Every successful SaaS company must be a strict disciple of the culture of the customer.
This culture reflects the current customer-centered economy that has arisen through the digital transformation of business. The personalization of subscription services means customers expect an individual experience from every product they engage in or they will simply move to a competitor.
SaaS customer engagement, therefore, needs to inform the entire customer journey. Rather than focusing just on sales and renewal, you can maximize every stage of the customer journey by delivering the right level of engagement at the right time.
In order to do that, you need to use the right SaaS customer engagement metrics. These metrics are practical measures of exactly how much, or how little, your customer is actively engaged with your product at any given time.
Key Customer Engagement Metrics
There are four key SaaS customer engagement metrics that will give you insight into how your customer is using your product. By combining these measures into an overall picture of customer engagement, you can assign a comparable score for each account and prioritize your customer success strategy accordingly.
The metrics are:
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- Monitoring usage frequency
- Correctly assessing time spent within an application
- Identifying active users
- Determining license utilization
All these metrics create an overall engagement score, which you can use to compare and prioritize accounts. That way, you can compare free trial users against each other or against pro plan users, enterprise users, and so on in order to improve engagement and drive value for your customers. It’s helpful to give customers a quarterly review to help them understand their overall health. To create such a score, you need to invest in a quality customer success platform that can capture customer data and chart progress through the entire lifecycle.
First though, let’s look at each metric.
Monitoring Usage Frequency
An at-a-glance metric that lets you know how often an individual account is used. You can measure this frequency over any time period, but it’s best to aim for around 14 days to give a measurable context. This figure can tell you if an account is accessed daily, weekly, infrequently, or, alarmingly, not at all. A low score here should send alarm bells through your entire customer success team, signaling that it’s time to check in with your customers.
Correctly Assessing Time Spent within an Application
The most insightful tools for measuring customer time spent within an application should weed out idle moments when no active engagement is recorded. Having your app left open in an unused tab is a practical fact of life, but don’t let it inflate your customer engagement. Adding together a customer’s active intervals should give you a strong indication of their engagement across any timeframe, from days to weeks.
Identifying Active Users
The number of individual users accessing your product within a broader account. An active user is anyone who accesses the app at least once during a given time period. Low or fluctuating frequencies here can indicate that you need more onboarding or direct customer interaction to drive engagement. Remember, communication can go a long way; check in with your customers, ask them how they are doing, and continue to educate them about available features.
Determining License Utilization
This metric measures the number of active users against the number of licenses the customer has purchased. It lets you monitor customer uptake percentage against the capacity and gather evidence for customer interaction or upselling opportunities.
All these metrics can be measured against specific values, allowing you to prioritize customer success efforts by account hierarchy and individual customers. Moving away from a sales-first mentality and toward the more rewarding, recurring revenue model of a customer-centered approach means accurately tracking your customer engagement throughout their journey.
The metrics, however, are only an insight into where and when to act; you must also leverage this information to continually improve customer engagement. It’s important to clearly communicate with customers about these metrics and take action to make them feel valued.
Improving Engagement
Improving SaaS customer engagement breaks down into two distinct functions:
- Paying attention to your customers
- Keeping your customers happy
To provide the customer with the personalized approach only a customer-centered company can provide, you need to be obsessive in your knowledge of their business. From there, it’s a matter of providing the right customer engagement to create a multi-cycle relationship that fosters growth and recurring revenue.
Paying Attention to Your Customers
Creating a culture of the customer requires empowering everyone in your company to participate in customer success. So, give every staff member, across every department, safe access to customer data, either directly through updates across collaboration tools like Slack or indirectly by storing and sharing data in accessible accounts. Your employees will then be empowered to participate in cross-functional customer engagement and rapidly share customer information.
You can never know enough about your customer, and every interaction—from transactional data and the usage metrics outlined above to helpdesk tickets and survey responses—is a potential insight. Knowing how your customer operates and determining how your product can best meet their needs is a crucial part of maintaining your relationship.
Keeping Your Customers Happy
To keep your customer happy, you have to understand and act on their pain points. There are many practical methods for achieving this, but we’ve outlined a few below:
- A rapid, efficient onboarding program quickly moves your customer from visualization to realization. The faster they start to see the practical ROI-value of your product, the happier they’ll be with your service.
- Constantly educate your customer about your services. If you notice a customer is regularly engaged with only a few of your applications, proactively communicate with them about the benefits of the services they’re not fully utilizing.
- Personalize your communications around your customer’s specific needs and status. Help them establish goals that will reassure them of their progress with your product and acknowledge their growth.
- Promote long-term growth opportunities and provide insight as to how your product can remain relevant to their company as it transitions in scale and diversity.
By constantly driving customer value, you can break the sales and renewal cycle and establish customer loyalty across their journey.
SaaS Customer Engagement Begins with the Right Metrics
The digital transformation of business has lowered the barrier for entry to customers and created a new set of pressures for SaaS companies. To provide the individualized service customers demand, you must configure your enterprise in the mold of the culture of the customer. That means gathering and correctly analyzing all the customer data you can using the right metrics and then applying that knowledge to drive constant customer value.
Your company becomes a reflection of your customers. Your goals grow in partnership with theirs, and you reap the ongoing rewards of a multi-cycle relationship.
Totango’s customer success platforms help you access in-depth, timely customer information across hierarchies and segments, letting you provide the personalized service today’s SaaS customers demand. Explore Spark or request a demo to learn how to retain your most valued assets—your customers.
Image courtesy of gstockstudio.
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