What is the key SaaS metric that every SaaS company should obsess about?

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Patrick Campbell answers the Quora Question: "What is the key SaaS metric that every SaaS Company should obsess about?" http://bit.ly/2rNNjtU

As you can clearly seen by the dozens of metrics mentioned in each individual post here, the answer isn’t exceptionally clear. We've seen inside about 5k different SaaS and subscription companies at this point and the most successful teams do track everything, but rally their entire teams around what's called a compass metric. It's one metric that you're trying to drive at the company overall.

It doesn't matter if you're a 10 person startup or a 4k person company - this compass metric is something that you want everyone thinking about and everyone rallying around.

The framework then becomes aligning every team member and every part of the org under that one metric, even if they’re maximizing a different metric that feeds into that main metric.

This means if you're on a retention based team (customer success, product, etc.), then you’re focused on expansion revenue or lowering churn rate, and that's what contributes to overall growth. If you're on a sales team, it's a little bit more obvious, their quota is going to contribute to that overall growth.

From a pragmatic standpoint, alignment, especially with the metric hierarchy you’re focusing on allows you to properly build momentum in the chaos of growth. Everyone is seemingly moving in the same direction, rather than running around maximizing/minimizing what the think will help.

For more on setting your compass metric, check out this article we wrote. If you ever have any questions on this or anything else related to SaaS metrics, feel free to email me at patrick@priceintelligently.com or on twitter @Patticus. More than happy to help!

Also, if you’re looking to track all of your SaaS financial metrics, then I’d recommend checking out ProfitWell. It’s the only 100% accurate provider out there and plugs right into your billing system.

Plus, we’re free and used by 5k SaaS companies. You can sign up here, and you’ll get access to your revenue, retention, and growth metrics. We also have some paid products that sit on top of ProfitWell that you can activate to reduce churn, do your accrual accounting, etc.

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Founded in 2012, Price Intelligently is revolutionizing how businesses price their products and services through technology that leverages existing and potential customers to determine true value. We built our technology because too many companies are relying on faulty data, competitive benchmarks, or "gut feelings"​ to set the most important lever in their business, and therefore are leaving an enormous amount of cash on the table. Essentially, we're nerds and we love it.