SaaS KPIs and Key Metrics to Measure the Success of Your B2B Company
In a SaaS business model—where scalability and retention are foundational—data isn’t just for reporting. It’s a strategic decision-making tool. Choosing and monitoring the right SaaS KPIs is essential to spot growth opportunities, improve efficiency, and protect long-term profitability.
In this guide, we explain the must-track metrics for B2B companies built around software as a service.
Why are KPIs so important for B2B SaaS companies?
Unlike other models, SaaS businesses don’t rely solely on the initial sale—they rely on a long-term customer relationship. Sustainable growth is not possible without a clear metrics framework that helps you understand what’s working, what isn’t, and what actions to take.
Well-defined KPIs help you:
- Measure the impact of your marketing, sales, and customer success efforts accurately.
- Evaluate the efficiency of your acquisition and retention model.
- Align teams around shared goals through common indicators.
- Optimize processes, resources, and budget based on real data.
In short, KPIs act as a compass that lets you scale with control and predictability.
Core SaaS KPIs for marketing, sales, and growth
1. MRR (Monthly Recurring Revenue)
MRR is the foundational metric for any SaaS business. It represents your recurring monthly revenue and is the best way to track true growth without seasonal distortions or one-off sales.
MRR should be broken down into new revenue, expansion (cross-sell/upsell), and losses from cancellations or downgrades to get a clear view of net performance.
2. CAC (Customer Acquisition Cost)
CAC measures how much it costs to acquire a new customer, including all related marketing and sales expenses. It’s essential for understanding whether your growth strategy is sustainable.
A high CAC isn’t necessarily bad if it is supported by a high LTV. What matters is keeping the relationship between them healthy and optimizing acquisition cost without sacrificing lead quality.
3. LTV (Customer Lifetime Value)
LTV estimates the total economic value a customer generates during their entire relationship with your company. It’s calculated by multiplying average revenue per customer by the average customer lifespan.
This KPI helps determine how much you can invest in acquisition without jeopardizing profitability. In SaaS, an LTV/CAC ratio of at least 3:1 is typically considered healthy.
4. Churn Rate
Churn rate shows the percentage of customers who cancel their subscription in a given period. It’s one of the most sensitive SaaS metrics because high churn can wipe out even strong acquisition efforts.
It’s recommended to separate customer churn from revenue churn (MRR churn), since losing one large account can have a bigger impact than losing several smaller ones.
5. User Activation
Activation measures the percentage of users who reach the key value moment (the “aha moment”) after signing up or subscribing. This metric is directly tied to retention and product usage.
Each company must define activation based on its product. It could be completing a critical task, configuring a feature, or generating the first tangible outcome.
6. Lead-to-Customer Conversion Rate
This KPI measures how efficiently your sales funnel converts qualified leads into paying customers.
A low conversion rate can indicate friction in the sales process, poor segmentation, or misalignment between what marketing promises and what sales delivers.
7. MQLs and SQLs
The difference between Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs) is critical for aligning marketing and sales.
Tracking how many marketing-generated leads become real opportunities—and how they progress through the pipeline—helps improve campaign quality, optimize resources, and shorten the sales cycle.
Strategic complementary metrics
ARPU (Average Revenue Per User)
ARPU helps assess profitability per account and identify upsell opportunities or pricing segments that need adjustment.
NPS (Net Promoter Score)
A loyalty metric that can anticipate retention and organic growth potential. High NPS scores often correlate with lower churn and higher expansion.
Payback Period
Measures how long it takes to recover the investment spent to acquire a customer. The shorter the payback period, the more efficient your acquisition model.
Expansion Revenue
Revenue generated through upgrades or cross-sells. It reflects your product’s ability to grow inside existing accounts, reducing dependence on constant acquisition.
KPIs by stage of the SaaS funnel
Best practices for implementing and using SaaS KPIs
Prioritize quality over quantity
Avoid measuring everything by inertia. Define the most relevant KPIs based on your maturity stage, customer type, and business goals. Fewer metrics—but more actionable.
Align every team around the same indicators
SaaS success depends on collaboration. When marketing, sales, and product share KPIs, friction decreases and decision-making improves.
Automate data collection and visualization
Connect your sources (CRM, billing platform, marketing tools) and build clear dashboards in tools like Looker, Power BI, or ChartMogul. Real-time access is essential.
Review and adjust every quarter
KPIs should drive action. Review them regularly, identify deviations, generate hypotheses, and adjust strategy. Measurement without decisions has no impact.
How Sheridan can help you optimize your SaaS KPIs
At Sheridan, we work with B2B SaaS companies that need more than data—they need direction. We help define strategic KPIs, connect data sources, and build funnels designed for profitable growth.
Our experience includes:
- Implementing measurement models aligned across marketing, sales, and customer success.
- Automating executive reporting and dashboards.
- Full-funnel acquisition campaigns optimized for CAC and LTV.
- Content and retention strategies built on real data.
If your SaaS company wants to scale with clarity and profitability, we’re ready to help you turn metrics into decisions.
Book a strategy session with our team and discover how we can help.
Frequently asked questions
