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30 Most Important SaaS Metrics Ranked

Updated: Dec 13, 2022

In this post we are going to rank the Top 30 most important metrics investors care about ranked from 30 to 1 (the most important). We will include a 1 sentencer about each metric at the highest level, but feel free to take the "SaaS-y Metrics" modules to learn more. These metrics are the ones your executive team needs to ensure are best in class and trending in the right direction. That all starts with ensuring at any second you can have visibility into each one of these.

And without further ado.....

Coming in at Number 30....

Number 30: Professional Service to Software Ratio

Services are not as scalable as software.

Number 29: GAAP Revenue

GAAP Revenue has performance from prior quarters that feed into the current quarter making it a poor metric at predicting future performance.

Number 28: New Logo Growth

Continuing to add new customers in a high growth way is important, but less important than ensuring when you do land a customer that you keep them and grow them.

Number 27: New Logos

Having a good base of customers creates a great pipeline of upsell opportunity to work from.

Number 26: Upsell ARR Growth

YoY Upsell Growth is important to ensure you are expanding at your existing customers.

Number 25: Upsell ARR

Upsell ARR is a direct input into the Net $ Retention calculation, so the better this is the better one of the most important metrics in Net $ Retention is.

Number 24: Average Contract Length

Longer contracts help ensure Gross Retention metrics are better.

Number 23: Average Deal Size

In isolation, larger average deal sizes leads to higher ARR as long as it doesn't cause a smaller number of customers to buy and customer concentration issues.

Number 22: Win Rates Over Time

Combines 2 key metrics into one, of "Length of Sales Cycle" and "Win Rate"

Number 21: % of Customers that Expand

To get to consistent Net $ Retention, you need to have many customers expanding, not just a few large expansions.

The Top 20.....

Number 20: Rep Productive Capacity

How much ARR a fully ramped rep will close on average is a key component into having an efficient sales process.

Number 19: Customer Concentration

It is a big red flag when a few customers are driving too much of any metric such as Upsell, New, or Run Rate ARR which creates an unpredictable, highly volatile business.

Number 18: Cohort Logo Retention

As your product gets more mature newer cohorts should start to have better logo retention....

Number 17: Cohort Gross $ Retention

and better $ Retention...

Number 16: Cohort Net $ Retention

and you should be getting better at monetizing customer success.

Number 15: New Business ARR Growth

To grow overall ARR you need to fill the bucket with more and more new ARR...

Number 14: New Business ARR

which will lead to larger new business ARR needing to be closed each quarter....

Number 13: Active Logo Growth

and more customers you need to win each quarter.

Number 12: Active Logos

The more active logos you have the more "upsell" opportunities you have access too.

Number 11: Months to Recover CAC

The quicker you can recover your Cost to Acquire a Customer the more you can reinvest into growth and get to break even on a per customer basis.

Cracking the Top 10 is....

Number 10: Expected Value of Future Pipeline

With the increasing need for predictability in operational metrics you need to be able to predict "Pipeline" that does not exist yet as well as "ARR" that does not exist in the pipeline, if you want to be able to predict your ARR accurately.

Number 9: Expected Value of Existing Pipeline

With the "4x rule" being retired, the new calculation is understanding how much your existing pipeline will turn to ARR in each of the next 4 quarters.

Number 8: LTV to CAC Ration (or Magic Number)

Along with cash burn, this would crack the top 5 in more conservative times, but this is still extremely important in understanding the profitability and efficiency of your business and if you have a viable long term business model.

Number 7: Gross Margin

The love of software is that once you get a customer it should be an extremely profitable business as the variable costs for each added customer should not be large if you have a product that does not rely heavily on professional services.

Number 6: Gross Logo Retention (TTM)

If customers are leaving you this is very indicative of a product issue or lack of value issue....

And the 5 most important metrics that you need to ensure are world class....

Number 5: Gross $ Retention (TTM)

It costs a lot to get a customer, so once you spend the money to acquire them you better be able to retain those $.

Number 4: Net $ Retention (TTM)

Not only do you need to retain the customers, but you need to also be able to grow your existing customer base which leads to software having truly amazing unit economics.

Number 3: Run Rate ARR

While we have shifted to a more conservative market, your company will still be valued at some multiple to your Run Rate ARR.

Number 2: Cash Burn

A year ago this was ranked as number 10, however we are now in a much more conservative market where you better grow responsibly.

And the number 1 metric investors care about is......

Number 1: Run Rate ARR Growth

While growth at all costs is no longer the approach, everyone is still going to first ask you how fast you're growing. Expectations might be tempered, but make no mistake growth still matters.

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