Office Cheat Sheet: Key Metrics for SaaS Development and Any Online Business

The service team Carrot Quest has prepared the most useful cheat sheet. Carrot Quest is a service that collects key information about each visitor to your site and, on its basis, helps to bring each user to the purchase, both manually and automatically. At the end of the article everyone will find a nice bonus.

In this cheat sheet are collected key metrics that you need to keep track of, well, if you are a SaaS service, of course.
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Although some of these indicators are suitable for the entire online business. For example, the calculation of the effectiveness of the promotion channel.

1. Monthly Recurring Revenue (MRR) - regular monthly revenue

The most important indicator for subscription services. With a monthly subscription, MRR is simply the price that customers paid for the month of use.



If customers pay more than 1 month (for example, 12 months), you simply divide this amount by the number of months in the subscription period.



2. Annual Recurring Revenue (ARR) is a regular annual income.



3. MRR movement

• NEW MRR (New) - an additional MRR that you received from new customers;
• Expansion MRR (Expanded) - additional MRR from current customers (due to the transition to a more expensive tariff);
• Contraction MRR (Abbreviated) - the MRR that you lost due to switching customers to a cheaper rate;
• Churn MRR (Outflow) - when the user canceled (or did not renew) the subscription;
• Reactivation MRR (Resume) - when “sleeping” users return to a paid subscription.

4. Average Revenue Per Paying User (ARPPU)

ARPPU is revenue per payer. This is the average MRR value for each client.



If the customer has multiple subscriptions, they must be merged into one to calculate ARPPU.



5. Average Revenue Per User (ARPU)

We believe that USER is a site visitor.

ARPU is the revenue per visitor attracted to the site.







6. Customer Acquisition Cost (CAC) - the cost of attracting a customer (paying user)





7. Cost Per Acquisition (CPA) - the cost of attracting a visitor to the site



You can calculate CPA for each channel (contextual advertising, SMM, etc.). So you can identify unprofitable channels and focus on more profitable ones.





8. Average Profit User (APPU) - profit from the attracted visitor

To quickly determine the effectiveness of investments in the promotion or the effectiveness of the channel, it is enough to calculate the difference between the income from the visitor and the cost of his attraction.   



If ARPU is positive, then you are moving in the right direction.



9. Average Sale Price (ASP) - average sale price

ASP is used to measure the effectiveness of the sales team.





10. Customer Churn Rate - customer churn rate



When calculating churn, do not mix subscriptions of different periods, for example, monthly and annual.



11. MRR Churn Rate

MRR Churn Rate. MRR outflow occurs if customers do not renew their subscription or switch to a cheaper rate.



When calculating churn, do not mix subscriptions from different periods. For example, monthly and annual. For start-ups at an early stage of development, the Retention Rate may be more significant for evaluation.



12. Customer Lifetime Value (LTV) - customer income for the entire period of his life in the service

Useful for calculating investments to attract customers.



This is a simplified formula, it can be used in most cases.



13. Customer Retention Rate

Customer retention rate. This is the attitude of those users who have updated the subscription, to all users who have ended the subscription and they had to renew it.





14. MRR Retention Rate

It looks like a Customer Retention Rate, but here we are looking at the MRR retention rate (whether payments for expiring subscriptions are renewed).



Retention may be a better indicator than Churn MRR, since This data is faster and easier to compile.



We hope that this cheat sheet will help you constantly and on the basis of numbers will help you develop your business. With pleasure, the Carrot Quest team