In this instructional video, Akeel Jabbar, Investment Director and GP at Horizon Capital, explains why B2B SaaS founders and sales teams must rigorously track a core set of sales metrics to manage growth. He emphasizes the universal truth that "if it isn’t measured, it isn’t managed" and outlines a weekly‑or‑daily tracking cadence. The five essential metrics he recommends are: (1) Monthly Recurring Revenue (MRR) and its annualized counterpart ARR, which capture the revenue stream from paying customers; (2) Customer churn rate, the percentage of customers lost each month, with a target of low single‑digit churn and an aspirational "positive churn" where expansion outweighs loss; (3) Lifetime Value (LTV), the total revenue expected from a customer over their lifespan, directly tied to churn; (4) Customer Acquisition Cost (CAC) and the LTV‑to‑CAC ratio, where a ratio above 3 signals healthy unit economics; and (5) Lead Velocity Rate (LVR) and lead closing rate, measuring the flow of new leads and the efficiency of converting them. He connects each metric to the others, showing how they form a feedback loop that informs where to focus effort, optimize spend, and ultimately scale the business. Practical advice includes using tools like Stripe, Baremetrics, or ProfitWell, maintaining a simple spreadsheet, and reviewing the metrics weekly. The video ends with a call for viewer engagement on which metrics they track.
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LTV, CAC, MRR, ARR, LCR, LVR, so many different kind of acronyms in B2B SaaS that it can be overwhelming for anybody trying to build a business. Now, as you as the founder or somebody working in sales, you have to know which one should I track, which one shouldn't I track, which one's more important to me, and how do I stay focused? And that's exactly what we'll cover in today's video. We wanna talk about what are the top sales metrics in B2B SaaS that you must measure To be able to continue to know where to grow and where to focus your time and effort. Now, this goes for all sales metrics. This is a super important point. If you're not tracking, you'll never know what the problem is and you'll never know where to improve. So there's a saying, if it doesn't get measured, it doesn't get managed. And that's exactly why you need to measure all these key metrics so you know exactly where to manage your time and manage your effort. Hey guys, welcome back to another video here at SaaS District. In today's episode, we'll be talking about the top 5 sales metrics that you must measure if you're in B2B SaaS. Okay, my name is Akeel Jabbar. I'm the investment director and GP at Horizon Capital, where we work with dozens of different SaaS companies and help them grow. And one of the key fundamental areas that keeps us, that we set up with every single company we work with is setting up metrics, KPIs, OKRs, and all these metrics and measurements and reporting that makes it super important for us when we're managing a bunch of companies so we know what's working well, where to focus our energy, where to improve, and how to continue to scale. If you're not measuring it, like I said, you're not managing it properly. So there's a couple of areas where we focus on that we love to focus on and look at every single week. Okay, if you're setting up your metrics, you probably want to look on this at minimum on a weekly, if not daily basis. So you know what's working, what's not working, and where to adjust your strategy and where you need to focus your effort. So number 1, MRR, or monthly recurring revenue. Or you can also use ARR, which is your annual recurring revenue. That's, that's exactly what it is, is what is your monthly recurring revenue from customers that are paying you on a monthly basis? Okay, so if you're paying, you're charging, let's say $99 a month for your product, you have 100 users who are paying you at that rate, that $99 a month, you know that you're making, you know, $9,999 every single month. So that's your MRR, and that's a super important metric that you want to track On a monthly basis. And then ARR is just what is that annualized so that when you're reporting to investors or you're looking to just report it to people on your team, a lot of people ask what is your ARR in terms of determining what the value of your company is. So that's super easy but super important to measure. Know how many customers you have and how much are they paying you on a monthly basis. Super straightforward. Number 2, what is your customer churn? Okay, churn, if you guys don't know what that is, that's a super important point that every single person is going to ask you when they ask about your business is how many customers are leaving at the end of the month? Okay, so if I onboard, you know, 10 new users to my platform and 5 are leaving, so you're saying that, you know, at the end of the month, 5 are leaving out of 100, so that's 5%. Okay, so if we use that same 100 customer ratio, and 5 are leaving, so your churn rate will be 5%. You have to pay attention to that value and you want to make sure to keep it as low as possible because that's going to show how valuable your product is and, um, you know, where you need to improve your product. If your churn is high, you've got to really think, you know, there's a whole kind of video I've done in the past where, you know, how to reduce churn, where to focus on churn. You might want to check out those videos, but churn is probably one of the most important points that I would say In this whole video. If you focus on churn, you know, everything else becomes easy. A number that you want to try to aim for is generally you want to stay under, you know, single digits. If you can stay under 2%, 3% churn, that's kind of the upper bound you want to be, then you're probably in a good position. Some people actually move towards positive churn. If you guys don't know how positive churn works is basically you're keeping all your customers happy, and then on top of that, you're upselling them and expanding and adding more value and adding more revenue with your existing customers. And if you're, if you're doing, you know, positive churn, you're in a super healthy position and you should be able to continue to grow your revenues. So that's number 2, customer churn. Number 3, LTV, and that's your lifetime value. Your LTV is what is the value of one of your customers? What is the average value of one of your customers? Okay? This is directly tied back to your churn. How often are these customers churning and canceling? So let's take an example of what we talked about earlier. You're charging $99 a month. And you have 100 users, okay? If all, you know, on average most of those users stick around for 1 year, okay? If they're leaving on average every 12 months and then you're getting new ones and then the other ones stay for 12 months on average, so your LTV would be 12 months times $99. So you just multiply that, your LTV becomes, you know, let's call it almost $1,200, okay? So your LTV is another important metric you wanna measure. If you're using Stripe, Bear Metrics or ProfitWell, you should be able to see that and connect it to see what your LTV value is every single week. So obviously the higher the LTV value, the lower your churn, the more valuable your, your, uh, your business is, your MRR increases, and you can see the whole picture is all tied, how it's all tied together. Number 4, your CAC, your cost per acquisition. How much does it cost you to get one of those users? Okay, and this is important. Most people say, okay, look, It's costing me $500 to get a user, but I'm only making $99 a month. But that's fine. There is no issue with paying $500 to get $99 a month. But what's more important is how much LTV is that cost per acquisition costing you? So if you're spending, let's say, $500 on Facebook ads, for example, okay, and that'll get you, you know, if you do it over and over again, you spend $5,000, it'll get you 10 users and it's predictable and you're seeing that on a month-to-month basis. As long as your LTV to CAC ratio is higher than 3, is generally a rule of thumb, then you know when you're in a good position. So you want to keep your cost per acquisition obviously lower than your lifetime value. So if it's costing you $500, like we talked about, and your LTV is $1,200, so that ends up being, the LTV to CAC ratio is about 2.5. Just over 2 and a bit, right? So it's not bad. You can see, okay, maybe we can try to optimize it, measure it every single week. Is it going up? You know, let's say this week it cost us $400. Maybe next week you can drop it. How you can reduce it to $300? Maybe you need to do more optimization on your ads, do more experimentation, test different ad sets, different images, different copy, different audiences. So that's where you kind of know where to focus. So if you know your CAC is really high, where are your leads, where are your customers coming from, you can figure out how to optimize that cost to reduce it and increase that LTV to CAC ratio to get it to above 3. And that's where it becomes more attractive. Last but not least, number 5, I'll say your lead velocity rate or your lead closing rate. And what I mean by that is lead velocity is how many new leads are you adding every single month? Okay. If you're spending, you know, back to the CAC ratio, if you're spending You know, $500 and you're getting 10 users, okay? Or sorry, 10— you're getting 10 leads. So each of those leads are costing you $50, right? So you have 10 leads and you're getting them, let's say, every single month. How many of those are you closing? Your lead closing rate. So if you get 10, your lead closing rate is going to be 10%, right? So for every 10 leads you get, you know you're going to close 1. So that's 10%, and that's going to cost you $500. And then you can see how it's all tied back together. So measure how many leads you're getting every week, how many of those are actually being closed, how many, how much is that costing you? How much is that leading to your LTV? How much is that leading to, how many of those are actually churning? And then back to the top, what does that become in the big picture of the overall business? What is your MRR and ARR? So you can see it starts with leads, your costs, your closing rate, your LTV, your churn, your MRR. So those are the top 5 I would recommend. You guys have to measure today. Set up a simple spreadsheet, track it every single week, and know where to focus your time and effort when it comes to B2B SaaS. So hope you guys enjoyed that video. If you guys liked this video, make sure to subscribe, like the video, and comment below. Let me know which sales metric are you currently tracking that I haven't mentioned? What is most important to your business right now? Is there any other metric that you're focusing on and that you're looking to improve? Let me know, and maybe we can give you guys some Tips on how to improve that as well. All right, guys. Thanks again, and see you guys in the next video.
