Key metrics for B2B SaaS companies – Steven Hoffmann

SaaS B2B companies stopped being a new trend a long time ago, and are now a reality. However, with the exponential growth of this segment, there is a risk of market saturation. Therefore, in such a competitive and risky environment, it is essential to measure the growth of your company and monitor the competition to ensure the good performance of your business.


Check out some of the main metrics explained by  Steven Hoffmann, Founder of Newt Financial, which will help you monitor the performance of your strategies and determine your company's next steps.

1. Customer turnover rate (Customer Churn Rate)

The customer turnover rate measures how many deals you've lost in a given period of time. While turnover is a reality, tracking it can save your business from disaster. Therefore, it is one of the most important metrics for tracking the vitality of your B2B SaaS.

To calculate the rate of lost customers, divide the number of lost customers by the total number of customers in a given period. The net customer gain is calculated by removing the number of lost customers from the total number of new customers in the same period.

2. Revenue Churn Rate

Measuring revenue turnover alongside customer turnover is extremely important to calculate the financial value that your revenue base leaves each period. To perform this calculation, the same formula as above is used, but based on the total value of the contracts instead of the total number of customers.

3. Customer Lifetime Value (CLV)

It is the metric that indicates how much each customer, on average, generates financial value for the operation. The lower your Churn, the higher your CLV, as the customer spends more time paying. The metric provides companies with an accurate representation of their growth.

4. Customer Acquisition Cost (CAC)

It shows exactly how much it costs to acquire new customers and how much value they bring to your business.

5. CLV-CAC ratio

The ratio between CLV and CAC shows how much each customer generates of real value for its operation, less the investments in its acquisition. This metric shows the degree of effectiveness of your Marketing plan, indicating whether it is necessary to change campaign strategies.

6. Months to recover CAC

Now that you know how much each customer generates in return, you also need to know how long it takes for the amount invested in acquiring a customer to return to your company. Divide CAC by the product of recurring monthly revenue (MRR) and your gross margin (gross revenue - cost of sales): CAC / MRR x GM.

7. Customer engagement score

You also need to keep an eye on a customer's average engagement with your service over time.

8. Lead acquisition cost (Lead Acquisition Cost)

Analyzing the relationship between investing in different platforms and converting leads on your website is essential to measure which channels are really effective and are worth the investment. For Outbound Marketing, the calculation is made by dividing the total personnel and operating costs by the number of leads generated.

About Steven Hoffmann

Steven Hoffmann is Chairman and CEO of Newt Corporation – the company that provides Digital Wallets, POS, and Prepaid Products in a white label platform.

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