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Top SaaS Metrics Every Startup Should Track (MRR, CAC, LTV & More)

Learn the top SaaS metrics every startup should track — from MRR and CAC to churn and LTV. Plus, discover SaaS tools to track them and grow your business profitably.

Why SaaS Metrics Matter?

Running a SaaS startup without tracking metrics is like flying blind. Sure, you might get lucky for a while — but eventually, you’ll run out of cash or customers.

Metrics aren’t just numbers on a dashboard. They tell you:

  • If your growth is sustainable.

  • Whether customers are sticking around.

  • How efficiently you’re spending money.

  • If your SaaS is investor-ready.

And here’s the good news: tracking these numbers isn’t rocket science. With the right tools, you can automate most of it (I’ll drop some tool suggestions along the way 👇).

1. Monthly Recurring Revenue (MRR)

MRR = predictable subscription revenue you earn every month.

  • Why it matters: The heartbeat of SaaS. Investors love seeing MRR grow steadily.

  • Formula:
    MRR = Total Paying Customers × Average Revenue per Account (ARPA)

💡 Pro Tip: UseFreshBooks or QuickBooks Online to automate monthly revenue tracking and export reports instantly.

2. Customer Acquisition Cost (CAC)

CAC is how much you spend to get one new customer.

  • Why it matters: If it costs you more to acquire a customer than they’ll ever pay you (LTV), you’re burning money.

  • Formula:
    CAC = (Sales & Marketing Spend ÷ New Customers Acquired)

💡 Keep CAC low by focusing on organic growth first. SEO tools like Semrush let you rank for keywords your competitors pay ads for.

3. Customer Lifetime Value (LTV)

LTV shows how much revenue a single customer brings before they churn.

  • Why it matters: Higher LTV means customers are sticking, upgrading, and happy.

  • Formula:
    LTV = ARPA × Gross Margin × Average Customer Lifespan

👉 Rule of thumb: Aim for an LTV:CAC ratio of at least 3:1.

💡 Boost LTV with email nurturing — platforms like ConvertKit are perfect for automating retention campaigns.

4. Churn Rate

Churn = the percentage of customers or revenue lost over time.

  • Why it matters: Even if you grow fast, high churn will sink you.

  • Formula:
    Churn = (Customers Lost ÷ Customers at Start) × 100

💡 Visualize churn in dashboards (try Notion templates or HubSpot CRM for free).

5. Net Revenue Retention (NRR)

NRR measures whether your existing customers are expanding or shrinking their spend.

  • Why it matters: NRR >100% means your current customers are driving growth even without new signups.

💡 Product-led SaaS companies (like Slack, Notion) rely heavily on strong NRR to scale.

6. Gross Margin

Gross margin = revenue left after subtracting hosting, support, and infrastructure costs.

  • Why it matters: SaaS usually enjoys 70–90% gross margins, which means more cash to reinvest.

7. Burn Rate & Runway

Your burn rate = how much cash you’re losing each month. Runway = how long before the cash runs out.

  • Why it matters: Every founder needs to know this for survival (and investor calls).

💡 Use Wise to reduce international payment fees — stretching your runway further.

8. Activation Rate

Activation measures how many new users hit their “aha!” moment (like setting up their first project).

  • Why it matters: High activation = low churn risk.

💡 Track activation journeys in HubSpot to see where users drop off.

9. Customer Retention Rate (CRR)

Retention = the percentage of customers who stick around over time.

  • Why it matters: It’s 5x cheaper to retain a customer than to acquire a new one.

  • Formula:
    CRR = ((Customers at End – New Customers) ÷ Customers at Start) × 100

💡 Keep retention strong with personalized onboarding emails via ConvertKit.

10. ARPU (Average Revenue per User)

ARPU = total revenue ÷ total users.

  • Why it matters: Shows how much value you’re extracting from each customer segment. Great for testing pricing strategies.

>> Final Thoughts

SaaS success isn’t luck — it’s about measuring the right numbers and acting on them.

  • Early-stage startups should obsess over MRR, CAC, and activation.

  • Scaling startups need to watch NRR, churn, and LTV:CAC ratios.

👉 Don’t overwhelm yourself by tracking everything at once. Pick a few key SaaS metrics, monitor them weekly, and let them guide your next growth moves.

And if you want to make tracking easier? Try tools like FreshBooks, Semrush, and ConvertKit. They’ll save you time, money, and headaches.