.
The number of Demos booked.
The number of Demos completed.
An Opportunity is something associated with revenue. An Opportunity is neither a business, nor a person, but rather a quantifiable potential future sale.
The conversion % of SQLs to Demos Booked.
The conversion % of SQLs to Demos Complete.
The conversion % of Leads becoming Opportunities.
The % of Demo’s that result in a Trial.
The average number of SQLs assigned to each Sales Rep during a month.
The value of Opportunities Closed Won.
The conversion rate % of SQLs to Closed Won deals.
The value of Opportunities Closed Lost.
The conversion % of Demos becoming Closed Won.
The conversion % of Opportunities becoming Closed Won.
The conversion % of Trials becoming Closed Won.
Sales velocity measures how quickly you’re generating revenue. It captures the amount of time it takes to turn your SQL into revenue and is expressed as dollars per time period. Calculation: Sales velocity = (SQL Count * Deal Value * Conversion) / Sales cycle.
The number of Sales Reps with a Sales Quota.
The % of Reps achieving Quota.
The number of Ramped Reps with a Pipeline that is delivering a full Sales Quota.
New Bookings at Total Contract Value (TCV) is total value of new contracts signed in a given period. If the agreements have different lengths, it is the value of the full agreements not some arbitrary period.
The number of the new accounts signed in a given period.
Average New Contract Value (ACV) is average Total Contract Value of new accounts signed in a given period.
The % of new accounts that have opted to pay for a long period upfront e.g. 12 months.
The average number of months a contract is paid up front by new customers which improves cash flow.
The average length of new contracts signed in a given period.
ARPA is the average MRR per account. We’ve used the ARPA for new accounts signed in the period here.
The MRR from new accounts signed in the period.
The conversion % of Trials becoming Closed Won.
CMRR The MRR that has churned in the period due to cancellation or downgrades.
The MRR that’s been earned through customer / account growth in the period e.g. upgrades.
The Net MRR in the period after Churn and Expansion have been taken into account.
The % of New MRR from Expansion Bookings
The number of accounts lost during a period.
The MRR that has churned in the period.
The Gross MRR Churn expressed as a % of the starting MRR for the period.
The Net MRR Churn which includes Expansion MRR expressed as a % of the starting MRR for the period. If your Net MRR Churn is above 2% per month you have an issue. The median SAAS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month (Tomasz Tunguz). Bessemer Venture Partners say that an acceptable churn rate is in the 5 – 7% range annually.
Annualized Net MRR %.
The % of total accounts lost during a period.
The % of employees retained during a period.
The average cost of hiring new employees.
The number of new hires referred by employees.
The % of Absence Days to Working Days shows whether there’s improving health or decreasing health.
Employee Satisfaction is an Index that can me measured through internal surveys.
Employee Engagement is another Index that can me measured through internal surveys.
The % of new positions filled by internal candidates.
The rating managers give to new employees after their first review.
The % of new hires that quit after 30, 90, 365 days is a guide to quality of hire, company and workplace health.
A call with customers that match your Ideal Customer Profile to ascertain the problems they need solving that have a high level of value to them.
Allocation Conversion %
The proportion of Development Resource that is directed at specific areas e.g. Innovation, Technical Debt, Customer Requests.
The number of completed Sprints.
The number of completed Epics.
The number of Bugs Resolved. P0, P1, P2 etc.
Code reviews are where developers systematically check each other’s code for mistakes, and has been repeatedly shown to accelerate and streamline the process of software development.
The Number of Users that are active in your application on a daily basis.
A measure of how engaged your customers are.
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