5 customer success metrics for SaaS that you must track

As a support representative, you know that acquiring new customers is just the beginning of the journey. The real challenge lies in keeping them happy and engaged over the long haul, especially when it comes to companies reliant on subscription-based revenue models, like those prevalent in the SaaS industry. That's where customer success metrics for SaaS come in.

By tracking the right performance indicators, you can gain insight into how your customers are interacting with your company’s product or service, and identify areas for improvement.

In this article, we'll show you how to measure customer success in SaaS, recognizing the unique challenges and opportunities presented by the recurring nature of the SaaS model. This includes evaluating metrics such as churn rate, net promoter score, CSAT, and more.

By understanding these KPIs and how to use them, you can build a more prosperous and sustainable business.

What are customer success metrics in SaaS?

Customer success metrics in SaaS refer to the indicators used to assess the effectiveness of a software as a service company's customer success program, strategy, or initiative. Their goal is to determine if customers are using the product to its fullest potential, and whether they’re achieving their own desired outcomes.

Why is it important to measure customer success for SaaS?

1. Evaluate the ROI of happy customers

By investing in customer success, companies can significantly increase retention rates and create opportunities for upselling, which ultimately translates into a higher return on investment.

Not only are satisfied customers more likely to continue using the product, they’re also likely to recommend it to others. In fact, a Nielsen study showed that 89% of consumers trust recommendations from people they know.¹

2. Leverage data for informed decision-making

In today's data-driven world, businesses that fail to gather, analyze, and use data to make informed decisions risk falling behind their competitors. According to McKinsey’s predictions, by 2025 most employees will use data to optimize nearly every aspect of their work – and it’s fair to assume that customer success will be a part of this optimization revolution. ².

By measuring customer success metrics, SaaS companies can identify areas that need improvement, sharpen their understanding of performance trends, and take appropriate action to improve customer satisfaction. Additionally, data-based insights can help businesses to improve product offerings and build stronger relationships with customers.

How to measure customer success in SaaS

1. Churn rate

Churn rate reveals the percentage of customers who stopped paying for products or services from your company over a specific period of time. It’s one of the primary customer success metrics SaaS companies use to determine how satisfied customers are with your offerings and gauge the overall experience they’re having.

Churn rate formula

(Customers at the beginning of the analyzed period - Customers at the end of the analyzed period) ÷ Customers at the beginning of the analyzed period x 100

Find out how leading companies are reducing their abandonment rates: A modern primer for retaining customers: Strategies from Intercom, Productboard, and FullStory.

2. Net Promoter Score (NPS)

Net Promoter Score is a must-have customer success metric for SaaS companies. It shows how likely current customers are to recommend your products and services to friends, acquaintances, or family members. The rating is collected through a brief survey, providing valuable insights into the effectiveness of your CS strategy and pinpointing areas for improvement in the customer experience.

NPS formula

NPS = % promoters - % detractors

Using the feedback you’ve received, you can categorize customers into three segments distributed across a scale from one to 10. For example, you might identify those who pick 0 – 5 as detractors. Respondents selecting 6 – 8 could fall into the passives category, while those choosing 9 or 10 can be labeled as promoters (additional details on our NPS survey methodology are available here). 

3. Customer Satisfaction (CSAT)

Customer satisfaction (CSAT) is a metric that indicates the level of contentment your customers feel toward your business. CSAT encompasses both your product or service and the overall experience offered throughout a customer’s journey with your company. As a result, CSAT is closely tied to other customer success metrics for SaaS, as better experiences lead to happier, more satisfied customers.

CSAT formula

CSAT (%) = Number of satisfied customers (those rating your 4 or 5) ÷ Total number of responses x 100

4. Customer Effort Score (CES)

A customer effort score (CES) evaluates how hard it is for a person to have their request fulfilled, whether it's getting a specific question answered or signing a contract. This metric is significant because customer success is frequently influenced by the level of effortlessness customers enjoy when engaging with a brand. The easier and more seamless companies make these interactions, that is, the higher customer success levels will go. 

CES Formula

The customer effort score falls within a scale of 0-100. Your CES is calculated by dividing the total number of customers who acknowledged that their interaction was easy by the overall number of responses. For instance, if 80 out of 120 customers rated you 5, 6, or 7 on a 7-point scale, your CES would be 0,66 or 66%.

5. Health score

A customer health score aids customer success teams in gauging the well-being, as well as the potential risks, of your current customers. While scoring systems differ among companies, the goal is to evaluate the likelihood of a customer staying or churning.

This approach guides your success team in directing their efforts, attention, and resources proactively, addressing issues before they escalate and allowing for effective abandonment mitigation.

6. Retention rate

Retention rate is a metric used to measure the percentage of customers who continue to use a product or service over a given period.

Retention rate formula

(Number of customers at the end of a period - number of new customers acquired during that period) ÷ number of customers at the beginning of that period.

In the context of SaaS businesses, tracking retention rate is crucial because it helps to identify the effectiveness of customer success strategies and the overall health of the business. A high retention rate indicates that customers are satisfied with the product and are likely to continue using it, leading to increased revenue and growth.

7 practices that impact your customer success metrics for SaaS

Now that you're familiar with the key customer success metrics for SaaS, it's time to delve into effective tactics and strategies that can significantly enhance them.

1. Provide a seamless onboarding process

Providing a seamless onboarding process is one of the best practices for SaaS companies to improve customer success. It’s the first impression that a customer gets about the product, and it sets the tone for their entire experience.

A smooth onboarding process involves guiding users through the product's features and functionalities in a way that is easy to understand and navigate. It should also include clear instructions on how to get started and ways to reach out for support if needed.

This can help customers realize the value of the product almost immediately, helping to build the strong foundation necessary for a long-lasting relationship. This, consequently, directly influences your customer retention rate.

Our Product Tours, for instance, allow companies to build code-free journeys that engage customers from the get-go. They’re equipped with audience targeting and templates to help you create delightful experiences.

2. Empower users through educational resources

Empowering users through educational resources is one of the most effective ways to improve customer success for SaaS companies.

By providing users access to tutorials, webinars, and other materials, they’re able to better understand how to use your product and get the most out of it without putting in excessive amounts of effort. This not only leads to higher customer satisfaction, but also reduces support requests and increases retention rates.

In addition, educational resources can help users discover new features and use cases they may not have considered before, which can further enhance their experience and drive additional value for the SaaS company. Furthermore, such functions have the potential to reduce the effort required for customers to take actions on their own.

If you need inspiration, take a look at our tooltip feature; it points out specific features and provides in-context help for customers in places where they might get stuck.

3. Offer multiple channels for support

Providing different communication channels, such as email, chatbots, phone, and social media, allows customers to choose the channel that works best for them.

This flexibility empowers customers to reach out for help on their own terms, leading to a more positive experience with your company.

Additionally, utilizing multiple channels allows businesses to provide personalized support, which in turn strengthens the relationship with customers. Motivated by the positive experience of feeling supported 24/7, your customers may feel more comfortable recommending your brand to their acquaintances, thus boosting your NPS.

4. Keep up proactive communication with your customers

Fostering a proactive and dynamic communication strategy with your customers stands as an indispensable cornerstone for improving customer success metrics for SaaS companies. It helps in building trust, anticipating customers' needs, and resolving their issues in a timely fashion. 

By regularly communicating with customers, you can keep them informed about new features and updates, and promptly address any concerns they may have. A proactive approach to communication also allows you to gather feedback and insights, which can help drive product development and enhance customer experience. Combined, these elements prevent your churn rate from scaling up.

Need help regaining control of your inbox? Check out this article: The support leader’s guide to proactive support: Provide help before it’s needed.

5. Build a dedicated customer success team

The success team plays a crucial role in guaranteeing that customers achieve their intended goals and derive optimal value from utilizing your product.

The team should be composed of individuals who possess excellent communication and problem-solving skills, and who have a deep understanding of the product and the customer's needs surrounding that product. 

A dedicated customer success team can proactively address customer issues, provide timely support and training, and gather feedback to improve the product. These professionals can also monitor your customers’ health scores, ensuring that they are consistently positive – and take specific, targeted actions if they start to tick down. 

Figure out what you need in this article: The 3 pillars of a high-performing customer success team.

6. Use customer data to personalize their experience

Personalization is key to improving customer success for SaaS companies. By using customer data to tailor their experience, companies can meet the unique preferences of each customer. Customization can be achieved through a variety of means, including tracking user behavior and using the data from that tracking to recommend relevant content or features.

Needless to say, making each customer feel valued through an approach that prizes personalization and specificity can deeply improve your company’s CSAT score.

7. Establish mechanisms for feedback loops

Feedback loops create a culture of continuous improvement that is essential to the success of any SaaS company. With a clear collection mechanism in place, you can actively seek out and listen to customers’ opinions and incorporate them in your product development process.

By doing so, you prevent customers from feeling unheard and abandoning your brand. At the same time, you also show that you’re committed to doing better, which can enhance both your CSAT and NPS scores.

Turn numbers into action with Intercom

Now that you know what the five main customer success metrics for SaaS are and how to calculate them, you’re prepared to take the next step and transform these numbers into concrete actions that advance your business.

With the Intercom platform, you’re able to onboard, educate, and notify your customers with in-context, automated messages — cutting support volume and keeping customers happy. And the best part? You can get started in minutes by leveraging our no-code tools and pre-built templates for popular use cases.

Ask for a demo or start a free trial today to experience first-hand how we can help you achieve great results.

Sources

1 Nielsen, Getting closer: Influencers help brands build more personal consumer connections.

2 McKinsey, The data-driven enterprise of 2025.