Main Takeaways: -Understand what data is essential for your success -How to work towards your metrics -Key differences between necessary and unnecessary metrics

1. 10 Metrics Every SaaS PM Should Use
by fmr Facebook Product Leader
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5. 10 metrics that every
SaaS PM should use
Anand Arivukkarasu
VP, Product Refersion
Ex- Facebook

6. About Myself
Software Engineer Product
Manager
Product Growth
Leader
VP Product
15 years
Advisor & Mentor
...

7. The 10 Metrics
1 Business Metrics
2
3
Product Metrics
Customer Metrics
4
5
6
8
9
10
7
Churn and Retention Rate
1
2 Customer Lifetime Value
3
Monthly Recurring Revenue (0r ARR)
Product Usage
Product Stickiness
Feature adoption & retention
Product Quality & Efficiency
Net Promoter Score (NPS)
Mission Metric (ROI)
Customer Acquisition Cost

8. Business Metrics

9. MRR and ARR help understand whether your
SaaS organization is generating revenue. These
metrics are glimpses into how your product is
selling. MRR and ARR also indicate SaaS
organization’s primary indicators for growth.
SaaS PMs can develop certain product features
and experiences using MRR/ARR
Why?
MRR = Numbers of Customers X
Average Monthly Billed Amount
Monthly Recurring Revenue MRR (or ARR)
Feb
Jan Mar
$ Mn
Apr May Jun Jul
Base Premium Premium plus

10. CLTV is how much revenue customers will bring
during their time as a paying customer. This
metric is helpful to SaaS PMs when deciding
how much to spend on obtaining new
customers, how much to dish out to keep
existing customers or where to allocate
resources.
Why?
CLV = Average Value of Sale X
Number of transactions X
Retention time X
Profit Margin
Customer Lifetime Value (CLV)
A B
30 10

11. CAC answers the question: are we spending too
much to get customers? Tracking CAC lets a
SaaS PM adjust, pivot, swerve to improve
product strategy. By itself, CAC can be
beneficial for budgeting, planning or resource
allocation. CAC’s real power is unlocked when
combined with LTV because that’s when you
can truly evaluate ROI
Why?
CAC = Sales expense + Marketing expense
New customers
CAC
CLTV > CAC
CLTV
Customer Acquisition Cost (CAC)

12. Churn & Retention rate
Week 1 Week 2 Week 3 Week 4
Retention = Users @end of period - Users @start of period
Rate Users @start of period
Joining
week
User
cohort
Aug 1
Aug 8
Aug 15
Aug 22
Aug 29
Churn = Churned customers
customer acquired
When your customers are leaving, that’s
something SaaS PMs need to monitor. Make
churn a primary concern as your early adopters
ramp up monitor churn rate while moving
further into the market. With Retention you are
looking at the opposite of Churn and is
important to understand users by cohorts.
Why?

13. Product Metrics

14. Product Usage
1 Breadth*
2
3
*Pendo blog on KPIs for product leaders
Depth*
Frequency*
Definition Measurement
Using this BDFU Framework, a product
manager can get a holistic assessment of
the Product usage and health. This can
also be used at the Feature level.
Why?
# of users for a given
customer
# of active users for a given
customer in last 30 days
Is the customer using key
features?
% of customers that are
using 5-8 key features
How often they access
the product?
# of logins/sessions across
users for a given customer
4 Usability
How long does it
take for the user to
complete tasks
Average amount of time for
user to complete a task

15. DAU/
MAU
Daily/Monthly = 45%
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7
Product Stickiness
Product stickiness = Daily Active Users
Monthly Active Users
As a product manager, you want to build a
product that not only attracts new users, but
also ensures they continuously re-engage with
it. It’s important to understand when the
buying journey transitions to the product
journey. It’s this stage where the product takes
on a more central role in the customer
experience
Why?
*Pendo blog on KPIs for product leaders

16. Feature Adoption & Retention
This helps identify and prioritize which features
are heavily used and which features are used
less. This metric will help in setting up goals
and KPIs.
Why?
Feature 1 Feature 2 Feature 3
Q 1 Q 2 Q 3 Q 4 Q 5 Q 6
# of
Customers Feature Adoption = # of Users who use a feature X
Rate Total Users active in that period
Feature Retention rate =
Feature Users @eop - Feature Users @sop Rate
Feature Users @sop

17. Quality & Efficiency
Bugs by Product feature
Bug Reduction rate = Q3 Bugs fixed - Q4 Bugs Fixed
by quarter Total Bugs created
Why?
There are two measurements that can be really
helpful here. The first is to look at a breakdown
of product bugs by feature. That way, you can
pinpoint the buggiest parts of your product and
devote more resources to fixing them.
The second measurement is the number of bugs
reported versus the number of bugs you’ve fixed.
This is something that can be measured over
time
*Pendo blog on KPIs for product leaders

18. Customer Metrics

19. Net Promoter Score (NPS)
Promoters
Score 9-10
Detractors
Score 0-6
Passive
Score 7-8
NPS= % of Promoters - % of Detractors
As a product manager, you want to build a
product that not only attracts new users, but
also ensures they continuously re-engage with
it. It’s important to understand when the
buying journey transitions to the product
journey. It’s this stage where the product takes
on a more central role in the customer
experience
Why?

20. Customer Mission Metric
Feb
Jan Mar Apr May Jun Jul
ROI = total value gained
- total cost ( SaaS cost + time)
As a product manager, if we can measure that if
the customer is able to achieve their mission
using our product ex: increase in revenue, including
the cost incurred using the product and the cost
spent on the hours users have to use the product,
we are truly moving towards understanding end
customer success with our product. Depending on
the SaaS product this metric is direct or
estimated on the value they receive.
Why?
ROI +ve
# of customers
ROI -ve

21. Conclusion

22. Things to Avoid
1
2
3
One Metric That Matters
(OMTM) approach
Having the right measurement
system and definitions
Not considering quality signals
and surveys etc

23. Feel Free to Follow & Connect with me @
Linkedin
https://www.linkedin.com/in/anandarivu/
Thank You

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