9 Most Important KPIs for Your SaaS Platform

Over the last few years, the Software-as-a-Service platform (SaaS platform) has demonstrated a multitude of benefits to businesses, prompting many companies to make the switch to such services. As a result of this shift, businesses are able to take advantage of increased operational efficiency, cost savings, and improved scalability.

Software as a Service (SaaS) platforms are subscription-based applications that are centrally hosted on the cloud. By paying a fee, users are provided access to the SaaS platform over the internet. Rather than purchasing the full product and its associated features upfront, users can opt for renting the SaaS platform for a predetermined period of time. This mutually beneficial arrangement brings a much higher value proposition for both producers and consumers alike.

Despite the convenience provided by Software as a Service (SaaS) systems, administering them can be complex, and the performance of these systems is subject to a variety of variables. As such, engineering executives, growth managers, and other key stakeholders must monitor certain metrics known as Key Performance Indicators (KPIs). This blog article outlines nine KPIs that engineering and growth teams should track in order to ensure the success of their SaaS platform.

  1. Net Promoter Score (NPS)

    Managers often rely on Net Promoter Score (NPS) to determine if their Software-as-a-Service (SaaS) platform is worth recommending to other people such as colleagues, friends, and acquaintances. To obtain an NPS, developers prompt users to rate the service or product on a specific scale.

    A high Net Promoter Score (NPS) suggests that the Software as a Service (SaaS) platform is meeting the expectations of its customers. Conversely, a low NPS score is indicative of customers’ reluctance to recommend the platform to their peers.
  2. Monthly Unique Visitors (MUV)

    MUV (Monthly Unique Visitors) provides the development team of a Software-as-a-Service (SaaS) platform with the capability to measure the total number of visitors who have not previously accessed the platform in the current month.

    This Key Performance Indicator (KPI) provides detailed information regarding the entirety of the Software as a Service (SaaS) platform’s audience. It is important for company executives to compare the number of new visitors to the number of existing visitors each month, as this provides an indication of the success of any marketing initiatives. The total number of unique visitors is a direct reflection of the effectiveness of these strategies.
  3. Customer Acquisition Cost (CAC)

    The Customer Acquisition Cost (CAC) is an important metric for businesses that are looking to understand their return on investment and profits. CAC is the sum of all expenses associated with acquiring a new customer, such as sales and marketing costs, wages, tools, commissions and other auxiliary services. In order to calculate CAC, businesses should add up the total amount spent on their sales and marketing channels, then divide this figure by the number of new customers they have gained. This figure can then be used to help businesses understand their net earnings and profits more accurately.
  4. Average Revenue Per User (ARPU)

    The Average Revenue Per User (ARPU) is a key performance indicator (KPI) for SaaS platforms that provides insight into the performance of the platform. It is calculated by dividing the total income by the number of active users over a certain time period. It is important to calculate ARPU individually for new users and current customers, as this will provide a more accurate assessment of the platform’s pricing. The ARPU is vital for product managers to monitor and control SaaS pricing on a monthly, quarterly, or annual basis, and it is essential for determining the right price.
  5. Customer Lifetime Value (CLV)

    In order to accurately calculate the Customer Lifetime Value (CLV) for a particular client, one must first add up all of the purchases made throughout their subscription to the SaaS service. Then, to get a more precise CLV, one must divide the Average Revenues Per User (ARPU) by the Churn Rate.
    Customer Lifetime Value (CLV) is an important Key Performance Indicator (KPI) for any Software-as-a-Service (SaaS) business. It provides insight into the value that each customer creates for the company, as well as how long they use the platform. By measuring this KPI, SaaS businesses can better understand and manage their income, pricing strategies, and overall contribution from individual customers.
  6. Monthly Recurring Revenue (MRR)

    Monthly Recurring Revenue (MRR) is the anticipated profits that a Software as a Service (SaaS) platform will generate in a given month. It can be calculated by adding together the revenues from all customers in the month. There are two types of MRR: Expansion MRR and Churn MRR. Expansion MRR is the income derived from new customers and those who have upgraded their plans. Conversely, Churn MRR is the amount of revenue lost as a result of customers downgrading or discontinuing their use of the SaaS platform.
    Monthly Recurring Revenue (MRR), alongside its variants, is one of the most crucial performance indicators for Software-as-a-Service (SaaS) companies. This key performance indicator allows them to accurately track their revenue, profits growth, and losses over time. In addition, MRR also takes into account any changes in the SaaS product, services, and marketing strategies.
  7. Churn Rate

    It is significantly more expensive to acquire new customers than it is to retain existing ones, which is why it is essential to monitor the number of customers that opt out of the Software as a Service (SaaS) platform. This number is referred to as the churn rate, and having a low churn rate is critical to the success of any SaaS organisation. A churn rate of 5-7 percent annually is considered reasonable; however, any rate that exceeds that percentage could be detrimental to the SaaS business’s success.
  8. Cash Burn Rate (CBR)

    The Cash Burn Rate (CBR) provides a comprehensive view of all the expenditures associated with the Software as a Service (SaaS) management platform. We must take all costs into account when assessing the CBR, such as fees for advertising campaigns, marketing efforts, staff salaries, and other operational expenses.
    Companies can calculate their Cash Burn Rate (CBR) over a specific duration, such as a month, quarter, or year. CBR measures the amount of cash leaving the company. In order to guarantee a positive net profit, the finance and sales departments must analyse and compare the Monthly Recurring Revenue (MRR) and CBR.
  9. Number of developers employed

    In order to ensure the smooth running of any SaaS platform, it is essential to have a team of highly skilled developers. In order to maximise performance, businesses must carefully monitor the number of developers working on the project, their effectiveness, and their ability to troubleshoot any issues. This team may include multiple coders, Site Reliability Engineers (SREs), DevOps professionals, and other developers with the necessary skillset to work on SaaS applications.
    The number of developers on your team is indicative of the size of your business. An extensive development staff implies that your Software-as-a-Service (SaaS) platform is functioning optimally. It is essential to recruit knowledgeable engineers to work as product managers for your SaaS platform.

So, how can you assure your SaaS platform’s success?

As an engineering leader, it is essential to ensure the successful operation of a SaaS company by monitoring key performance indicators (KPIs) closely. To do so, it is necessary to employ effective techniques and ensure that they are implemented correctly throughout the SaaS development process. It is also important to assemble an efficient development team to collaborate with the sales, finance, administration, and marketing departments to ensure that the SaaS company is running smoothly.

Are you seeking for developers to work on your SaaS platform? Works that I may assist you.

In order to ensure the success of your software-as-a-service (SaaS) platform, why not consider hiring pre-screened developers with Works? Our hiring process guarantees that you will be provided with the best talent available to help you reach your ultimate goals. With a remote SaaS developer from Works, you can rest assured that the highest quality results will be achieved and your SaaS company will be successful.

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