In today’s world, businesses enjoy easy access to information on every aspect of their operations. Customer success metrics can be immensely valuable for a SaaS provider and are an integral component of customer success management. But not all activity or measurable phenomena are guiding lights of business intelligence. To measure customer success accurately, SaaS businesses need to move away from vanity metrics and towards those that make a difference.
Vanity metrics fall
flat with SaaS
It can be tempting to
pay too much attention to metrics that seem positive but do not provide context
for future improvements. These vanity metrics look significant to businesses.
They can include social media likes, website traffic, number of downloads, and
user number.
These vanity metrics
tell the same story of single-session or limited interactions with users and do
not tell you if your customers are actually consuming your product. More
importantly, are those consumers reaching their goals with your product? Vanity
metrics don’t provide an answer to this question. For that, you need to look at
actionable metrics that mean something to future growth.
How many of your users
are consuming your product?
In the SaaS world, high
user count seems like a sensible goal. More users lead to greater revenue.
However, since SaaS users have so many options today, and can more easily move
on to a competitor, it is crucial to ensure high adoption rates and encourage
optimal use. Together, adoption and use build a foundation for continued
success and help minimize churn.
Customer success often looks at product usage, because a subscriber can pay for a SaaS product then trail off on usage, which quickly leads to a cancellation. A high number of subscribers is only a good thing if the customers are using the product optimally or as best fits their needs and goals.
If your customers are logging in, are they using the features that will provide them with value? Do customers login only to abandon during onboarding? Each of these factors is much more important than sheer volume.
Moving beyond active
user numbers
In my experience, “Active” is usually a vanity metric. We feel good when our users are “active.” “Active” is a made-up “metric” that may or may not equate to the customer achieving success, realizing value, or doing anything that actually matters to them.
Lincoln Murphy
At first, active user counts seem like a highly valuable metric for SaaS companies, but logging in with frequency doesn’t translate to success. Activity and use are just one ingredient in a complex recipe for success. SaaS companies need to track engagement and rethink how they define an active user. Therefore, a CSM can work with a customer to identify desired outcomes from the SaaS solution, then establish a metric for that outcome. Tracking desired outcomes requires close collaboration with the customer and within a SaaS provider’s company to learn a customer’s needs and set plans in motion.
Going deeper than likes
Another valuable metric that goes deeper than the number of users and likes is the Net Promoter Score (NPS). NPS can be thought of as a highly contextualized “like.” In other words, this metric measures whether or not a current customer would refer a product to another customer. It’s not whether or not a customer likes the product, but do they like it so much that they would endorse. NPS cuts right to the heart of the matter and lets you know how valuable your SaaS is.
Conclusion
Identifying the right metrics and accessing the necessary data to get these valuable insights, requires visibility and the ability to manage and operationalize customer success. ln conclusion, SmartKarrot’s customer success platform enables SaaS providers to view all of the relevant and valuable metrics available and can also determine their customer health score, including NPS and other metrics to tap into clarity, not vanity.
Anshi has over 12 years of experience in demand generation, digital marketing, and managing global teams. In her prior role as head of marketing operations for a high growth US healthcare tech organization she transformed marketing from cost to revenue center.
Published February 28, 2020, Updated February 28, 2020
