SaaS Metrics in Opstarts

Two of the key metrics when evaluating a SaaS plan are LTV (lifetime value of a customer) and CAC (customer acquisition cost). We’ll have a more in-depth post on these topics soon, but first we want to let you know that Opstarts now calculates these metrics for you!

Just go to the Growth screen and for each of your SaaS products (or select All for combined metrics across all your SaaS products) you’ll be shown a set of key SaaS metrics for the selected time period:

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There’s also a new section in plan settings:

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Here’s how everything is defined:

  • LTV – Lifetime value of each subscriber, defined as: Gross margin % * Average monthly revenue per subscriber * Renewal rate / (1 + Discount rate – renewal rate)
  • ARPU – Average monthly revenue per subscriber over the selected time period
  • Renewal Rate = What percentage of subscribers renew, taking into account subscribers lost to churn and upgrade/downgrade to different products
  • CAC = Cost of acquisition for each new customer
  • CAC Expense = Cost of lead generation expenses for each customer, for example the amount you spend in Google Ads to generate each new sale. Any expense with lead generation links to a product is included in this amount.
  • CAC Headcount = Cost of headcount associated with acquiring new customers, such as sales reps, account managers, etc. Any employee with a lead generation link to a product is included in this calculation. If you have employees that are required in the sales process, but don’t generate any leads of their own, you can add a lead generation link and simply enter 0 leads generated.
  • Months to recover CAC = how many months of revenue it takes to pay back what you spent on customer acquisition
  • LTV:CAC = the ratio of LTV:CAC
  • Gross margin % = the gross margin on each profit (we’ll later add the ability to calculate this from COGS/expenses/etc)
  • Max months for LTV = a cap on the maximum number of months you want to take into account for LTV calculation.
  • Discount rate = how much you want to discount the value of future revenue

We’ll make a followup post soon with some guidelines for the settings and in-depth examples and explanations of each of the metrics and benchmarks for evaluating them.

This is just a start to what we have in mind for metrics in Opstarts, so please let us know if you have any questions or suggestions!

Sign up for the Opstarts alpha program here

 

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