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SaaS Metrics for company review

Rick Bigelow's Profile

Does anyone have a SaaS metrics package that they can share?  I am looking to create a package that can be used to analyze the performance of the company and also board presentation.

MRR - Monthly Recurring Revenue

Cost of Service

LTV

Customer Acquisition Costs

Retention Rate

What other metrics should be tracked and analyzed? 

Thanks in advance for your help.

 

Rick

 

Answers

Joseph Drago
Title: CFO
Company: Non-profit
(CFO , Non-profit) |

what kind of business are you in?

Rod O'Connor
Title: VP & CFO
Company: Reeher LLC
(VP & CFO, Reeher LLC) |

If you haven't already I would check out the following resources.

Download Bessemer's Top 10 Laws of Cloud Computing and SaaS at http://www.bvp.com/cloud

Also, check out Pacific Crest's Private SaaS Company report at http://www.pacificcrest-news.com/saas/Pacific%20Crest%202011%20SaaS%20Workshop.pdf. This is very helpful for reporting and comparing performance.

Demonstrating the financial picture of a SaaS company with annual billing cycles and three year contracts can be very different then looking at a company with a monthly billing cycle and a 30 day out on all the contracts.

The metrics outlined in Bessemer's report are very valuable and allow you to compare against other sources of information like those in the Pacific Crest report. In regards to the most important metrics that are important for your business I think it depends on the number of customers you have, length of typical contract term, billing cycle, implementation timeline, and to what extent professional services are bundled into the annual contract. Those variations make a difference in how you tell the story accurately.

Per Larson
Title: Managing Partner
Company: 10:1 Capital
(Managing Partner, 10:1 Capital) |

Bessemer's is great - I haven't read Pacific Crest before, but certainly will now.

You've got the core metrics, but I would advise showing trends in those metrics over time versus a one time snapshot. Increase/decrease in MRR, LTV, and retention rate over time are obviously important to understand. To that end, if you can track cohorts of clients over time to see what combo of marketing activities led to their becoming a customer, you can get a truer picture of customer acquisition costs vis-a-vis that cohort's LTV.

Topic Expert
Doug Thompson
Title: Director of Revenue
Company: Castlight Health
(Director of Revenue, Castlight Health) |

here is a good reference
http://www.forentrepreneurs.com/saas-economics-1/

Marla Mathews
Title: Controller
Company: Symform
(Controller, Symform) |

I agree with Per and Rod, Bessemer is a great resource. I also found the Chaotic Flow by Joel York useful. Here is the link:

http://chaotic-flow.com/saas-metrics-guide-to-saas-financial-performance/

Enjoy

Topic Expert
Donald Koscheka
Title: Principal
Company: Bluecloud Communications
(Principal, Bluecloud Communications) |

Rick - consider metrics like:
Downtime - duration and frequency, Recovery time (time to recover from an outage), Recovery Points (point where data is recovered from an outage). These will affect customer satisfaction.

Also, server (technically, capital) utilization - if you buy 10 servers and each is capable of handling 10 tenants but you only have 20 tenants, then your server utilization is 20% (20/10*10). You'll also want to track FTE per server and FTE per tenant - specifically to track your support costs.

Also, track CPU vs. Network vs. Storage utilization - this will give you a read on how your users are using your services and which of these you need to focus on (for example, if you build a file sharing system, storage utility will likely be your highest factor, if you are building an accounting system, CPU will most likely be the driving point).

You should also track number of unique user visits, session duration (in short, typical web analytics).

Don

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