If you’re running a SaaS company and you can’t rattle off your MRR, NRR, and CAC payback period from memory, you’re operating in the dark. These aren’t vanity metrics — they’re the vital signs of your business.
Here are the 8 SaaS metrics that should be on your dashboard, what good looks like for each, and when to worry.
1. Monthly Recurring Revenue (MRR)
Your predictable monthly revenue from active subscriptions. Track it as: new MRR (new customers), expansion MRR (upgrades), contraction MRR (downgrades), and churned MRR (cancellations). Net new MRR = new + expansion – contraction – churned. This decomposition tells you where growth is coming from.
2. MRR Growth Rate
Month-over-month percentage increase in MRR. For early-stage SaaS (under M ARR): 15-20% monthly is excellent. For scaling SaaS (M-0M ARR): 5-10% monthly. For mature SaaS (over 0M ARR): 2-5% monthly. If growth is decelerating, investigate whether it’s a demand problem, a conversion problem, or a churn problem.
3. Net Revenue Retention (NRR)
Revenue from existing customers this period / revenue from those same customers last period. This measures whether your existing customers are spending more or less over time. Above 100% means customers are expanding faster than they’re churning. Best-in-class SaaS companies have NRR of 120-130%. Below 90% is a red flag that your product isn’t delivering enough ongoing value.
4. Customer Acquisition Cost (CAC)
Total sales and marketing spend / new customers acquired. Include all costs: salaries, commissions, ad spend, tooling, events. Blended CAC is useful, but segment by channel to understand which acquisition methods are most efficient.
5. LTV:CAC Ratio
Customer lifetime value divided by acquisition cost. Target: 3:1 to 5:1. Below 3:1 means you’re spending too much to acquire relative to what customers are worth. Above 5:1 means you’re probably under-investing in growth.
6. CAC Payback Period
Months to recover the cost of acquiring a customer. CAC / (Monthly ARPU × Gross Margin). Under 12 months is the benchmark. Under 6 months is excellent. Over 18 months means you need a lot of capital to fund growth and you’re fragile to churn increases.
7. Gross Margin
For SaaS, COGS includes hosting, infrastructure, third-party APIs, customer support labor, and implementation costs. Target: 70-80%+. Below 65% raises questions about scalability. If you’re below 60%, investigate whether you have a technology cost problem or a services-heavy delivery model.
8. Burn Rate & Runway
Monthly cash consumption and months of cash remaining at current burn. Track gross burn (total monthly spend) and net burn (spend minus revenue). Always know your runway. If it drops below 6 months, it should trigger an immediate conversation about fundraising or cost reduction.
Do This Monday
- Calculate all 8 metrics for the last month. If you can’t, that tells you exactly where your FP&A capabilities need improvement.
- Build a simple dashboard that tracks these metrics monthly. Use a spreadsheet — you don’t need expensive BI tools to start.
- Set a monthly meeting to review these metrics with your co-founder or leadership team. 30 minutes. No excuses.
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