User Engagement Metrics every successful SaaS should measure


When operating a SaaS company, we frequently assume that the number of users in our database is the most crucial piece of information for us. On the one hand, this is evident, but on the other, it is debatable whether the quantity of users is what enables us to assess our performance within a given time frame.

The other crucial question is the existence of these users as active users instead of merely having so-called dead accounts in your app. Digital marketing experts know that having a sizable user base is not necessarily the solution to issues with business growth.

The success of an application depends on its user base as well as how they interact with its many features. The finest SaaS companies pay close attention to specific engagement indicators to gauge the situation and measure appropriate user behavior, which enables them to build a sizable base of devoted consumers. More business growth results from this. 

While gaining new customers is crucial, your business is a leaky house that will drown everyone inside if you can’t maintain user engagement.

What Are Customer/User Engagement Metrics?

User engagement track how customers engage with your brand and merchandise across various channels and touchpoints during their buying cycle.

A sticky product that keeps people interacting with it is necessary to increase customer engagement rates. Even though you might believe you’ve built it, tracking customer engagement metrics might provide more accurate information about how users are reacting to your product.

The customer engagement metrics highlight flaws in your product or the consumer journey. You can use this to choose where to direct your attention to increase retention rates.

You must consider user engagement levels at various stages of the user experience while maximizing consumer engagement. 

Three methods exist for gauging user engagement:

1. Determine client engagement by channel of purchase

This demonstrates which cohort or section of your various marketing initiatives generates the best LTV-CAC ratio and engagement rates. By doing this, you may optimize your user acquisition approach by learning which channels bring you the most users.

2. Assess client satisfaction by feature use

You may gain insight into how consumers interact with the various components of your product by monitoring feature usage. It aids in your comprehension of the priorities of your target market and directs your product development efforts and in-app onboarding procedure.

3. Use a customer engagement score to gauge consumer engagement

This informs you of the probability of achieving particular results (retention or churn) based on how well customers interact with your product.

Why Is It Important to Track User Engagement Metrics?

Customer engagement metrics consider the various ways customers engage with your product throughout their journey.

Utilizing product usage analytics and focusing on particular metrics at each user experience stage will be necessary to measure this. For this, the majority of SaaS providers employ the pirate metrics framework.

Pirate metrics are a mechanism for collecting and monitoring metrics at various points in the consumer funnel. The abbreviation “AAARRR” stands for acquisition, activation, adoption, retention, revenue (expansion), and referral. This funnel is also known by this name.

Top SaaS User Engagement Metrics Of 2022

The following are some of the most critical customer success metrics for SaaS companies:

Customer Lifetime Value 

Customer lifetime value (CLV) is the entire profit a business can anticipate making over the course of a certain customer relationship. It’s one of the most acceptable methods to link customer success initiatives with the most important statistic – revenue — to measure customer success.

Customer lifetime value combines the effects of two crucial performance measures that are affected by your customer success operation:

  • Annual sales per client
  • Average duration of a client relationship (in years)

Your company should be able to enhance both of those figures with the help of a strong customer success team, which will have a cumulative influence on customer lifetime value.

Revenue Churn 

To assess the potential external influence some customers may have over others, it is critical to analyze revenue churn alongside customer churn. The customer churn rate could be very different from the churn rate if certain customers earn more money than others, especially if the subscription fee is changeable depending on the number of seats or users a client pays for.

To avoid being caught off guard when you present your total figures every quarter or year, make sure to track both customer and revenue turnover.

Qualified Marketing Traffic

Existing users can log in on the majority of SaaS websites by clicking the login link, which is typically in the top menu. This implies that as your user base grows, so will the traffic volume as a whole. This may result in false data, displaying a larger traffic growth due to marketing activity when this may not be the case.

People who are most likely to become future or recurrent customers make up this category of traffic. It’s crucial to track these repeat consumers separately from your qualified marketing traffic for this reason. You may create a strong traffic-generation strategy and set meaningful traffic KPIs if you can distinguish between these two groups.

Leads By Lifecycle Stages

A lead has undoubtedly been described in various ways. This is due to the fact that the definition changes depending on where the prospect is in the purchasing cycle or customer lifecycle. If a candidate who has begun their investigation is considered a lead, two subcategories later in the lifecycle might be:

A prospect who has done additional research, such as downloading ebooks and coming back to your website, is referred to as a marketing qualified lead (MQL).

A prospect who has advanced past the preliminary research stage is probably assessing vendors and is worthy of a direct sales follow-up known as a sales-qualified lead (SQL).

Lead to Customer Rate 

Your ultimate objective is to drive customers, correct? Think about how important lead-to-customer rates are.

This indicator demonstrates exactly how well—and consistently—you are producing leads that are ready to be sold. It lists the average number of leads that become paying clients. In other words, it demonstrates the effectiveness of your lead nurturing and sales processes.

Calculating the lead-to-customer rate is simple. Divide the total of your leads by the total of your customers for any given month, then multiply the result by 100. For instance, a 1% lead-to-customer conversion rate would be achieved with five customers in a month and 500 leads.


Any SaaS company can expand its clientele and succeed by comprehending, monitoring, and enhancing the metrics mentioned above. Additionally, the improvements do not need to be significant. Even modest modifications might help maintain the health of your company.

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