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SaaS Metrics that Matter for Customer Success

Joanna He
Senior Director of Global Growth
Nov. 15, 2023

SaaS businesses use metrics tracking to understand their performance in delivering efficient customer services. However, there are many metrics for customer success, which can often lead to a million-dollar question: which metrics genuinely matter for customer success?


Tracking the wrong metrics can divert your attention to the wrong priorities, misdirect resources, and ultimately impact customer satisfaction and revenue. It's essential to understand which metrics to focus on and why. This article aims to provide insights into crucial metrics that drive customer success, their importance, and why you should track them with Kyligence Zen.


Why Tracking SaaS Metrics Are Essential for Customer Success


Tracking the right SaaS metrics is like having a compass pointing in the right direction. It's essential for understanding and optimizing how you acquire, engage, and monetize your SaaS offer.


Understanding and Optimizing Customer Acquisition and Engagement


Tracking the right SaaS metrics will help you understand where customers come from and what captures their interest. This information lets you fine-tune marketing strategies and product offerings to boost engagement levels. For example, after analyzing the journey from a visitor to a lead stage, you identified emails as the top engagement channels. Understanding that the touchpoint resonates with potential customers helps you tailor your initial strategy to deliver a seamless user experience that converts engagement into more sales.


Monetizing Various Offerings and Aligning Growth Models with Product Usage


Tracking SaaS metrics allows you to determine the best-performing offers and which may require an upgrade. With these insights, you can make better decisions on feature development, bundling, and pricing strategies. When you align growth models with product usage data, you go beyond just selling and build a culture that fosters simultaneous growth alongside customer needs.


Benchmarking and Improving Performance Through Diagnosing Friction Points and Identifying Growth Opportunities


Tracking operational metrics like lead generation sources, activation rates, and conversion trends allows you to identify areas with great results and others that need to improve. You will also identify friction points in the customer journey through comparative analysis, allowing for personalized improvements. With these proactive insights, you can deploy solutions that don't just meet launch deadlines but exceed customer expectations.


What are the Key SaaS Metrics for Customer Success


Here are some key SaaS metrics to measure customer success


Operational Metrics


Operational SaaS metrics allow you to establish a solid benchmark for your business performance. The Insights generated from tracking metrics in this category help you measure growth and identify friction points and opportunities.




Discovery metrics are KPIs that reveal how users learn about your product and the efficiency of the awareness drive. At this stage, your focus is on understanding the performance of different channels and initial user engagement. Moreover, tracking discovery SaaS metrics helps you create targeted strategies that drive relevant, high-intent traffic to the website at a cost-effective rate. SaaS metrics that matter for customer success at the discovery stage are:

  • Unique website visitors excluding customers (UVECs)
  • Lead generation by source (ex: paid versus non-paid channels)



At this stage, you want to understand how well your messaging and other digital assets communicate your value. Tracking metrics at this stage will help you identify areas where customer experience is challenging and the website's conversion performance. Here are metrics to focus on at this stage:

  • Conversion from website visitor to lead
  • Volume of activated sign-ups
  • Cost per activated sign-up



At this stage, your focus is to understand how well users realize the value of your product. If your process is optimized and efficient, users should engage more with your solution. Metrics to track at the activation stage are:

  • Activation within (7) days
  • Activation rate by source and by persona
  • Conversion from first-order activation (ex: activation in single-player mode) to second-order activation (ex: activation in multi-player mode)



At the conversion stage, users have engaged with your SaaS solution and decided to move into a paying customer category. Your focus at this stage should be metrics that help you measure the effectiveness of the conversion process. It will also guide you in understanding the willingness of users to subscribe to your offer. Insights from SAAS conversion analytics are critical for optimizing processes for better revenue performance. Here are essential metrics to monitor at this stage:

  • Cohorted free-to-paid conversion within (30) days from sign-up
  • Product-influenced or product-driven revenue

Learn more by reading why and how to track operational metrics for SaaS product-led growth.


Executive and Investor Metrics


Executive and investor KPIs measure and communicate the business performance and strategy impact to stakeholders. It helps convince them of your activities' effectiveness in achieving strategic goals and milestones. Here are essential metrics to track for executive and investor.


Annual Recurring Revenue ("ARR")


Annual Recurring Revenue (ARR), is the total amount a company generates yearly from its subscriber. It's an essential SaaS metric to predict the amount of revenue the company will generate every year.. In product-led growth companies, a high ARR is a strong indicator of customer commitment and a positive financial health. It's also relevant in forecasting future growth, which guides budgeting, inventory management, and setting a benchmark to track performance.


ARR: ARR=12 X Monthly Recurring Revenue


Change in Net New "ARR"


The net new ARR measures the growth in ARR over a specific period. It serves as a metric to measure the awareness of the target audience of your product, which reflects in revenue growth. Typically, a positive net new ARR indicates that your product is becoming more popular and driving revenue growth. In contrast, a negative result means you aren't delivering the expected value, and your products need improvement for better market fit. 


Net New ARR = New ARR (New Customers) + Expansion ARR (Existing Customers) – Churned ARR (Lost Customers)


Net new "ARR" Vs Cash Burned


The net new ARR vs cash burned metric helps you compare the increase in ARR to the amount of cash spent over the same period. It's a vital SaaS metric to understand how efficiently you increase recurring revenue relative to expenses. A high ratio means you must review your growth strategy and improve the efficiency to guarantee business sustainability. 


Net new ARR vs. Cash Burned = Net New ARR in period (X) / Cash burned in period (X)


Cohort-based Retention by Customer Type


Cohort-based metric measures the retention rates of different customer groups or cohorts over time. It gives you a detailed view of customer loyalty and product engagement. The results from tracking these metrics help to review and optimize strategies that boost customer retention.


Cohort-based retention by customer type = Total active user within a period (X) / total number of users in a cohort


Reason to Track SaaS Metrics with Kyligence


Kyligence Zen is an analytics tool with AI-powered features that helps you track your SaaS metrics from one location. Here are some benefits you get from using Kyligence.

  1. Consolidate fragmented data sources to view the SaaS metrics across different user journeys comprehensively.
  2. Leverage Goal to make sure the executive and investor metrics are on track to gauge the overall healthiness of the business model.
SaaS goals tracking in Kyligence Zen Enterprise+

3. Use AI Copilot to quickly stay on track on the operational metrics and make quick adjustments to product operational tactics driven by automated metrics insights provided by AI Copilot.


Track SaaS Metrics for Customer Success with Kyligence


SaaS metrics are like a compass that aids customer success, providing insights into all stages of user interaction with your product and how it affects revenue growth. Choosing the right metrics to measure empowers you with insights to make data-driven decisions. Utilizing these insights results in enhanced customer experiences, optimized product offerings, and support sustainable growth drive. Kyligence Zen offers an analytics platform that allows you to measure the right metrics from a centralized location. Hence, you understand your company's current position and chart a course for future success. Are you ready to turn data into your competitive advantage? Sign up on Kyligence Zen for a free trial today and experience personalized AI-powered analytics to boost the company's success.