SaaS Metrics That Actually Matter: An Operator's Guide to What We Track

May 1, 2025

by Angela, Finance & HR

After building and operating 15+ Laravel SaaS applications, we've learned that most companies track too many metrics and focus on the wrong ones. Here are the 12 metrics we actually use to run our Laravel-based businesses, make decisions, and predict what's coming next.

The Vanity Metrics Problem

Most SaaS dashboards are filled with metrics that feel important but don't drive decisions:

Total users (doesn't predict revenue)
Page views (doesn't correlate with engagement)
Feature adoption (unless it drives retention)
Social media followers (rarely converts to customers)

We learned this lesson with our first product. We celebrated 10K signups while hemorrhaging money because our activation rate was 12% and our churn rate was 15% monthly.

The 12 Metrics That Actually Matter

Revenue Health (The Big Picture)

1. Monthly Recurring Revenue (MRR) Growth Rate Not just MRR—MRR growth rate tracked in our Laravel analytics dashboard. We track:

New business MRR
Expansion MRR (upsells/cross-sells)
Contraction MRR (downgrades)
Churned MRR

// Laravel MRR calculation using Eloquent
class MRRCalculator
{
    public function calculateGrowth($month)
    {
        $current = Subscription::whereMonth('created_at', $month)
            ->sum('monthly_amount');
        
        $expansion = Subscription::whereMonth('upgraded_at', $month)
            ->sum('upgrade_amount');
            
        $contraction = Subscription::whereMonth('downgraded_at', $month)
            ->sum('downgrade_amount');
            
        $churn = Subscription::whereMonth('cancelled_at', $month)
            ->sum('monthly_amount');
        
        return [
            'new_business' => $current,
            'expansion' => $expansion,
            'contraction' => -$contraction,
            'churn' => -$churn,
            'net' => $current + $expansion - $contraction - $churn
        ];
    }
}

Why it matters: This single metric tells you if your business is accelerating, stable, or declining.

Top tip

Segment MRR growth by customer size. We track SMB, Mid-Market, and Enterprise separately because they have completely different dynamics and predictability.

2. Annual Contract Value (ACV) by Segment We track ACV distribution across customer segments:

SMB: $1K-$10K ACV
Mid-Market: $10K-$100K ACV
Enterprise: $100K+ ACV

Why it matters: Higher ACV customers have different churn patterns, support needs, and growth trajectories.

Customer Health (Leading Indicators)

3. Net Revenue Retention (NRR) Our north star metric. Measures revenue expansion from existing customers:

NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR

Across our portfolio:

CasePilot: 118% NRR (healthcare customers expand predictably)
Equisend: 125% NRR (marketing teams buy more features)
Orderbase: 108% NRR (e-commerce growth drives usage)

Why it matters: NRR above 110% means your existing customers are growing your business even without new acquisitions.

4. Gross Revenue Retention (GRR) Measures churn and downgrades without expansion:

GRR = (Starting MRR - Churn - Contraction) / Starting MRR

We target GRR above 90% for all products. Below 85%, we audit the product-market fit.

5. Customer Health Score We built a composite health score based on:

Product usage frequency (daily/weekly/monthly)
Feature adoption breadth (% of features used)
Support ticket volume and type
Payment status and billing history
Engagement with onboarding and success content

// Simplified health score calculation
function calculateHealthScore(customer) {
  const usage = customer.dailyActiveUsers / customer.totalSeats;
  const features = customer.featuresUsed / totalFeatures;
  const support = Math.max(0, 1 - (customer.supportTickets / 10));
  const billing = customer.paymentOnTime ? 1 : 0.5;
  
  return Math.round((usage * 0.4 + features * 0.3 + support * 0.2 + billing * 0.1) * 100);
}

Customers scoring below 70 get proactive outreach from our success team.

Growth Efficiency (Unit Economics)

6. Customer Acquisition Cost (CAC) by Channel We track CAC for every acquisition channel:

Organic search: $150 CAC
Paid search: $280 CAC
Content marketing: $95 CAC
Referrals: $45 CAC
Direct sales: $1,200 CAC (but higher ACV)

Why it matters: Helps allocate marketing spend to the most efficient channels.

7. CAC Payback Period Time to recover customer acquisition costs:

CAC Payback = CAC / (Monthly Recurring Revenue per Customer * Gross Margin %)

We target under 18 months for SMB, under 24 months for Enterprise.

8. Lifetime Value to CAC Ratio (LTV:CAC)

LTV = (Average Monthly Revenue per Customer * Gross Margin %) / Monthly Churn Rate
LTV:CAC Ratio = LTV / CAC

Target ratios by segment:

SMB: above 3:1 (need quick payback)
Enterprise: above 5:1 (longer sales cycles, higher retention)

Operational Efficiency

9. Gross Margin by Product Critical for understanding true profitability:

CasePilot: 87% gross margin

High margin due to AI automation
Main costs: AWS compute, data processing

Equisend: 92% gross margin

Very high margin SaaS model
Main costs: translation APIs, email delivery

Orderbase: 76% gross margin

Lower due to transaction processing fees
Main costs: payment processing, carrier APIs

10. Monthly Active Users (MAU) to Paying Customer Ratio Measures product stickiness and freemium efficiency:

MAU:Customer Ratio = Monthly Active Users / Paying Customers

Higher ratios indicate either strong viral/network effects or inefficient freemium conversion.

Leading Indicators (Predictive Metrics)

11. Pipeline Velocity For our sales-driven products, we track:

Pipeline Velocity = (Qualified Leads * Win Rate * Average Deal Size) / Sales Cycle Length

This predicts revenue 3-6 months in advance.

12. Product-Market Fit Score Based on Sean Ellis's test: "How disappointed would you be if you could no longer use this product?"

Above 40% "Very disappointed": Strong PMF
25-40%: Some PMF, room for improvement
Below 25%: Weak PMF, major changes needed

We survey customers quarterly and track this religiously.

How We Actually Use These Metrics

Monthly Business Reviews

Each product gets a 30-minute review focusing on:

MRR growth trajectory - are we accelerating or decelerating?
NRR and GRR trends - is customer success improving?
Customer health distribution - how many customers are at risk?
Unit economics - are we becoming more or less efficient?

Weekly Operational Reviews

Quick tactical reviews focusing on:

Pipeline velocity and deal progression
Customer health score changes
Support ticket trends and resolution times
Product usage patterns and feature adoption

Quarterly Strategy Sessions

Deep dives using all metrics to answer:

Should we double down on growth or optimize unit economics?
Which customer segments should we prioritize?
What product investments will drive the biggest impact?
Are we ready to scale marketing spend?

Red Flags We Watch For

Revenue Red Flags:

MRR growth rate declining for 2+ months
NRR dropping below 105%
CAC payback period increasing

Customer Red Flags:

Over 25% of customers scoring below 70 health score
Support ticket volume increasing over 20% month-over-month
Feature adoption rates declining

Operational Red Flags:

Gross margins declining (indicates scaling problems)
Pipeline velocity decreasing (predicts future revenue issues)
PMF score dropping below 35%

Tools and Infrastructure

Our Metrics Stack

Revenue: ChartMogul for subscription analytics
Product Usage: Mixpanel for event tracking
Customer Health: Custom dashboard built on our data warehouse
Sales Pipeline: Salesforce with custom reporting
Operational Metrics: Custom Grafana dashboards

Data Architecture

Product DBs → ETL Pipeline → Data Warehouse → Analytics Tools
     ↓              ↓              ↓              ↓
Operational    Transform &     Single Source    Business Intelligence
    Data        Normalize       of Truth           & Reporting

All metrics update in near real-time with 15-minute refresh cycles.

What We Learned from 15+ Products

Metrics Evolve with Business Stage

Early Stage (Pre-PMF): Focus on usage and retention Growth Stage (Post-PMF): Focus on unit economics and scalability
Scale Stage (Mature): Focus on efficiency and market expansion

Industry Matters

Healthcare SaaS (CasePilot) has different benchmarks than E-commerce (Orderbase):

Healthcare: Higher ACV, longer sales cycles, lower churn
E-commerce: Lower ACV, faster growth, more price sensitivity

Segment Your Metrics

We learned to segment every metric by:

Customer size (SMB/Mid-Market/Enterprise)
Acquisition channel
Geographic region
Product usage tier

The Bottom Line

After running 15+ SaaS businesses, we've learned that less is more when it comes to metrics. These 12 metrics give us everything we need to:

Understand business health
Predict future performance
Make data-driven decisions
Optimize for sustainable growth

Most importantly, we actually use these metrics in every business decision. If a metric doesn't drive action, we stop tracking it.

The goal isn't to have perfect metrics—it's to have metrics that make your business more predictable and your decisions more informed.

Want help setting up metrics that actually drive your SaaS business? We've implemented these systems across 15+ products. Let's talk about your analytics strategy.