Retention & Churn Metrics
5 important questions on Retention & Churn Metrics
Why is Monthly Recurring Revenue (MRR) significant in SaaS?
- Revenue predictability
- Business growth tracking
- Financial forecasting
- Valuation assessment
- Performance indicators
What does Customer Acquisition Cost (CAC) indicate for a SaaS company?
- Cost efficiency in acquiring new customers
- Impact on profitability
- Marketing and sales effectiveness
- Budget allocation strategies
- Customer retention expectations
How is Churn Rate calculated and why is it important?
1. (Customers lost during a period) / (Total customers at the start)
It's crucial for:
- Understanding customer retention
- Identifying growth limitations
- Evaluating product satisfaction
- Informing future growth strategies
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What is Lifetime Value (LTV) and how does it benefit SaaS companies?
- Total revenue expected from a customer
- Insight into long-term profitability
- Justification for CAC spending
- Customer relationship management decisions
- Business sustainability assessments
Why is Average Revenue Per User (ARPU) an essential metric?
- Revenue generation efficiency
- Pricing strategy effectiveness
- Comparison across different customer segments
- Growth potential assessment
- Value perception by customers
The question on the page originate from the summary of the following study material:
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