SaaS Metrics

The most important SaaS metrics and KPIs. Learn about what metrics and KPIs are best for you, vote, and contribute your own.

Product Qualified Leads

Product Qualified Leads (PQL) measures the quality of potential customers by classifying them according to their actions and usage within the product platform. Certain actions in the scope of the product that indicate high intention to purchase are weighted higher and used to classify leads as PQLs.

Propensity to Renew

Propensity to Renew is a measure of the likelihood a customer will renew their contract instead of terminating their engagement with a company, most often provided by the customer as part of a survey. It is an indicator of revenue risk and potential logo churn.

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R&D Productivity

R&D Productivity is a performance measure of how much new revenue is associated with dollars invested into R&D within a technology company.

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Reactivation MRR

Reactivation MRR is the total amount of recurring revenue generated from reactivated customers who had previously cancelled services and have resumed a subscription within the current tracking period.

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Renewal Rate

Renewal rate tracks churn and retention down to the month of invoicing. Rather than track churn and renewals against your total customer count, you track renewals based on each cohort of monthly invoices.

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Return on Incremental Invested Capital

Return on Incremental Invested Capital is an efficiency metric used to measure the change in earnings as a percentage of incremental investments.

SaaS ARR Multiple

The ARR Multiple in SaaS calculates the ratio between a company’s valuation and its Annual Recurring Revenue (ARR). This metric can be used to estimate the approximate value of a private SaaS company.

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SaaS Magic Number

The SaaS Magic Number is a ratio showing yearly recurring revenue growth gained for every sales and marketing dollar spent. It indicates the level of operational efficiency of a company, as well as the sustainability of sales and marketing expenditure.

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SaaS Quick Ratio

SaaS Quick Ratio is used to measure the growth efficiency of a company, but is often overlooked by early stage entrepreneurs and investors. Think of SaaS Quick Ratio as a health measure of company growth.

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Serviceable Addressable Market

SAM measures the revenue opportunity of capturing a specific market for a product or service within your limitations and reach.

Serviceable Obtainable Market

Serviceable Obtainable Market (SOM) measures the realistic revenue potential of a product or service in a particular market.

Subscriber Growth Rate

Subscriber Growth Rate measures the percentage growth of an application’s account base in a given time period compared to the previous time period. The time period can be a week, a month, a quarter, or a year.

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