SaaS Metrics Dashboard: The Essentials for Growth Companies
When scaling a SaaS business, choosing the right metrics can be overwhelming. With so many options, how do you know which ones truly matter? If you're an early-stage or growth-stage company (£0.1M-£5M ARR), this guide will help you focus on the most relevant metrics to track progress effectively.
Why This Matters
Successful companies grow more effectively when they use the right data to drive decision-making. However, with so many potential metrics to track, it can be difficult to identify the most relevant ones. If you are in the growth phase, you need a mix of leading and trailing indicators, focusing on both short-term and long-term performance.
Leading Indicators
Leading indicators help predict future performance. For a growing SaaS company, the most critical ones include:
Customer Satisfaction (CSAT) – More reliable than Net Promoter Score (NPS) for companies with fewer than 200-300 customers. NPS with a small cohort of customers overamplifies signals, and you won’t be able to find the trend.
Top of Funnel:
Acquisition: How many new customers are you attracting?
Activation: Are new users engaging with your product?
Cost of Customer Acquisition (CoCA): How much are you spending to acquire new customers?
Lifetime, Satisfaction and Growth Metrics:
Engagement: Predicts churn by tracking active usage.
Churn: Track both customer churn (number of customers lost) and MRR churn (revenue lost due to churn).
Rate of Revenue Growth: Is revenue growth accelerating or slowing? This differs from simply tracking MRR.
Referrals: Organic growth through happy customers.
Trailing Indicators
Trailing indicators confirm past performance and financial health:
Net Revenue Retention (NRR):
Formula: (MRR at the beginning of the period + upsell + growth – contraction - churn) / MRR at the end of the period.
Aim for >100% for smaller (<=£2M ARR) companies and at least 70% for larger growth companies (£2M+ ARR).
Burn Multiple:
Formula: 12 months net cash burn / new ARR added.
As a company matures, spending should decrease while MRR/ARR growth remains strong.
Cash Runway:
Formula: Cash at hand / monthly burn rate.
Metrics to Watch Out For in Smaller Growth Companies
Some commonly used SaaS metrics may not be particularly useful for early-stage businesses:
LTV (Lifetime Value): Hard to measure accurately for companies with multi-year contracts and no renewals yet. This is a very useful metric, but hard to accurately measure for smaller growth companies. Ideally, LTV should be 3x the cost of customer acquisition (CoCA)
Acquisition Payback time: If you can calculate a CoCA (see above), the payback time for the CoCA should be less than 12 months.
NPS (Net Promoter Score): With fewer than 200-300 customers, small changes can cause large fluctuations. CSAT provides more actionable insights.
Rule of 40: Formula: ARR growth over 12 months + EBITDA margin. Target: 40 %+, indicating either rapid growth with low profitability or steady growth with strong margins.
However, in early-stage companies, fluctuating ARR can make this metric unreliable.
Building a Balanced Dashboard
A well-structured dashboard provides clarity and ensures focus on what matters. Here’s how to structure it:
Select Core Metrics: Choose no more than 10-15 metrics that align with your growth strategy.
Track Trends Over Time: Focus on trends rather than individual data points.
Use Visualisation Tools: A simple spreadsheet or business intelligence tool can make insights easier to digest.
Compare Against Industry Benchmarks: Ensure your numbers align with similar SaaS businesses.
Adjust as You Scale: Your key metrics will evolve as you grow; revisit them quarterly.
The Golden Rule: Less is More
A well-structured dashboard should focus only on the key metrics driving growth. If you're tracking too many, you may be unclear about your true business drivers. Focus on what matters most to scale effectively. Simplicity ensures you can act decisively and pivot when necessary.
Conclusion
Measuring the right metrics is crucial for scaling your SaaS business effectively. The key is balancing leading and trailing indicators while avoiding misleading or overly complex metrics. A structured dashboard ensures clarity, allowing you to make data-driven decisions with confidence.
By focusing on a handful of well-chosen metrics, you can maintain agility, spot risks early, and double down on what’s working. The right data will empower you to grow faster, adapt smarter, and build a resilient SaaS business in an ever-changing landscape.