Without measuring and understanding your customer success metrics, you will not know if they are satisfied, unsatisfied, or yearning for improvements.

This knowledge is essential for your product’s success.

A 2022 statistics revealed that almost 17,000 SaaS companies in the United States have about 59 billion customers globally.

Also, about 2,000 SaaS companies in the United Kingdom are selling their services to over 3 billion customers globally.

That’s a large amount of customer base to handle despite the help of advanced technology and digital improvisations.

If you don’t use Customer Success Metrics to improve your products, you could lose your market share to competitors.

What Are Customer Success Metrics and Which Ones Should Measure?

Customer Success Metrics are key indicators businesses use to track and improve their customer success rates.

By adding two or more KPIs, you can quickly figure out the lapses in your marketing strategies and the areas you need to work on.

Here are the top Customer Success Metrics you should consider for your SaaS Business:

• DAU/ MAU
• Retention Rate
• Onboarding Engagement Rates.
• Customer Lifetime Value (CLV)
• First Contact Resolution Rate
• Customer Satisfaction Score

1. DAU/MAU

Tracking Daily Active Users (DAU) or Monthly Active Users (MAU) is one way to improve your products.

This metric can help you determine the number of unique users actively using your product at a given interval.

For various businesses, an active user might mean different things.

An active user, for instance, can only sign in to your product and navigate through your product’s pages or use one of its features.

By defining who an active user is, you may determine how many active users you receive each day, week, or month.

While a steadily increasing DAU/MAU signifies customers’ satisfaction with your product, a decrease could denote the opposite.

2. Retention Rate

Retention rate (RR) represents how many users return to use your product after the initial purchase or the previous subscription.

An increase in this metric is also a measure of customers’ loyalty to your brand.

On the flip side, a drop in retention rate means users are dissatisfied and have trust issues with your products.

The formula for RR = No. of active users / No. of total users.

Let’s say you get 100 active users monthly, and 40 users keep returning to use your product; your retention rate is 40%.

You can increase this percentage by helping your users understand the value of your product and getting feedback from them.

3. Onboarding Engagement Rates

The onboarding phase is the first stage, where you give your users a proper welcome and a good tour of your product. So, the experience has to be excellent and rewarding.

If users are already confused right when they’re just getting started with your product, there is a high chance your retention rate will also drop.

You should track the onboarding engagement rate to create an ‘AHA!’ for your new customers.

4. Customer Lifetime Value (CLV)

Customer Lifetime Value tells you how much revenue a customer has generated throughout his lifetime using your product.

The longer you retain a client directly correlates to how much they spend on your services. That automatically leads to increased CLV.

If you notice a steady growth in a customer’s lifetime value, it can signify that they are satisfied with your product.

On the other hand, if it is declining, it could mean that your product is no longer valuable to them.

The formula for (CLV) is: Average purchase value X Average purchase frequency rate X Average customer lifespan.

For instance, if a customer subscribes to a $200 plan every month for two years, then their CLV will be:

CLV = ($200 x 1 month) x 24 months = $4,800.

5. First Contact Resolution Rate

If customers can resolve their queries on first contact with your customer care team, there is a high chance of boosting your Customer Satisfaction Score.

But if users go back and forth with your customer service while their pressing issues persist, there’s a high chance they lose total interest in your products.

Frequent resolution requests could signal that your product is complicated for users and that you might need to simplify it as soon as possible.

6. Customer Satisfaction Score (CSAT)

Customer Satisfaction Score (CSAT) is used to gauge how satisfied customers are with a company’s goods or services.

Start by asking users to rate your product on a scale of 1 – 5, or use emojis to describe their feelings represented by satisfaction levels, like ‘very satisfied, ‘satisfied’, ‘neutral’, ‘unsatisfied’, and ‘Terrible’.

You can also use the ‘Yes and No’ format.

After collecting these survey reports, extract the data and calculate your overall customer satisfaction score with this formula:

CSAT = sum of scores / total number of respondents x 100

So, let’s say you had 150 responses, and 45 were satisfied.

Calculate CSS for satisfied respondents first.

CSAT = Satisfied customers / Total customers asked x 100

CSAT = 45/150 x 100 = 30%

This means you have only 30% satisfied customers, while the remaining 70% are on the fence line or switching over to another brand due to dissatisfaction with your products and services.

Don’t forget to ask for reviews immediately when your customers are done trying out a new feature or your whole product. Feedback or satisfaction reports gotten this way are more accurate.

Conclusion

Customer Success Metrics are vital for every business since they help measure satisfaction scores and discover many possible ways to improve.

You can also use these metrics to know if users are unaware of certain functionalities and underutilized your product.

By using customer success metrics, making a detailed analysis of how users perceive your product will give your business a great head start.