10 Key Quantitative Metrics That Are Essential for Measuring Success & How To Optimize Them?

Do you want to measure your product’s success using quantitative metrics?

You need to have a solid understanding of key quantitative metrics if you want to focus on and improve essential aspects of SaaS businesses like success measurement and customer retention.

In this article, we’ll look at 10 crucial quantitative metrics and how you can optimize them for the best results.

TL;DR

• Quantitative metrics are objective numerical measurements used to measure a product or company’s performance.
• They provide numerical data, while qualitative metrics provide subjective insights.
• Quantitative metrics help SaaS companies measure key performance indicators (KPIs), improve customer satisfaction, and boost revenue.
• Combining quantitative and qualitative data can help you get a complete picture of your product’s performance.
• Key quantitative metrics that you should measure are: Trial-to-paid conversion rate, Product adoption rate, Feature usage rate, Customer acquisition cost, Retention rate, Customer health score, Churn rate, Customer lifetime value, Gross profit margin & Monthly recurring revenue.
• Userpilot can help you track and optimize quantitative and qualitative metrics by improving the onboarding experience with interactive walkthroughs, tracking in-app behavior to trigger contextual flows, sending microsurveys to collect user feedback, and accessing powerful insights in an analytics dashboard.

What are quantitative metrics?

Quantitative metrics are a set of measurements that objectively evaluate your product or company’s performance. They give you numerical data that you can look at and use to make better data-driven decisions.

Quantitative vs qualitative metrics

It is crucial to keep track of both quantitative and qualitative metrics to see how well your company is doing. But before that, what are they exactly? How do they differ? Let’s take a quick look.

• Quantitative metrics: They are objective numerical measurements from a larger sample size that you can easily track and compare to get ideas about how your products are doing. The data also lets you identify trends and patterns to track progress toward the goals of your business processes.
• Qualitative metrics: They often try to produce a more subjective performance measurement that looks at values beyond numbers. Even though they are harder to measure and are from a smaller sample size, they help you understand customer perception of your product and how effective your sales and marketing strategies are.

What is the importance of quantitative metrics in SaaS?

Quantitative metrics are important for SaaS businesses to track performance and drive retention. Let’s see how they help you improve your SaaS business.

Measure business performance and make strategic business decisions

Quantitative metrics help you quickly gain insights into crucial aspects of SaaS business, such as customer engagement and retention. With their objective numerical data, you can measure your product’s performance and make more informed decisions.

You can also benchmark and compare your quantitative results against industry standards to get a competitive advantage.

Understand the drivers of business revenue

It is critical to understand the key parameters underlying your company’s revenues. Those could be your latest marketing campaigns, newly-introduced features, or something else.

But when you have enough data of it, you can leverage them to drive more revenue to your business.

Optimize customer experience and increase satisfaction

To provide an improved customer experience and drive satisfaction, you need to know what measures help you achieve those goals. Quantitative metrics are valuable to measure the customer experience and identify what to continue and improve.

By tracking key metrics like customer satisfaction (CSAT) scores, you can find more opportunities to fulfill customer demands. Then, you can use approaches like monitoring the customer experience lifecycle, creating more personalized customer experiences, etc.

Why should you combine quantitative data with qualitative data?

Combining quantitative and qualitative data is a good strategy for business, as it utilizes both types’ strengths and covers their weaknesses.

Quantitative data gives you objective, easy-to-understand measurements in numbers, while qualitative data focuses on a business’s intangible and subjective aspects.

However, using only one can result in contextual or objective measurement gaps. Combining the metrics makes them complement each other. You can find value beyond numbers to fill in the gaps and get a complete picture of your product’s performance.

Key quantitative metrics that are essential for measuring success

Now, let’s go through some key quantitative measures for measuring your product’s or company’s success.

Quantitative product metrics

Quantitative product metrics provide valuable insights into your product’s performance. Let’s look at some of them.

Trial-to-paid conversion rate

Trial-to-paid conversion rate is the percentage of users who upgrade to a paid account after the trial period expires. This metric measures your efforts to convert trial users into paying customers.

To calculate it, divide the total number of conversions by the number of free trial users in the same period and multiply by 100.

Suppose you had 200 conversions out of 1,000 free trial users last month. Your trial-to-paid conversion rate was (200/1,000)*100, or 20%.

Product adoption rate

Product adoption rate refers to the percentage of new active users among total signups who adopt your product within a given period. It helps you understand your product’s performance by measuring how quickly customers adopt and use it.

You can calculate this product analytics metric by dividing the total number of new active users by the number of signups in the same period and multiplying by 100.

Suppose you have 500 active users now, compared to 4,000 signups this month. In this case your product adoption rate is (500/4,000)*100, or 12.5%.

Feature usage rate

Feature usage rate is the percentage of active users utilizing a specific product feature. It gives you insights into the features that bring in or retain more customers.

You can calculate it by dividing the number of feature monthly active users (MAUs) by the number of user logins in a specific period and multiplying it by 100.

For example, you have total MAUs for a feature of 2,000 and total user logins of 20,000 this month. Then your feature usage rate is (2,000/20,000)*100, or 10%.

Quantitative customer success metrics

Here are 4 quantitative customer success metrics that will help you track your customer success team’s performance to give customers consistent value while they use your SaaS.

Customer acquisition cost

Customer acquisition cost (CAC) is an estimated measurement of how much it costs to get a new customer through your sales and marketing efforts.

To calculate it, divide the total sales and marketing expenses by the number of new customers you acquired in that same period.

Let’s consider you spent $205,000 on sales and marketing in your last business process and acquired 125 new customers. Your CAC would be $1,640.

Customer retention rate

Retention rate is the percentage of customers you retain at the end of a particular period. It helps you understand customer satisfaction and improve various aspects of your products to attain greater customer success.

You can calculate this quantitative metric by dividing the number of paying customers at the end of a period by the total number of customers at the beginning and multiplying by 100.

Suppose you had 2,000 customers at the beginning of this month and have 450 paying customers now. Your retention rate is (450/2,000)*100, or 22.5%.

Customer Health Score

It refers to the possibility of a customer upgrading, continuing, or chunking your product. With it, you can determine whether the customers are healthy or at risk and predict customer relationships over time.

At first, you have to find the total action value by multiplying the action impact by the actions occurring in a specific period. Then, you can add up all of the individual total action values to get the customer’s health score.

Customer Churn Rate

Churn rate is the percentage of customers who “churn” or leave your product during a given period. This metric can help you identify the pain points and weaknesses that cause customers to leave and then improve them.

You can calculate it by dividing the number of users who churned during a period by the number of users at the beginning and multiplying by 100.

Suppose you had 10,000 customers at the beginning of January and 9,800 at the end. The churn rate is {(10,000-9,800)/10,000}*100, or 2%.

Quantitative revenue metrics

Let’s go through some key quantitative revenue metrics that will help you monitor the revenue performance and find areas for improvement.

Customer Lifetime Value

Customer lifetime value (CLV or LTV) refers to the average amount of money your business earns from an average customer until they remain a paying customer. It helps you determine how much value a customer brings and strategize plans to retain more customers accordingly.

You can calculate CLV by dividing the average revenue per account (ARPA) by the customer churn rate for a period.

Suppose your ARPA is $1,000, and your customer churn rate is 5%. Then your CLV is (1000/.05), or $20,000.

Gross profit margin

Gross profit margin is the percentage of revenue left over after you take out the cost of service required to generate that revenue. This qualitative metric shows how much revenue your company generates after operational expenses and how much you can reinvest to grow your business further.

To calculate the gross profit margin, you first need to determine the gross profit by subtracting the cost of services sold from revenue. Then, if you divide the gross profit by the revenue and multiply the ratio by 100, you will find the gross profit margin.

Suppose you have revenue of $100,000 and a cost of services sold of $60,000. Then your gross profit margin is {(100,000-60,000)/100,000)}*100, or 40%.

Monthly Recurring Revenue generated

Monthly recurring revenue (MRR) is the amount you can expect to receive from your active subscriptions every month. It is a critical metric for subscription-based SaaS businesses because it helps them accurately predict sales and craft more informed plans.

To calculate it, multiply the average revenue per account (ARPU) by the number of accounts in a month.

Suppose your business’ ARPU is $150, and the number of accounts in a month is 200. Then, the MRR would be (150 x 200), or $30,000.

How can Userpilot help you track and optimize qualitative and quantitative metrics?

Tracking and optimizing the key metrics can be overwhelming. But Userpilot can help you do this effortlessly with its wide range of features.

Userpilot, a code-free solution, helps you deliver personalized in-app experiences while tracking and optimizing key qualitative and quantitative metrics.

It has 3 paid plans: Traction, Growth, and Enterprise. The plans start at $249/month (if you pay annually) and offer a demo at first.

Let’s see how you can make the most of it.

Create onboarding flows to guide new customers and drive product adoption

An effective user onboarding process can help your customers quickly realize your product’s time-to-value, increasing product adoption.

You can use interactive walkthroughs and a wide range of UI patterns to make onboarding easy and enjoyable for your new customers.

You can also implement segmentation functionality and tailor personalized onboarding flows to different customer segments for more contextual onboarding.

Track in-app behavior and prompt engagement

To effectively track in-app behavior and feature engagement, it is important to understand what customers are doing in the app, what features they are using, and how they are using them.

Once you understand client in-app behavior, you can trigger automated engagement prompts and offer account upgrades at the right moment for the right customers.

Userpilot helps you do these by letting you track feature usage and specific user interactions, including clicks, hovers, and text inputs, to analyze customer behavior and find engagement opportunities.

Create microsurveys to collect customer feedback and measure satisfaction

You can use in-app microsurveys, such as NPS, CSAT, CES, etc., to collect customer feedback and gain valuable insights into customer journeys. The surveys should be short and straightforward to make it easy for customers to give feedback.

You can also ask your customers follow-up questions for more specific and in-depth answers. After that, you should analyze the responses and get automatic scores to find opportunities to improve your product and customer satisfaction.

Access powerful insights in the analytics dashboard

The analytics dashboard is a great place to get real-time product analytics and better understand customer behavior.

The powerful trends overview lets you filter events and feature usage by different segments, periods and companies. It can help you identify patterns and make informed decisions to improve your product.

Conclusion

To track your product’s performance, you should focus on the key quantitative metrics and try to optimize them. At this point, you should have a better understanding of how these quantitative metrics work and how you can use them to improve your product.

Want to track and optimize quantitative metrics code-free?

Get a Userpilot demo and see how you can use key quantitative metrics to increase customer retention and drive growth for your SaaS.