February 14, 2024
Understanding your revenue metrics and effectively tracking them is crucial for monitoring financial health and guiding data-informed decisions. In this post, we'll explore the top 5 KPIs you should track on your B2B SaaS revenue dashboard based on our work guiding data strategy for +100 startups.
You can frame these 5 revenue metrics as one North Star ⭐, 3 levers, and a growth gauge.
To increase your MRR:
Lever 1: 🔼 New Customers
Lever 2: 🔼 Expansion MRR
Lever 3: 🔽 Churn MRR
Growth Gauge: 📊 Net MRR Change
MRR is the current monthly value of predictable and repeatable income from customers with active subscriptions, exclusive of one-time payments or fees.
This metric reflects the health of your core business and is the North Star metric for many companies. It's mainly used for growth tracking, forecasting, and valuation, but can also assist in gauging the impact of customer acquisition and churn. It deserves prime real estate in your dashboard, which should allow you to break down this metric into meaningful segments, such as by product, customer type, or region. This can reveal growth levers and insights into which areas are performing well and which need attention.
The first stage of the customer lifecycle from a revenue perspective: New Customers. It’s the number of new, unique customers with an active, paid subscription.
This metric is a growth drill-down tool: it tells you how much of your growth is coming from new customers. It spotlights revenue trends without noise from existing customer base churn or expansion revenue. The metric is useful for assessing the success of sales and marketing efforts in attracting new customers.
Your dashboard should allow you to break down New Customers by demographics, acquisition channel, and product line. This allows for a more granular view of which segments are driving growth, allowing you to double down on winning channels, demographics, and so on.
Next up for your dashboard: Expansion MRR. It reflects the additional Monthly Recurring Revenue (MRR) generated from existing customers through upsells, cross-sells, and upgrades.
This metric gauges your ability to grow revenue within your current customer base without relying on new customers. It's useful as a gauge for customer health, as when customers spend more on your product or service they are generally satisfied. Expansion MRR growth is viewed more favourably than New MRR growth. This is because it signals you can grow without adding new customers and an increase in Expansion MRR can drive LTV and profitability. Breakdown this metric in your dashboard, so you can identify high-growth customer segments with potentially high LTV.
Churn MRR represents MRR lost from churned customers plus MRR lost from customers that have downgraded their subscriptions.
This metric impacts the baseline calculation of predictable revenue and serves as a high-level view of all negative contributions to growth. It can be used to assess the overall health of recurring revenue streams, identify issues leading to churn and contraction, and check how different product packaging affects customer behaviour. Don't underestimate the compounding nature of Churn MRR. It not only affects current revenue but also the remainder of a customer's LTV.
The last metric for your revenue dashboard is Net MRR Change. It’s the net difference in MRR between 2 dates and allows you to understand growth in MRR. It's a simple but vital metric that helps companies understand whether they are growing, and if so, how fast. In your dashboard, analyse Net MRR Change by segment to identify the fastest and slowest growing channels and customer demographics.
Together these metrics give an excellent overview of your company’s revenue health. For more information on >60 SaaS metrics, head to our Metrics Dictionary.
Now you’ve got a grip on the most important leadership metrics, let’s outline what makes a great dashboard.
1. Simple but not simplistic
Your dashboard should clearly convey information to your team without oversimplifying to the point of triviality.
2. High signal/noise ratio
Your dashboard should have a high amount of useful information (signal) versus less useful data (noise). The most common dashboard mistake we see is metric overload. Focus on a few metrics that most directly affect your team’s performance.
3. Clean, clear, and glanceable
It should be easy to understand the key takeaways at a glance without straining your eyes. This is key in reducing attention deficit and keeping your number-shy team members engaged.
Viewing data relative to history gives crucial context, which helps you to understand whether a metric is improving or worsening. Benchmarking is also useful for setting and tracking goals.
5. Easily investigated
Great dashboards allow users to manipulate the data to drill down and explore different perspectives at a deeper level. This is important when you need specific answers to specific questions. Interactivity can be added through menus, splits, and filters.
6. Accurate & up-to-date
If you’re operating from a spreadsheet that’s updated once or twice a month from different teams, you’re operating in the dark and susceptible to errors in human data input. Having an up-to-date, accurate dashboard is crucial for fast-paced environments where timely decisions can significantly impact business performance.
What use is your data when it’s siloed? Data is best used cross-functionally. Making your dashboard sharable helps to align team members around goals, keep everyone informed, and stops you sharing ugly screenshots in Slack.
What if you could connect your SaaS tools in minutes to get beautiful, strategic dashboards and a feed of automated revenue insights? Check out Calliper’s revenue dashboard:
We believe everyone should be able to leverage data in their decision-making, no matter their technical skills. So we made a plug-and-play business intelligence solution for SaaS operators. It connects to data sources like Stripe, Hubspot, and Mixpanel out of the box with no coding – setup takes minutes. It’s pre-built around the most important metrics for each department, so you can focus on metrics that help you grow. Unlike other BI tools, Calliper provides a feed of automated insights based on trends in your data. Check it out here.
P.S. Want a free, personalised list of investors for your startup? Try Investor Match 💞
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