Having happy customers is critical for the success of any business, and SaaS companies are no exception. In fact, attracting, retaining, and establishing profitable long-term relationships with customers is even more important for SaaS companies because it’s the key to the recurring revenue model they’re built around. Of course, to ensure customer success, you need to track the right metrics to understand what’s happening in your business and how your customers perceive their experience using your solution. 

In this post, we look at seven customer success metrics that every SaaS company should be paying attention to as they seek to drive growth and deliver better customer experiences.

1. Customer churn

Customer churn is the percentage change between the number of customers you had at the end of one month versus at the end of the previous one. And while companies always see customers churn month to month for one reason or another, measuring and tracking customer churn over time is important to identifying trends, understanding why customers are canceling their subscriptions, and developing strategies to help retain them. 

2. MRR churn

Monthly recurring revenue (MRR) churn is very similar to customer churn, except that it’s focused on the revenue gained or lost month over month, rather than the actual customers. Because SaaS companies offer their customers different packages, plans, and add-ons, it means they don’t all drive the same amount of revenue. Measuring MRR churn gives companies a more accurate picture of the impact of customer churn on their bottom line.

3. Net MRR churn

Perhaps the most telling revenue churn figure, net MRR churn doesn’t include any expansion revenue. That means it gives companies a clear picture of whether customers are sticking with their payments on a month-to-month basis, which in turn is an indication of whether or not they’re getting ongoing value from your product.

4. Expansion MRR

The concept of expansion revenue may be a relatively new one for some SaaS founders. The idea is that while customers might start off on a $10,000 annual plan, over their lifetime the fees they pay will hopefully increase. To help ensure that happens, SaaS companies need to figure out their pricing, packaging, and plans, and make sure they have both a value metric and add-on metrics. Understanding expansion revenue on a month-to-month basis can be extremely helpful for customer success managers who are accountable for upsells, cross-sells, and revenue retention.

5. Net promoter score

A company’s net promoter score is an indication of how many of its customers are active promoters of its product. In other words, on a scale of one to 10, how likely are customers to recommend the company and its product to their peers and colleagues. That number will tell you a lot about their experience with your product, customer support, and sales. You can also use it to identify potential ambassadors to help promote your business and bring in referrals.

6. Customer satisfaction score

After a customer has had certain interactions with your company and used your product, you’ll want to find out how satisfied they are. Using customer support polls to ask targeted questions will give your customer success managers a good overview of what you’re doing well, as well as what needs improving. This can be as simple as asking customers to rate their customer support experience on a five-point scale. While not a deep dive, it’s a simple way to pull useful insights and allocate additional resources to training, as well as establishing goals for your customer success team.

7. Customer experience score

Customer experience scores are becoming increasingly important in SaaS. That’s because a SaaS customer journey has multiple steps, from onboarding and activation, to adding modules and integrations. It therefore helps to monitor the experience scores for those specific actions so that customers can give you feedback at each stage.

Again, even if it’s a simple one to five rating, customer experience scores can reveal where in the journey your company is falling down and risking customer churn, and how to prioritize customer success activities.

Keep your customers happy

Unless you’re tracking your customers’ satisfaction at multiple points across their dealings with your company, you won’t have a complete picture of how you’re performing, or why customers choose to leave (or stay). Keeping tabs on their experiences and happiness levels across the business using established metrics will help ensure their long-term success, and yours.