1 Learn the concept
Business-to-business software companies, called B2B SaaS, sell subscriptions to other businesses. Their numbers differ from those of a shop or a service: revenue repeats each month, customers cost money to win and keeping them matters most. This lesson introduces the key metrics a young B2B SaaS company should start tracking as soon as revenue begins, and what each tells you.
2 See it in action
- Monthly recurring revenue: the predictable revenue each month.
- Customer acquisition cost: what it costs to win a customer.
- Churn: the share of customers or revenue lost over a period.
- Lifetime value: the revenue a customer brings over their time with you.
Worked example
Calculating payback
CAC: $600. Monthly revenue per customer: $100. Gross margin: 80 percent.
Monthly margin: $100 x 0.8 = $80.
Payback: 600 / 80 = 7.5 months.
Interpretation: shorter payback means faster reinvestment.
Check: compare with churn. If customers leave before 7.5 months, the model loses money.
3 Study an example
Example scenario
A software startup finds it spends more to win a customer than the customer pays in the first year. The numbers show it must lower acquisition cost or improve retention before it can grow profitably.
4 Apply it and download
- Define each metric in your own words.
- Calculate them for an example company.
- Decide which one to watch first.
Worksheet Data cleaning checklist and report templateOpen, print or save as PDF