SaaS ROI Calculator

How to use this SaaS ROI calculator

To calculate your SaaS ROI, choose whether you want to calculate your monthly or yearly ROI. Then, input the following details:

• Average Revenue Per User (ARPU): The monthly revenue generated from each customer.

• Number of Customers: Total active customers for the given period.

• Customer Acquisition Costs (CAC): The cost incurred to acquire new customers.

• Product Development Costs: Costs involved in developing and improving your SaaS product.

• Customer Retention and Support Costs: Expenses related to customer service, support, and retention strategies.

• Hosting/Infrastructure Costs: Costs incurred to maintain the infrastructure and servers hosting your SaaS product.

• Operational Costs: Any other operational expenses tied to the SaaS business.

The tool will instantly provide your SaaS ROI based on these inputs.

SaaS ROI formula

SaaS ROI = ((Total Revenue from SaaS Customers} – Total SaaS Costs) / Total SaaS Costs) × 100

If you are calculating your monthly SaaS ROI,

Revenue from SaaS = Monthly Recurring Revenue (MRR) = Average Revenue Per User (per month) x Number of Customers

Alternatively, if you want to calculate the yearly SaaS ROI,

Revenue from SaaS = Annual Recurring Revenue (ARR) = Average Revenue Per User (per month) x Number of Customers x 12

Total SaaS Costs = Customer Acquisition Costs + Product Development Costs + Retention and Support Costs + Hosting/Infrastructure Costs + Operational Costs

Understanding the SaaS ROI result

• A high SaaS ROI indicates that your SaaS business is operating profitably, with strong returns from customer subscriptions compared to the costs of running the business.

• A low or negative SaaS ROI suggests that your costs are too high or that your customer base or revenue per user is too low to justify the current expenditure. This means you need to adjust strategies by increasing your ARPU or reducing operational costs.

When to calculate SaaS ROI

You should calculate SaaS ROI in the following key situations:

• Before launching your SaaS business to project future profitability

• Monthly or yearly to assess the health of your business

• After major changes like a new pricing model or feature launch

• When deciding on scaling or reducing business investments

How to calculate SaaS ROI (with example)

Imagine your business generates an average of $50 per user per month, you have 200 customers, and your total monthly costs (including acquisition, development, and operational expenses) are $10,000. Your monthly SaaS ROI would be calculated as follows:

SaaS ROI = ((Total Revenue from SaaS Customers} – Total SaaS Costs) / Total SaaS Costs) × 100

Total Revenue from SaaS Customers = $50 × 200 = $10,000

Total SaaS Costs = $10,000

SaaS ROI = ((10,000 – 10,000) / 10,000) × 100 = 0%

In this scenario, your ROI is 0%, meaning you’re breaking even. To increase your ROI, you might consider reducing costs or increasing ARPU through upselling or product improvements.

How to improve your SaaS ROI

• Increase customer lifetime value by offering additional features or premium plans

• Reduce CAC by refining your customer acquisition strategies, such as using inbound marketing or referrals

• Improve product efficiency to reduce development and infrastructure costs

• Focus on customer retention by improving customer support and offering loyalty programs

• Regularly review and adjust your pricing strategy to align with the market and customer demand