Slides from the webinar with You Mon Tsang and Dave Kellogg discussing SaaS metrics including gross dollar retention, net dollar retention, lifetime value, customer acquisition cost, LTV/CAC and various benchmarks for those metrics from the KeyBanc annual SaaS survey.
3. Recurring Revenue (ARR / MRR)
Recurring Revenue is the total value of your subscriptions at the end of the period (monthly or
annual).
• MRR: Monthly Recurring Revenue
• ARR: Annual Recurring Revenue
4. Logo Retention Rate
Logo Retention Rate =
# of Customers at end of the period
# of Customers at start of the period *
* Do not include new customers added in this period
5. Logo Retention Rate v2
Logo Retention Rate =
# of Customers at renewed
# of Customers up for renewal *
6. GRR: Gross Revenue Retention
GRR =
Recurring Revenue at Start of Period - Churn –
Contractions
Recurring Revenue at Start of Period *
* Do not include new customers added in this period
7. NRR: Net Revenue Retention
NRR =
Recurring Revenue at Start of Period - Churn –
Contractions + Expansion
Recurring Revenue at Start of Period *
* Do not include new customers added in this period
8. LTV: (Customer) Lifetime Value
LTV
=
Average Recurring Revenue Per Customer x
Customer Lifetime
Customer Lifetime =
1
Customer (Logo) Churn
Rate
Seeding Questions:
We just spent time talking about CS metrics and there are a bunch! For companies that are brand new to CS, which one or two metric would you have them focus on?
What do boards and investors care about?
Some of these metrics are controversial. And I think we ought to warn some of our viewers of its controversy. Which one(s) do you find to be the trickiest to talk about?
Metrics overload
I have a mature CS team that I need to keep focused and too many metrics is overload. What should I have them focused on?
Let’s talk about Net Revenue Retention (NRR). It’s a metric that is getting its day in the sun. Although I think it is a lasting metric that will never going away.
My first question is what I get asked ALL THE TIME. What is a good NRR? Do you believe the chart I showed earlier for the range?
How should I think about it given my go-to-market motion? SMB vs mid-market vs enterprise? Tools vs application?
Let’s look at history.
I think it’s taken a surprisingly long time for these metrics to gain awareness. Why do you think that is?
Looking to the future
What are your thoughts on how these SaaS and CS Metrics evolve?