Jan 31, 2022
Metrics for B2B SaaS
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
Here are the key metrics for B2B SaaS startups:
Committed Annual Recurring Revenue (CARR) - this shows the overall health of the business as it includes new users as well as churn.
To calculate, take the current ARR and add new bookings and upsells and subtract downgrade bookings and churn.
Net dollar retention - this shows the growth net of churn which is an indicator of motion in the business.
To calculate, take the month’s revenue accounting for upgrades, downgrades, and churn, and divide by the previous month’s revenue.
Net new logos - indicates new company growth.
To calculate, add up the number of new companies onboarded in a month.
Quota attainment - what percentage of sales reps make quota in a period of time.
To calculate, divide the number of sales reps achieving quota by total number of sales reps.
CAC payback - the number of months of revenue to pay back for the cost of customer acquisition.
To calculate, divide sales and
marketing cost by net new ARR, times gross margin.
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