Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Metrics for SaaS

1,060 views

Published on

The presentation covers the basic metrics that any SaaS company should have at a minimum. Metrics include:
ARPU
MRR
ARR
Churn
LTV
CPA
Growth
NPS
Viral Coefficient

Published in: Software, Technology, Business
  • Be the first to comment

Metrics for SaaS

  1. 1. Metrics for SaaS Dave Stevenson @dnstevenson Hack Ogden, June 2014
  2. 2. ARPU
  3. 3. ARPU • Average Revenue Per User • Take the average of your users and the plans they are on and average it out. • Use this as a discussion around your price points and plans. Which plan are you trying to get people to signup for? Is there an imbalance? • Get more customers or drive this higher?
  4. 4. ARPU Example: 100 customers on $10 / month plan. 50 customers on $20 / month plan. 5 customers on $50 / month plan. (100*10) + (50*20) + (5*50) / 155 = $14.51 ARPU
  5. 5. MRR & ARR
  6. 6. MRR & ARR • Monthly Recurring Revenue • # users * ARPU • Annual Recurring Revenue • MRR * 12 • A nice way to track general revenue
  7. 7. Churn
  8. 8. Churn • Answers: What is your customer turnover rate? • # lost / starting value • Track by month • Example: • 3 cancelled accounts during month / 100 customers at start of month = 3% churn
  9. 9. Churn • Aim for 5-7% annually • 5% monthly ends up 46% yearly • Yearly Churn = (1-.<monthly churn>)^12 • 5% monthly: (1-.05)^12 = 46% yearly • http://sixteenventures.com/saas-churn-rate/
  10. 10. LTV
  11. 11. LTV • LifeTime Value • Tells you how much a user is worth • LTV = ARPU * (1/C<monthly churn>) • Example: • $14.51 * (1/0.03) = $480.28 LTV
  12. 12. CPA
  13. 13. CPA • Cost Per Acquisition • How much does it cost you to gain a customer. • Vital to know when determining value of advertising • $2 per click on Adwords. 50 clicks to get 1 signup == $100 CPA
  14. 14. CPA • Is a $100 CPA good? • Depends on your LTV. If LTV < $100, thats a bad deal. > than $100, then turn it on
  15. 15. WSG
  16. 16. WSG • Weekly Sales Growth • Measure just about anything. Best are revenue and active users • WSG = (present - start) / (start) • Example: 100 customers on Sunday, 112 customers on Saturday = 12% growth • (112 - 100) / 100 = 12%
  17. 17. –Paul Graham “A good growth rate during YC is 5-7% a week. If you can hit 10% a week you're doing exceptionally well. If you can only manage 1%, it's a sign you haven't yet figured out what you're doing.”
  18. 18. NPS
  19. 19. NPS • Net Promoter Score • 1 Question: How likely is it that you would recommend [your product] to a friend or colleague? • Promoters: 9-10 • Passives: 7-8 • Detractors: 0-6 • NPS = (% of P) - (% of D)
  20. 20. NPS • Example: Send email to 100 people. 20 score 9+, 30 score 0-6. NPS is -10. (-10 = 20% - 30%) • You want this to be positive • Better for enterprise/B2B apps than viral coefficient • Do this every 6 months for all users. Do 30-60 days for batches of new users
  21. 21. Viral Coefficient
  22. 22. Viral Coefficient • What happens when users share your product? • VC = (# of invites) / (# actions) • Aim for coefficient greater than 1. That means for every user that signs up, they will cause another person to signup • Better for consumer or social apps than NPS
  23. 23. Tips • Keep metrics on cohorts & overall • Try different ranges (i.e. weekly & monthly growths) • Don’t delete data (i.e. users when they cancel) • Don’t forget to build your business
  24. 24. Caveats • If you have just launched, ignore most of what I just said. Concentrate on Metrics for Pirates - AARRR - http://500hats.typepad.com/500blogs/ 2007/09/startup-metrics.html • Acquisition • Activation • Retention • Referral • Revenue
  25. 25. Action Items • Calculate your churn & weekly sales growth • Take 5 minutes and send survey for NPS • Mailchimp + SurveyMonkey = easy NPS
  26. 26. Dashboard • http://www.highcharts.com/ • http://panic.com/statusboard/ • http://www3.totango.com/ saas-dashboard/ • https://www.geckoboard.com/
  27. 27. Resources • http://www.leananalyticsbook.com • http://www.forentrepreneurs.com/saas-metrics/ • http://www.forentrepreneurs.com/saas-metrics-2/ • http://andrewchen.co/2013/05/06/the-critical-metrics- for-each-stage-of-your-saas-business-guest-post-by- lars-lofgren-of-kissmetrics/ • https://www.udemy.com/lean-analytics-workshop- alistair-croll-and-ben-yoskovitz/
  28. 28. Thanks dstevenson@simplifile.com @dnstevenson

×