SaaS metrics: the ULTIMATE guide to Software as a Service KPIs

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When you live and breathe Software as a Service, terms like ARR, MRR, LTV, CAC become just part of your daily slang. Gross vs. Net MRR Churn, and how is it different from Customer Churn.
It's a real mess. So much so that for new company employees, I sometimes do a group class on 'understanding SaaS' to make sure they understand the language I speak after 6 years of running a SaaS company.
I figured that instead of doing that every time, we could make a thorough video. So, if you are just joining the Slidebean team, welcome to the team! If you are a stranger, well, I think you are going to find this useful as well.
#startups #Slidebean #SaaSTools
0:00 Intro
1:07 MRR and ARR
2:56 Customer churn rate
4:12 Customer Lifetime
7:27 Revenue churn
13:16 Cohorts
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Read the video transcription + sources: slidebean.com/blog/startups-s...
Follow Caya: / cayahere and / caya_here

[@slidebean]

Did this video help you out? Do you feel like you've had a bunch of your SaaS questions answered? Let us know what you thought about the video in the comments!

[@delta4497]

Slidebean, I love your videos!

[@slidebean]

@@delta4497 Thank you! We are glad that you enjoy them

[@wasiuanimashaun]

Yes, can you do one of these for marketplace startups

[@lukassimianer1778]

One of the coolest things (selfishly) that you could make is “pre revenue SaaS: what matters, what doesn’t, and how to make projections”

[@matthewheath7839]

Yea I learnt so much about SAAS, very cool

[@akkianjana]

Man, this is gold - thanks so much for doing this.

[@slidebean]

Glad you enjoyed!

[@shonifari5783]

Im not gonna lie this is the first time I'm intrigued by a sponsor in a video!

[@slidebean]

You should definitely check them out then. We really love using ChartMogul

[@ourcollectivewisdom8769]

Same

[@vamskrish]

This is definitely a life saver for aspiring Growth PMs and digital Marketing managers .

[@slidebean]

Glad we could save a life!

[@jackiedelvalle]

The 'beggining' is so distracting, but the content is indeed gold, so thank you Caya and SB.

[@aprilmintacpineda2713]

Loved it!

[@bobbytorres5282]

Brilliant! This is definitely a treasure! Big thanks

[@PhyTensor]

So glad I discovered this channel. Loving the knoweldge shared - pure gold👌🔥

[@matheussales7850]

You guys helped me a lot! Keep up the good work

[@mrdarenkumar]

Professor Caya @ Slidebean Academy does it again! Great work team!

[@richardlarsson2268]

Absolutely brilliant, thank you! 🤩

[@lawalhakeem6734]

Thanks you for this... it came in clutch making a financial model to finally close a deal

[@ourcollectivewisdom8769]

I can’t tell you how much I needed these videos lol.

[@localbooking6350]

You are a rockstar! thank you slidebean team!!

[@meeshalewis]

Discovered your channel about a month ago and have been watching everything more than once. Keep up the great work. It’s really helping me build my business idea. Also, loving the new hair style. Keep it. Looks dope!

[@slidebean]

We are happy to hear!

[@AaronDanarajF]

Ngl, I thought I was reading a different language when I saw the thumbnail.

[@AaronDanarajF]

@@OrangeToGo Good point.

[@slidebean]

It does kinda look like Simlish!

[@AaronDanarajF]

@@slidebean True!

[@porushpuri]

So valuable! Thanks for explaining it so goood!

[@didiergribeauval1281]

Thank you so much. Amazing content !!!!

[@suphalashetty9631]

Great presentation, very clear and honest one, thanks a lot.

[@albert275]

Thank you so much for this

[@andrewjarod]

it's really valuable to my work !!

[@vanshpandita3968]

Can you please please make this a proper series just like financial models

[@neanda]

thank you, very informative

[@TheWrongBrother]

Awesome. This will be useful for my project. Just one thing ... add spell check to the Slidebean AI, BEGINNING is spelt as one G two Ns midway (light note)

[@william.darrigo]

thank you Caya!

[@temitopeshoniyi]

We are almost at the launch phase of our startup. And I wouldn't have survived without your amazing videos. Will definitely give you guys a shout out should we become that unicorn 🤗.

[@localbooking6350]

same here!

[@Andylf87]

This was so helpful thanks

[@gfuentes8449]

Awesome vid as always

[@Applf1tech]

Your videos are so insightful, I have learned so much for your channel

[@slidebean]

Glad you like them!

[@BenjaminOrthodox]

This is so helpful!

[@Andylf87]

This was so helpful

[@harishbalaji13]

Awesome content. Thanks for breaking it down so nicely. Also what's the soundtrack at the end of the video, sounds so cool.

[@kingofgoli]

Quality content!

[@KayAtanGod]

I can't even believe this is free. THANKS

[@Karthik57523]

Really awesome. 🙏🙏🙏

[@yorky2002]

Was the cost of this video included in your CAC? It worked for me!

[@HarshWaghchaure]

Really very help full video

[@ash283880]

Sorry to call this out. It's beginning not beggining. I am surprised you guys didn't catch it before you uploaded.

[@srinivasshetti9451]

As always Awesome 👌 You are 2 good. Can you suggest software to measure KPI

[@uzair004]

There should be written version of this video. Any pdf, blog post would be great.

[@dariannwankwo9126]

Just a note, the formula for Net MRR Churn used Reactivation ARR, when I believe it should be Reactivation MRR. This is consistent with the other metrics used in the formula and the reactivated customers bringing in $169 in MRR.

[@jith9918]

Most awaited video

[@slidebean]

We hope the wait was worth it 😉

[@jith9918]

@@slidebean yep. Lots of love from INDIA

[@TechMarketer]

Thank you very much for this. In what software you prepare animation to the video?

[@khalidal-masry3350]

Thank you for loads of info. Is it right that those metrics are suitable for SaaS only, not Marketplaces, where the revenue is a percentage of the vendors' revenue?

[@jd5787]

The issue comes when you bill 1 year upfront: you get cash today, deferred revenue balances goes up and smooth revenue growth. So saas can have great ARR growth but erratic cash flows.

[@AndiAbrudan]

I hate how companies look at their clients as datapoints. I understand the need and the usefulness of KPIs, but it still grinds my gears. It gets creepier and creepier the larger the company is. Don't want to subtract from the quality of the video, which is top notch.

[@jatipikukuh5992]

Hi caya, I am interested with SaaS metrics, could you provide how Slidebean monitor the retention on users usage?

[@kartikposhattiwar31]

There is one big doubt. In the Net MRR Churn calculation at 12:22, the formula reads "Reactivation ARR" but actually considers MRR in the calculation. Is this a typo or do we actually take ARR?

[@andredavilaljj]

Wow! Great!!!! Just a doubt. 12:22 --> Net mrr formula. All KPIs are with MRR on the side, except reactivation that is ARR. Shouldn't suppose to be MRR to? Thx!!!

[@Lowkeyyshorts]

One of your time stamps don’t appear on the video. I think you may have typed it wrong at 4:12

[@kocokan]

Do we have to track all of these metrics or just focus on, say, choose 3 metrics?

[@shiprapansari5587]

Gold✨

[@yungbillionire]

Hi Caya or whoever is in charge of managing KZbin comments ... But I'm working on this idea I have and I've been researching a lot about startups so I'm not sure whether to get a patent first, or should I get market validation and be like the lean Startup .. when did you get your patent for you product/services if you have one that is ? Any reply us greatly appreciated as I know you are really busy 😊.

[@alexalvarado7629]

This video is great! I have a question: In your Lifetime example, right after Churn explanation, you mentioned that 100 customers with 10% churn would give us an average 10 month Lifetime, but how do we connect this 10 month average with the fact that at this rate we will have 31 customers after 12 months and 9 after 24 months? If I average the number of customer in 45 months it is 22

[@rossomela18]

Hey Alex, if you are still confused, I could send you an excel showing how/why. Let me know.

[@romahasija2895]

Just wanna understand how we are defining lost customer and lost MRR. If a customer cancels in between or a customer does not re subscribe. I am clear with downgrading the plan is also a lost revenue but not a lost customer.

[@martijnprinzen7124]

Great video, I'd put in a referral link if you're running an affiliate, instead of making people google though.

[@theshimmer]

Who has an idea on what software he used in measuring the statistics

[@1Digrok1]

How do you activate the code for Chart Mogul? I don't see the input field.

[@schoolKit22]

saviour

[@jesset55]

What is the best KPI dashboard tool?

[@micahsparks6104]

Wonder what the software is called you are using

[@micahsparks6104]

Nm gotta watch full video. Chartmogul looks amazing

[@slidebean]

@@micahsparks6104 We are a big fan ;)

[@petetalbert]

What's the software in the examples?

[@JawnLam]

Why is the camera tilted??

[@sotacan]

Really curious if MRR is a good metric for an online marketplace. If its a marketplace where sellers should continue to sell and buyers continue to buy (not all marketplaces share this characteristic) then It sounds like it makes a lot of sense. Otherwise i'm still curious on what metrics a marketplace should track (kinda a founder of one thats launching next month

[@dobrinstoilov]

If you're operating the marketplace, then you should track the total $ amount of transactions per day/week/month (aka gross merchandise volume - GMV). THen figure out how to get a % from that. Then figure out how to grow the GMV so that you grow your revenue :)

[@arielle-cheriepaterson7851]

Hi Caya, what is this software are you using to track your metrics?

[@slidebean]

Chart Mogul!

[@AshishRaj-zv8nc]

whats the software used at 3:26 ?????

[@HabibiGone]

Would Amazon prime be considered Saas?

[@HabibiGone]

Also thank you for the content!

[@angelmaravilla4708]

This is amazing!!, Just one doubt: Considering the example of an “IT Consulting company”; how do you include in the MRR metric the earnings of “it projects” (software and applications developments, etc) that have a duration of 3, 7 or 24 months?? I mean, I could divide the “Total Contract Value (TCV)” between 12, but after 7 months, when the project had been finished and total payments had been done, I would have to register a “Churn”, but this would be incorrect! I would have only taken into account 58% of income (7 months out of 12)… the other option is to divide the TCV between 12 and register the Customer Churn 5 moths later t 5 months after the actual departure date, but this would make an unreal MRR metric… I really hope you could help me!

[@ubervincent]

You should not do that because your metric doesn't reflect how your cash flows into the business. Look up metrics for consulting companies

[@angelmaravilla4708]

@@ubervincent yep, that's correct

[@ajthevillageidiot]

Based on the words on the thumbnail, I thought you were about to 'sing' Gucci Gang

[@kayondoedward]

how can i add the coupon on chartmogul

[@nickfzx]

I have adjusted your trial account, the Coupon field should now be visible during checkout.

[@EPIONIX]

I like your honest way. Though your face looks like you are bored 😂

[@aprilmintacpineda2713]

I just thought of a question, what if you offered your app for free for 3 months, then you released a plan, will the free period affect these metrics? will we consider the accounts created during that period as "customers"?

[@KaneryU]

Me as a randome 15 year old: Why do I enjoy watching this??

[@ehsanhasin8092]

waiting...

[@ANANTmittal100]

Lots of Indians are here, I guess maybe cause of shark tank India launch more and more people are searching for startup videos or something like that.

[@LFPS0311]

Is he... back from the mountains? Or was this before he left?

[@TESkyrimizer]

Ah yes I know some of these words. nope i lied.

[@jsedlacekjr]

Who’s the guy who made the slides and doesn’t know how to spell the word “beginning” 🤣

[@Eline_Meijer]

is he on drugs?