5 SaaS Metrics You Should Track

Most businesses obsess with customer acquisition cost (CAC). SaaS companies too. That's a good start, but it's not enough. The key question is: are you acquiring the most valuable customers and how can you do more of that?Here are 5 metrics that ditch the fluff and tell you what's really going on:

1. Customer Lifetime Value (LTV)

Forget CAC for a second. LTV reveals the total revenue a customer brings in over their entire relationship. It's a much better measure of a customer's worth. A rising LTV is a clear sign you're doing something right with retention and upselling. It also tells you if your marketing investment is actually generating long-term value.

2. Monthly Recurring Revenue (MRR) Churn

This metric cuts to the chase: how much recurring revenue are you bleeding due to cancellations? A low MRR churn rate signifies happy customers. It also helps you identify weak spots. High churn might expose issues with onboarding, product value proposition, or pricing. Fix these, and your churn problem fixes itself.

3. Average Revenue Per User (ARPU)

Growth isn't just about acquiring new customers. ARPU tells you how much revenue you're squeezing out of your existing user base. Can you entice them with higher tiers or complementary products? Increasing ARPU is a great way to boost your bottom line without the constant acquisition hustle.

4. Conversion Rates by Marketing Channel

Forget vanity metrics like website traffic. Conversion rates tell you which marketing channels are actually bringing in paying customers. Analyze these rates and ditch the channels that are wasting your money. Focus on the ones that are turning leads into customers efficiently. Don't be afraid to experiment and find the channels that work best for your specific audience.

5. Daily/Weekly/Monthly Active Users (DAU/WAU/MAU)

These metrics show you user engagement. Are they logging in regularly and finding value in your platform? A rising active user base is a good sign. It tells you your product is sticky and users are coming back for more. This is a much better indicator of long-term health than vanity metrics like total users.

The Bottom Line

These 5 metrics give you a clear picture of your entire business, not just the marketing funnel. Track them across the customer journey, from acquisition to engagement and ultimately, revenue generation. This data-driven approach helps you optimize every touchpoint, build a loyal customer base, and unlock the full potential of your SaaS platform. Because in the end, SaaS success isn't about vanity metrics or short-term gains; it's about building lasting relationships and maximizing the long-term value of your customers. That's where the real leverage lies.