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Top SaaS Customer Engagement Metrics

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Last editedJan 20233 min read

Customer satisfaction is a key element of success for SaaS companies. It’s important to continually find ways to boost engagement with your services, but how can you ensure your business stays on track? Which metrics can be used to measure customer engagement? Follow these SaaS customer engagement metrics to determine what’s working – and what’s not. This not only helps with decision making, but outlines areas for improvement.

1. Customer churn rate

Churn rate is always one of the most important SaaS metrics. It shows the percentage of customers cancelling their services or simply failing to renew a subscription. A high churn rate can have many causes, but it indicates that your customers are dissatisfied for some reason. This could be due to high prices, inconvenience, or stale products.

2. Customer lifetime value (CLV)

Customer lifetime value assigns a numerical value to each customer over the long term of your relationship. A high CLV shows that you’re succeeding with SaaS customer engagement by retaining customers over a long term. Yet it looks not only at the length of the customer relationship, but also at the annual revenue each customer brings in. It’s calculated by multiplying annual revenue by customer relationship in years. Subtract the customer acquisition cost from this figure to arrive at average customer lifetime value.

3. Net promoter score (NPS)

When customers are happy with your services, they’re more likely to recommend them to others. A company’s net promoter score, or NPS, looks at brand loyalty and engagement. To determine NPS, you’ll need to engage directly with your customers. Ask them to give a numerical rating on a scale of 0-10 of how likely they are to recommend your services. You can average these numbers to find out how you rank on the scale. 

4. Repeat purchase rate (RPR)

Actions speak louder than words. Customers might say they’re happy with your services, but how frequently are they making purchases? A high repeat purchase rate (RPR) indicates that your customers are engaged, satisfied, and want to keep spending money. To calculate RPR, you can divide the number of customers making a repeat purchase by the total number of customers over the same period.

5. Customer satisfaction score (CSAT)

The customer satisfaction score, or CSAT, is very similar to the NPS. However, you’re asking your customers for personal feedback rather than how likely they are to recommend your service to others. Self-reported customer engagement metrics aren’t as accurate as hard figures like sales, but they still yield valuable insights. You can tailor the questions to suit your services:

  • How useful did you find the product?

  • How helpful were our customer service agents?

6. Customer effort score (CES)

When asking your customers for feedback, you can also tally these responses to arrive at a customer effort score (CES). The CES measures how much work a customer needs to put in to successfully engage with your product. Ask customers to rate this effort from a scale of 0-10. Did they find it hard to start using your service? Was the checkout process easy? Ideally, your user experience should be streamlined from start to finish.

7. Customer retention cost (CRC)

How much does it cost to retain each customer? This metric looks at how much your business is spending on customer retention. You can then compare it to customer lifetime value to determine if your investment is worth it. To calculate CRC, you must divide the total annual cost of customer retention initiatives by the number of current active customers. This gives you a breakdown of cost per customer.

8. Bounce rate

The SaaS customer life cycle begins with acquisition, which is why bounce rate is such an important metric. This shows the percentage of your website’s visitors who leave the site after only viewing a single page. A high bounce rate indicates that you need to work on your acquisition strategy, as you’re not engaging sufficiently with sales leads on first impression. A low bounce rate means that you’re attracting a larger percentage of visitors. Enticed by the landing page, they visit additional areas of the website which means they have interest in your services.

These SaaS customer engagement metrics provide an important starting point for crafting a more successful strategy. Don’t fail at the final hurdle with involuntary churn due to failed payments. It’s estimated that 30% of customer churn is involuntary, but GoCardless offers an alternative to help retain your customers with a smooth payments process. Reduce churn by offering automated, pull-based payment collection directly from customer bank accounts. Around 97.5% of payments are collected successfully the first time around – an easy way to boost engagement.

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