Whether you’re bootstrapping your software solution or scaling with outside funding, understanding your numbers is key to sustainable growth.
At Delta Systems, we help SMBs build, scale, and optimize their SaaS platforms, not just with code, but with clarity.
Here are the most important SaaS metrics every small and mid-sized business owner should track to stay competitive and profitable.
1. Monthly Recurring Revenue (MRR)
What it is: MRR is the predictable revenue your SaaS business earns each month from active subscriptions.
Why it matters: MRR is the heartbeat of any SaaS company. It tells you if your recurring revenue is growing, flatlining, or declining, giving you the insight needed to plan marketing, development, and staffing.
Formula:
MRR = Number of customers x Average monthly subscription price
2. Customer Acquisition Cost (CAC)
What it is: CAC measures how much you spend to acquire a single customer.
Why it matters: If it costs $500 to land a customer who only brings in $300, you’re burning cash. Knowing your CAC helps you evaluate marketing efficiency and sales strategies.
Formula:
CAC = Total marketing & sales spend / Number of new customers
Red flag: CAC creeping up while revenue per customer stays flat is a sign to reassess your go-to-market tactics.
3. Customer Lifetime Value (CLTV)
What it is: CLTV is the total revenue you expect to earn from a customer over the duration of their relationship with your product.
Why it matters: CLTV helps you determine how much you can afford to spend to acquire customers and still turn a profit.
Formula:
CLTV = Average monthly revenue per user x Average customer lifespan (in months)
Target ratio: A healthy CLTV:CAC ratio is typically 3:1 or better.
4. Churn Rate
What it is: Churn is the percentage of customers who cancel their subscription in a given time period.
Why it matters: High churn is the silent killer of SaaS businesses. It limits growth and puts pressure on acquisition teams to constantly replace lost users.
Formula:
Churn rate = (Lost customers during period / Total customers at start of period) x 100
5. Net Revenue Retention (NRR)
What it is: NRR shows how much revenue you retain from your existing customers, including upsells, expansions, and downgrades.
Why it matters: NRR over 100% means your existing customers are growing in value, a major indicator of product-market fit and customer satisfaction.
Formula:
NRR = (Starting MRR + expansion MRR – churned MRR – contraction MRR) / Starting MRR
Goal: Strive for 100–130% NRR for long-term growth.
6. Active Users (DAU, WAU, MAU)
What it is: Daily, weekly, and monthly active users (DAU, WAU, MAU) track product engagement.
Why it matters: These metrics show whether users are actually using your product and getting value from it, which ties directly into retention and referrals.
Watch for: High signup numbers with low active usage is a red flag for onboarding or UX issues.
7. Burn Rate & Runway
What it is: Burn rate is how much money your business spends each month. Runway is how many months you have before funds run out.
Why it matters: Whether you’re self-funded or backed by investors, cash management is critical. These metrics help you know when you need to cut costs or raise more capital.
Formula:
Burn rate = Monthly expenses – Monthly revenue
Runway = Current cash / Burn rate
8. Conversion Rate
What it is: Conversion rate tells you how many of your leads turn into paying customers.
Why it matters: Whether you offer free trials or product demos, this metric shows how well your product and funnel are converting interest into revenue.
Formula:
Conversion rate = (New customers / Total leads) x 100
9. Support Ticket Volume & Response Time
What it is: Tracks how many support tickets are coming in and how quickly they’re resolved.
Why it matters: A spike in tickets can signal product issues, while long response times frustrate users. Together, these metrics affect churn and customer satisfaction.
10. Product Usage Metrics
Examples: Feature adoption, average session length, time to first value.
Why it matters: These insights show how well your users are engaging with key features, which features drive retention, and where users get stuck.
SaaS Metrics Only Matter If You Act on Them
SaaS metrics are more than just numbers: they’re decision-making tools. They help you know where to invest, when to pivot, and how to grow. But they only work if you track them consistently and build systems around improving them.
At Delta Systems, we help SaaS companies not only develop robust software, but build it around scalable, metric-driven growth. Whether you’re starting from scratch or scaling your platform, our team can integrate the tools you need to track what matters and grow with confidence.
Let’s Talk SaaS Growth
Need help building or optimizing your SaaS platform with metrics that matter?
Contact Delta Systems for a free project scope and let’s make your data work for you.