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