The SaaS business model is here to stay. Today, it’s roughly a market of 150+ billion dollars and seems to keep on growing. But there is always one misconception that SaaS business models are just like traditional business models. However, SaaS or Subscription businesses are more complex than traditional businesses. Traditional business metrics totally fail to capture the key factors that drive SaaS performance.
With this Microsoft Preferred App, you will no longer have to rely on spreadsheets and manual calculations to keep track of these important SaaS metrics. You will be provided with a comprehensive dashboard within Dynamics 365 CRM that shows these metrics which will help you to analyze the performance of your business for a given period of time.
To know more, join us for the upcoming webinar to be held on:
In the meanwhile, let’s have a look at some of the key SaaS metrics that provides necessary insight into your business health:
Monthly Recurring Revenue (MRR)
MRR is a SaaS metric that measures the predictable revenue stream for a month. It is designed to accurately deliver performance reporting across a number of different subscription terms and types. Most investors are very interested in MRR as it allows for accurate financial projections and makes planning the business easier, and it also measures not only the growth but the momentum of the SaaS business.
Annual Recurring Revenue (ARR)
ARR is a prediction of how much revenue your company will generate annually. It is the representation of the recurring revenue a subscriber has with you over a 12-month period.
Average Revenue Per User (ARPU)
ARPU is the average amount of revenue you earn from each of your active customers monthly. Since free users don’t contribute to your revenue, they are excluded from the calculation.
Customer Lifetime Value (CLTV)
CLV is generally the total of actual revenue minus expenses for a customer. It is important because it ensures that your business model isn’t supporting a model where the customer is spending less than the cost it took to acquire them.
Active customers are users who are currently paying to use your product. This excludes users on free trials or free plans. Separating active customers is helpful because it shows you how many people are paying you each month, not just the number of people using your product.
Churn is the percentage of customers or revenue lost during a given period. Customer churn only accounts for customers who’ve completely canceled their accounts whereas, Revenue churn includes revenue lost from canceled customers, downgrades, and other lost monthly revenue. If you offer different products and services, you will need to track churn for each of these differentiators to get better insight into the success of your offerings.
But that’s not all! Apart from SaaS metrics analysis, Subscription and Recurring Billing Management also helps you to:
Create and manage multiple Plans, Add-ons & Pricing Models for products
Calculate and generate bills on a pro-rata basis
Send automated reminders for Renewals & Payments
Eliminate tax inaccuracies with automated Tax calculations
For all SaaS-based businesses, Subscription and Recurring Billing Management provides them the right avenue to seamlessly manage, and streamline the subscription and recurring billing processes within Dynamics 365 CRM.