SaaS Metrics School

In episode #5, I talk a bit about the SaaS metrics journey. Should we calculate metrics in aggregate or by segment? By customer profile or ICP? SaaS metrics can be dangerous to your financial health if you aggregate the wrong data. - Aggregate or segmented metrics? - When should we put this in place? - How I break out SaaS metrics stages by ARR - What should I consider for segments - Aggregate met...

In episode #4, I discuss the meaning of the CAC Payback Period. It’s a top operator and investor metric. Cash must be allocated wisely, and the payback determines how long your capital is tied up in new customer acquisition. - Top operator and investor metric - Measures the months to pay back the upfront customer acquisition cost - CAC payback inputs (cohort ARPA, recurring gross margin, CAC) - Wh...

In episode #3, I discuss CAC, or Customer Acquisition Cost. CAC can be gross dollars or a unit cost. Screw up your CAC calculation and it affects CAC Payback Period and your Cost of ARR. CAC is fundamental to your metrics reporting package. Highlights: - CAC can be dollars or a unit cost -  CAC flows to your CAC Payback and Cost of ARR -  What’s your prize? Logos, users, brands, etc. -&n...

In episode #2, I break down the new versus existing allocation that is needed for your sales and marketing expenses. If you are going to calculate CAC and other sales efficiency metrics correctly, you must allocate your S&M expenses between new business and expansion business. Highlights: - We need gross sales and marketing expenses -  CAC can be gross dollars or a unit costs -  The...

In the first episode, I talk about my favorite SaaS metric, the Cost of ARR (aka SaaS CAC Ratio). Highlights: You can calculate blended, new, and expansion Requires new and expansion bookings data Need total sales and marketing expense You must allocate S&M for the Cost of ARR New and the Cost of ARR Expansion Sales cycle length is important Easy way to call BS on a bookings forecast with this...