In episode #56, I dive into my 5 Pillar SaaS Metrics Framework. There is a progression to our financial maturity and our metrics. Today, let’s talk about Pillar 4 and your financial profile. - Rule of 40 - R&D as % of revenue - S&M as % of revenue - G&A as % of revenue - EBITDA - Operating leverage Check out Episode 38 for more on your OpEx profile: https://podcasts.apple.com/us/podcast/what-is-your-saas-opex-profile/id1697566096?i=1000625023062 Download my framework here: https://ww...
Sep 07, 2023•3 min
In episode #55, I dive into my 5 Pillar SaaS Metrics Framework. There is a progression in our financial maturity and our metrics. Today, let’s talk about Pillar 3 and margins. - Overall gross margin - Margins by revenue stream - Revenue mix - COGS vs OpEx Download my framework here: https://www.thesaascfo.com/downloads/five-pillar-metrics-framework/ SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout F...
Sep 06, 2023•3 min
In episode #54, I dive into my 5 Pillar SaaS Metrics Framework. There is a progression to our financial maturity and our metrics. Today, let’s talk about Pillar 2 and retention. - Customer retention - Gross revenue retention - Net revenue retention - Renewal rate - CSAT / NPA - RPO’s (bonus) Download my framework here: https://www.thesaascfo.com/downloads/five-pillar-metrics-framework/ SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasa...
Sep 05, 2023•3 min
In episode #53, I dive into my 5 Pillar SaaS Metrics Framework. There is a progression to our financial maturity and our metrics. A message from a new SaaS founder had me thinking about the first step in our revenue journey. - New revenue - Expansion revenue - New customers - Bookings data, payments data, or invoice data Download my framework here: https://www.thesaascfo.com/downloads/five-pillar-metrics-framework/ SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS commun...
Sep 04, 2023•2 min
In episode #52, I dive into metrics and valuations. It’s interesting to hear investors say that they are not focused solely on one metric to value your business or do a deal. Of course, a really bad number could sink a deal but we have to look at the entire SaaS metrics picture. - Should I focus on one metric? - Should I focus on many metrics? - My 5 pillar SaaS metrics framework Download my framework here: https://www.thesaascfo.com/downloads/five-pillar-metrics-framework/ SaaS Metrics courses ...
Sep 03, 2023•3 min
Two Methods to Run Retention Analysis In episode #51, I dive into how to run retention analysis. There are a lot of purists out there, but we have to be practical and realistic with the data that we have available to us. - What is Gross Revenue Retention - What is Net Revenue Retention - Cohort method - Aggregate method Blog post and template on retention: https://www.thesaascfo.com/how-to-calculate-net-dollar-retention/ SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS ...
Sep 02, 2023•3 min
In episode #50, I dive into cohort analysis. This is thrown around a lot in SaaS. It doesn’t apply in all situations so don’t always jump on the cohort bandwagon. - What is cohort analysis? - What metrics are relevant? - When does it not apply? Download my cohort analysis template from this free course: https://www.thesaasacademy.com/offers/gmbMDsYN/checkout SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/c...
Sep 01, 2023•4 min
In episode #49, I dive into Klaviyo’s gross profit and OpEx profile. It’s really interesting to see how they are performing at scale, and it doesn’t disappoint. - Gross Profit - OpEx Profile - Best in class numbers SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn: https://www.linkedin.com/in/benrmurray Subscribe to Ben’s SaaS newsletter: https://mailchi.mp/df1db6bf8bca/the-saa...
Aug 31, 2023•4 min
In episode #48, I dive into Klaviyo’s net revenue retention (NRR) formula. Its formula appears pretty standard, but catch episode #47 on Klaviyo’s gross revenue retention. It’s not very standard. - The standard NRR formula - Klaviyo’s NRR formula Klaviyo's S-1 can be found here: https://www.sec.gov/Archives/edgar/data/1835830/000162828023030618/klaviyoincs-1.htm SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwY...
Aug 30, 2023•3 min
In episode #47, I dive into Klaviyo’s gross revenue retention (GRR) formula. Wait! What? That definition does not look standard. - The standard GRR formula - Klaviyo’s GRR formula - 2 big takeaways Blog post on gross revenue retention: https://www.thesaascfo.com/how-to-calculate-gross-dollar-retention/ SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn: https://www.linkedin.com/...
Aug 29, 2023•3 min
In episode #46, I dive into the sometimes ambiguous world of churn. Seems like this should be easy. - What is churn? - When should churn be counted in our reports? - This will impact our retention metrics SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn: https://www.linkedin.com/in/benrmurray Subscribe to Ben’s SaaS newsletter: https://mailchi.mp/df1db6bf8bca/the-saas-cfo-sign...
Aug 28, 2023•2 min
In episode #45, I dive into SaaS metrics lingo. TCV, ACV, and ARR are common terms in SaaS that mean many different things. Let’s not confuse this in our bookings reports. - What is ARR? - What is ACV? - What is TCV? SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn: https://www.linkedin.com/in/benrmurray Subscribe to Ben’s SaaS newsletter: https://mailchi.mp/df1db6bf8bca/the-s...
Aug 27, 2023•3 min
In episode #44, I dive into one of the biggest data mistakes that I see in SaaS. It’s your closed won opportunity data. Opp data drives reporting, analysis, and invoicing. - Why this matters? - Biggest mistakes - Bookings drive revenue forecasts - Downline impact on S&M metrics CRM Opportunity replay in my No Fluff course: https://www.thesaasacademy.com/offers/zz3ZR2WL/checkout SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacade...
Aug 26, 2023•3 min
In episode #43, I dive into forecasts and reality. I’ve seen a lot of SaaS P&Ls and forecasts. There is a simple way to call BS on a forecast. And to help size up your sales and marketing investment needed to hit sales forecasts. - What metric do we use to call BS - How to size sales and marketing investment - Benchmarks vary Blog post on the Cost of ARR: https://www.thesaascfo.com/saas-cac-ratio/ SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: http...
Aug 25, 2023•3 min
In episode #42, I dive into the structure of your SaaS P&L. After improving your chart of accounts, this is the second step in improving your SaaS finance foundation. There is a specific structure we need in a SaaS P&L. - Your out-of-the-box P&L is wrong - What are the revenue categories - What are the COGS categories - What are the OpEx categories SaaS P&L Structure Blog Post: https://www.thesaascfo.com/how-to-structure-your-saas-pl/ SaaS Metrics courses here: https://www.thesaa...
Aug 24, 2023•4 min
In episode #41, I dive into R&D investment efficiency. When I was researching episode 40 on the R&D Payback Ratio, I stumbled upon an article by Boston Consulting Group. - What is the R&D Index? - What are the inputs? - What does this measure? - What are the benchmarks? Boston Consulting Group post: https://www.bcg.com/publications/2019/software-companies-using-research-and-development-more R&D Investment Efficiency Blog Post: https://www.thesaascfo.com/how-to-calculate-your-saas...
Aug 23, 2023•4 min
In episode #40, I dive into R&D efficiency. I think this has always been a hard one. The correlation between R&D investment and growth. A reader brought this metric to my attention so I did a little digging. - What is the R&D Payback Ratio - What are the inputs - What are the drawbacks Credit: https://www.opexengine.com/are-we-any-good-at-rd-investment-in-the-software-and-saas-world/ SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://ww...
Aug 22, 2023•3 min
In episode #39, I address COGS and usage-based revenue. It’s so important to track COGS correctly for your SaaS. Your COGS area is often dictated by your revenue streams. That’s the case when you have any type of variable revenue streams. - What is COGS for pure play SaaS - What if we have usage-based revenue - Why is this setup so important to manage SaaS SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/che...
Aug 21, 2023•3 min
In episode #38, I address the “bottom half” of your SaaS P&L. This is your OpEx area, or operating expenses. There is a common way to analyze this area for efficiency. - What is SaaS OpEx - How do we analyze OpEx - Sales and marketing need not apply Download my SaaS P&L structure template here: https://www.thesaascfo.com/how-to-structure-your-saas-pl/ SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/...
Aug 20, 2023•3 min
In episode #37, I address the top three SaaS metrics. And I’m sorry that this will really disappoint you. - Are there really top 3 metrics? - Top metrics according to my SaaS founder interviews - Your SaaS metrics framework Download my 5 Pillar SaaS Metrics Framework here: https://1drv.ms/f/s!Ahm6BxeweIsNgbt-cX-iaRehn4EVuw?e=XeNZoB SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on Linke...
Aug 19, 2023•2 min
In episode #36, I address how to know which metrics are relevant for your stage. There are a lot of metrics to calculate, but we can easily go overboard with too many metrics. - Metrics by stage - Metrics by ARR - Your SaaS metrics roadmap Download my 5 Pillar SaaS Metrics Framework here: https://1drv.ms/f/s!Ahm6BxeweIsNgbt-cX-iaRehn4EVuw?e=XeNZoB SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Fol...
Aug 18, 2023•2 min
In episode #35, I address a nuance of the CAC Payback Period metric. It’s one of my favorite metrics and requires three inputs. - What is CAC Payback Period - What are the three inputs to the formula - What does gross margin adjusted mean Download my CAC Payback template at this link: https://www.thesaasacademy.com/pl/2147762344 SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn...
Aug 17, 2023•3 min
In episode #34, I address the forgotten metric, ARPA. ARPA stands for average revenue per account. It’s such a simple metric that it is often forgotten. However, I use this metric a lot with retention analysis and forecasting. - What is ARPA? - How I use it in retention analysis - How I use it in forecasting >> Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Almost 3,000 members! I hold a lot of metrics AMA's on Fridays. SaaS Metrics courses here: ht...
Aug 16, 2023•3 min
In episode #33, I address close dates for our bookings data. There are two primary camps when it comes to the date of record for a Closed Won opportunity. - What is a close date? - Option 1 – date of execution - Option 2 – subscription start date - Mismatch between bookings date and S&M metrics - Make sure it’s defined internally Download my bookings template from this blog post: https://www.thesaascfo.com/the-saas-bookings-report/ SaaS Metrics courses here: https://www.thesaasacademy.com/ J...
Aug 15, 2023•3 min
In episode #32, I address CAC, or customer acquisition cost, and why it behaves like debt. This is important to understand as high CAC and low retention can sink your SaaS. - What is CAC? - What happens when a customer churns? - Does CAC go away? - Understanding your payback point Download my CAC Payback template at this link . SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn:...
Aug 14, 2023•3 min
In episode #31, I address the ever-changing definition of ARR. It’s so important to get this right for several reasons. It affects your metrics and valuation. Credit to a SaaStr post on calling ARR corrupt. It got me thinking about this very important topic. - What was ARR? - What is ARR today? - What is not ARR - Clear revenue categories - Clear bookings data - Impact on metrics SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy...
Aug 13, 2023•4 min
In episode #30, I address variable revenue and software bookings. This is a hot topic in SaaS. It can be dangerous to mix subscription revenue with variable revenue. - What is a software booking? - Does variable revenue count as a booking? - Contract minimums matter SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn: https://www.linkedin.com/in/benrmurray Subscribe to Ben’s SaaS...
Aug 12, 2023•3 min
In episode #29, I address the nuances of renewals and software bookings. Renewals may or may not be a booking. Of course, it depends! - What is a renewal? - When does a renewal count as booking? - Track incremental ARR - Renewal rates SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn: https://www.linkedin.com/in/benrmurray Subscribe to Ben’s SaaS newsletter: https://mailchi.mp/...
Aug 11, 2023•3 min
In episode #28, I address the nuances of software bookings. This is a common question from students in my SaaS metrics course at TheSaaSAcademy.com. Do price changes or inflators count towards my bookings number? - What counts as price change? - Should this count as a booking? - Your retention numbers don’t lie SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn: https://www.link...
Aug 10, 2023•3 min
In episode #27, I address the nuances of software bookings. It’s important to track expansion ARR just like new customer ARR. There are two types of expansion bookings. - What is an upsell? - What is a cross-sell? - Track gross and incremental ARR - Don't mix New and Expansion - Opportunity record type SaaS Metrics courses here: https://www.thesaasacademy.com/ Join Ben’s SaaS community here: https://www.thesaasacademy.com/offers/ivNjwYDx/checkout Follow Ben on LinkedIn: https://www.linkedin.com/...
Aug 09, 2023•3 min
