Welcome to part 3 of 4 of our Ultimate Report series. When we talk to our customers and potential customers we love to get an understanding of their “ultimate report”. It’s the report that stakeholders can quickly rally behind and understand how the business is performing, usually to a goal or target.
This week, our ultimate report is ARR Metrics. For any SaaS business, the movements in your recurring revenue are crucial to making decisions, hiring and resource allocation. What makes SaaS metrics great are that they are fairly easy to benchmark across industries.
Tracking Your ARR Movements
This report focuses on 4 key recurring revenue movements.
- New Business ARR: When a lead converts to a customer (for the first time)
- Expansion ARR: When an existing customers increases their recurring spend with you (more seats, better package, etc)
- Contraction ARR: When an existing customers decreases their recurring spend with you (less seats, downgrade plan, etc)
- Churn ARR: When a customer cancels their subscription and doesn’t renew.