7 Essential SaaS Performance KPIs to Track and Optimize Your Product
Here's an eye-opening statistic - SaaS businesses that track KPIs 3x their chances to hit growth targets.
Let's cut through the noise and focus on what really matters - the 7 essential SaaS performance KPIs.
#1 Activation
• The metric measures the number of users who activate subscriptions during a trial period. It usually takes place when users experience the value of a product.
• The formula used to calculate the metric is: Activations = (Trial Signups ÷ Subscriptions Activated) x 100
#2 Viral Coefficient
• The metric measures the organic growth rate of your product through word-ofmouth referrals.
• It helps optimize your product's viral loop and identify potential bottlenecks.
#3 MQL-to-SQL Conversion Rate
• The metrics help understand the quality of leads and the effectiveness of marketing campaigns.
• Lead Conversion Rate
Formula = (Sales-qualified leads / Marketing-qualified leads) x 100
#4 CAC Payback Period
• The metric measures the time a company recoups the cost of acquiring a new customer.
• CAC Payback Period = CAC / (MRR per customer x Gross Margin %)
#5 Annual Recurring Revenue (ARR)
• ARR measures the predictable and recurring revenue generated by a product annually.
• ARR is calculated by multiplying the average monthly recurring revenue (MRR) by 12.
#6 Daily Active Users (DAU)
• It tracks the total number of unique users interacting with the product at least once daily.
• DAU helps companies track user engagement levels and monitor daily user growth or decline.
#7 Customer Satisfaction Score (CSAT)
• CSAT score measures customer satisfaction with a product or service.
• The CSAT formula = (Customers who responded positively / Total customers surveyed) x 100