B2B software billed on subscription. The economics turn on retention and expansion: gross margins run 70–85%, and net revenue retention above 100% means the install base grows without new logos. Go-to-market spans self-serve/PLG and sales-led motions; CAC payback and the Rule of 40 govern how aggressively you can spend to grow.
Representative companies
- Salesforce — the enterprise sales-led archetype
- HubSpot — inbound-led mid-market
- Figma — bottom-up PLG that expanded into enterprise
Primary metrics
The metrics that define health for a saas business.
- Rule of 40Global / FinancialCloud Index avg ~31%, top-decile ~48%. EBITDA basis: only ~15% clear it; FCF basis ~46%. Margin basis swings result ~16pts - always specify.
- Net revenue retention (NRR / NDR)Global / FinancialPrivate median ~100-106%; top quartile 110-125%+. Usage-based runs higher 120-130%+ (Snowflake 158%->~125%, Datadog >130%->~120%). Weak for low-ARPA consumer; NOT meaningful for marketplaces.
- Gross revenue retention (GRR)Global / FinancialConsensus median ~88-90%. Enterprise ~90%+, SMB ~80-88%.
- Magic numberGlobal / Financial>1.0 pour money in, 0.5-1.0 inefficient, <0.5 model not figured out. KBCM 2024 median ~0.7.
- CAC paybackGlobal / FinancialSaaS by segment: SMB <12mo, mid-market <18mo, enterprise <24mo (KBCM loaded median ~24-29mo). DTC <6mo often cited.
- Signup -> activation / aha rateActivationAvg ~37% (Userpilot); 20-40% normal (OpenView). Sales-led ~42% > product-led ~35%. Milestone-dependent - not portable.
- Logo churn rateRetentionMonthly by ARPA: <$25/mo ~6.1%, >$500/mo ~2.2% (ChartMogul). B2B annual 'good' <5%. Usually exceeds revenue churn up-market.
- ACV (annual contract value)RevenueKBCM median $54k (2022) -> $56k (2023) -> $62k (2024E), rising as cos move upmarket.
Secondary metrics
- Burn multiple
- Quick ratio (growth)
- LTV:CAC ratio
- Net new ARR (gross vs net)
- Revenue per employee / ARR per FTE
- Website / landing-page conversion rate
- Win rate
- Sales cycle length
- Pipeline coverage ratio
- Lead velocity rate (LVR)
- Quota attainment
- Feature adoption rate
- NPS (Net Promoter Score)
- Free-to-paid conversion (freemium)
- Free-trial conversion (opt-in vs opt-out)
- PQL conversion
- Expansion / upsell rate
Omega Point BenchmarksSaaS