SaaS Metrics – Page 5

Net Revenue Retention (NRR) Rate, also known as Net Dollar Retention (NDR), is the percentage of recurring revenue retained from existing customers in a defined time period, including expansion revenue, downgrades, and cancels. This churn metric gives a comprehensive view of positive as well as negative changes with respect to customer retention.

Payment acceptance is the percentage of attempted payments that are successfully authorised and accepted. In credit-card terminology, this is often called the authorization rate. Failed payments — whether declines by the card issuer, routing issues, or declines due to fraud filters — are a major source of lost revenue in online commerce because acceptance rates for card-not-present (online) payments are generally lower than for in-person transactions.

Product Qualified Leads (PQL) measures the quality of potential customers by classifying them according to their actions and usage within the product platform. Certain actions in the scope of the product that indicate high intention to purchase are weighted higher and used to classify leads as PQLs.

Propensity to Renew is a measure of the likelihood a customer will renew their contract instead of terminating their engagement with a company, most often captured through a customer survey. It signals revenue risk and potential logo churn.

R&D Productivity is a performance measure of how much new revenue is associated with dollars invested into R&D within a technology company.

Reactivation MRR is the total recurring revenue generated from customers who previously cancelled and have resumed a subscription in the current tracking period. It measures the revenue impact of win-back efforts and helps distinguish returning-customer growth from new customer acquisition.

Renewal rate is the percentage of customers who renew their subscription within a defined invoicing cohort, measured against the total customers up for renewal in that period. It tracks churn and retention at the cohort level rather than against total customer count, making early trends easier to spot.

Return on Incremental Invested Capital (ROIIC) is an efficiency metric that measures the change in net operating profit after tax as a percentage of the change in invested capital from a prior period. It isolates the productivity of new investment, making it a sharper tool for evaluating whether growth spending is creating value.

The SaaS Magic Number is a ratio showing yearly recurring revenue growth gained for every sales and marketing dollar spent. It indicates the level of operational efficiency of a company, as well as the sustainability of sales and marketing expenditure.

SaaS Quick Ratio measures how efficiently a SaaS company grows Monthly Recurring Revenue by comparing revenue gained through new customers and expansions against revenue lost through churn and downgrades.

SAM measures the revenue opportunity of capturing a specific market for a product or service within your limitations and reach.

Serviceable Obtainable Market (SOM) measures the realistic revenue potential of a product or service in a particular market.