Master SaaS metrics tracking: 9 Steps from Luke Marshall
Written in partnership with Luke Marshall, CEO at Baremetrics
Most SaaS founders don’t need more data. They need clearer insights.
You’ve got dashboards. You’ve got reports. But if you’re not acting on the right metrics at the right time, you’re flying blind.
The result? You obsess over vanity benchmarks, miss early churn signals, and base your roadmap on gut feel instead of reality. It’s both frustrating and expensive.
That’s why I reached out to Luke Marshall, CEO at Baremetrics, one of the most trusted names in SaaS analytics.
Luke has seen inside the metrics of thousands of SaaS companies—and in this conversation, he shared exactly how to leverage metrics to reliably and sustainably grow your SaaS.
This article is fluff-free and straight to the point. Each section is built around a specific question, a focused insight, and a concrete action step you can apply immediately.
Note: Don’t worry about taking notes. I’ve put a checklist for you at the end with each recommendation and action to take, neatly laid out for you to implement.
1. Don’t assume metrics don’t apply to you
Many early-stage SaaS founders fall into the trap of thinking they’re “too different” to worry about standard metrics. Whether they’re trying to disrupt an industry or experiencing early growth, they assume metrics like CAC, burn rate, and LTV can wait until later.
Luke warns that this mindset often leads to major blind spots. If you’re not tracking what matters, you’re building a business on assumptions instead of insights.
Not having an eye on your CAC, not having an eye on your burn rate, not understanding how much it's costing you to onboard new customers as you get bigger—that's probably the biggest thing. - Luke
Metrics aren’t just for mature startups, but instead help you to get there.
Your turn 👇
Stop thinking your startup is the exception. Identify 2–3 key metrics based on your stage of growth and track them weekly.
Even if you're pre-revenue, get in the habit of tracking what you can (signups, trials, user activation).
2. Pick one source of truth
One of the biggest mistakes SaaS teams make is trusting multiple data sources without realizing their definitions differ.
Luke sees this all the time—one team uses Stripe data, another uses their analytics dashboard, and a third trusts internal spreadsheets. The result? Confusion and bad decisions.
It’s critical to define one source of truth per metric and ensure everyone aligns around that. Otherwise, you risk building strategies off faulty or inflated numbers that don’t reflect your actual performance.
“A red flag for me is a company where I see their MRR is overinflated because they've included active customers that haven't actually paid yet.” - Luke
Your turn 👇
Choose one platform as your single source of truth for each core metric.
Audit your data pipeline to ensure definitions are consistent between tools like Stripe, analytics platforms, and dashboards.
3. Track these 3 metrics first
If you’re just getting started, you don’t need to track everything. In fact, trying to measure too much can slow you down.
Luke recommends focusing on three core metrics in the earliest stages: Monthly Recurring Revenue (MRR), the number of active paying customers, and your MRR growth rate.
These are the clearest indicators of early traction, product-market fit, and momentum. Once you have reliable data here, you’ll be able to identify when to layer in more advanced metrics like churn or expansion revenue.
“If you narrow me down to three… MRR, active customers, and MRR growth rate for that very first couple of months of your go-to-market.” - Luke
Your turn 👇
Set up recurring reports to track MRR, active users, and growth rate from the beginning.
Don’t worry about churn at first—growth in active users will give you early insights.
4. Monitor retention over time, not just churn
Churn is important, but it doesn’t tell the full story, especially if you’re only looking at it as a point-in-time metric.
Luke urges founders to dig deeper by tracking customer and revenue retention over time using cohorts. This approach reveals where drop-offs consistently occur in the customer journey and lets you pinpoint what’s causing them.
Without this view, you might celebrate growth without realizing your retention is quietly killing your LTV and burning through acquisition dollars unnecessarily.
“Until you identify that you go, ‘What is it about month three that is happening?’ Then you’ll look back… maybe credits were used up or onboarding ended.” - Luke
Your turn 👇
Start tracking retention by cohort—both revenue and users—and look for consistent drop-off points.
Use these insights to improve onboarding, engagement, or your pricing model.
5. Segment where it actually matters
Segmentation can unlock major insights, but only when it’s used intentionally. Luke points out that many early-stage companies create dozens of plan types (friends & family, discount offers, AppSumo promos) without thinking through how that complicates later analysis.
Segmenting by plan type, pricing structure, or acquisition channel becomes valuable when there’s a meaningful difference in product experience or offer structure. That’s when you can start identifying which versions of your product or funnel actually perform best and where to double down.
Your turn 👇
Use segmentation to isolate the impact of plan changes, experiments, or acquisition campaigns.
Annotate important events (like pricing changes) directly inside your analytics tool.
6. Stop chasing vanity benchmarks
Many SaaS teams chase benchmarks that sound impressive but don’t actually guide decision-making.
Net revenue retention and The Rule of 40 are two metrics often taken out of context. Startups will compare themselves to large public companies without realizing those metrics aren’t relevant until much later stages.
Instead, focus on what actually moves the needle for your business: customer satisfaction, efficient acquisition, and sustainable expansion. Benchmarking should serve your strategy—not your pitch deck.
“Net revenue retention is good… but trying to achieve a benchmark alongside enterprise peers isn't prudent for small-scale startups.” - Luke
Your turn 👇
Focus on metrics that actually guide your growth decisions—not ones that look good on pitch decks.
Only benchmark against similar-stage, similar-model companies.
7. Use metrics to influence product development
Most founders think of metrics as a marketing or finance tool—but Luke says they’re just as essential for product development.
He advocates for a “sell to build” mindset: pitch potential features during sales calls and success reviews, collect feedback, and look for recurring patterns before you write a single line of code.
This way, your roadmap is validated by revenue and demand instead of assumptions. Metrics like MRR and feature-specific expansion revenue help you prioritize what to build based on what users actually want.
“Sell to build. You should have pre-committed MRR before you even build the feature.” - Luke
Your turn 👇
On sales or success calls, pitch feature ideas and ask what customers would pay for them.
Use churn data to guide what needs fixing or what features are missing.
8. Match your review cadence to sales velocity
Not every SaaS business needs daily metric reviews.
Set your review cadence based on how often new data becomes actionable. If you’re a high-velocity, low-ticket SaaS with new customers daily, weekly or even daily reviews make sense.
But if you're selling a few large enterprise deals each month, you won’t learn much reviewing daily. Instead, consider monthly or quarterly cycles.
The goal is to match how fast you can act on insights—not just how fast you see them.
Your turn 👇
Align metric review frequency with your ability to act on the results:
High-volume/low-ticket SaaS? Review weekly or daily.
Enterprise-focused? Monthly or quarterly reviews make more sense.
9. Forecast based on scenarios, not dreams
Most SaaS forecasts are overly optimistic. Too many teams only plan for growth, assuming everything will go up and to the right after funding or a new hire.
Real forecasting means preparing for multiple scenarios: base case, best case, and worst case. That way, you can identify when a strategy isn’t working before it’s too late.
Metrics let you simulate how changes in headcount, marketing spend, or pricing will affect runway and profitability, so you’re never caught off guard.
“Forecasting pitfalls are only forecasting for the good… you need to see decision points before they happen.” - Luke
Your turn 👇
Build multiple forecast scenarios: base case, best case, and worst case.
Tie forecasts to concrete changes (e.g., hiring, spend increases) and monitor actual vs. expected results.
Tying it all together
Metrics only matter if they lead to insight and action. Luke’s advice is a masterclass in avoiding vanity tracking, understanding customer behaviour, and aligning your team around real growth drivers.
Your to-do list 👇
Now it’s your turn. Use the checklist below to implement these steps for your SaaS:
Identify 2–3 key metrics based on your growth stage and track them weekly.
Choose one platform as your source of truth and align definitions across tools.
Set up MRR, active users, and MRR growth rate tracking immediately.
Use cohort-based retention to spot early drop-off points.
Segment only when you’ve made meaningful changes—don’t overdo it.
Ditch irrelevant benchmarks and focus on metrics that guide decisions.
Use customer calls to validate feature demand before building.
Match your review cadence to your sales velocity and product cycle.
Create multiple forecast scenarios and tie them to strategic decisions.
