Customer Success Metrics That Matter: A Comprehensive Guide to Measuring Success in SaaS

Retention and churn are the most monitored metrics, but the real drivers for success are customer experiences and customer satisfaction. If you're not measuring the relevant KPIs to your business, you might invest time and effort in things that don't bring value to your customers, missing chances to grow through renewals or upsells.

Over time, this gap can chip away at customer satisfaction, trust, and loyalty. So, what's the solution to this? The key is to measure what drives success so you stay in tune with your customers, deliver value, and grow together.

In this article, we are going to talk about 15 customer success KPIs and metrics that actually matter. 

Why Tracking Customer Success Metrics is Essential

Tracking customer success KPIs is important for most Saas companies for a number of reasons. 

Retention and Growth: More importantly, metrics help identify churn risks and highlight opportunities for expansion. 

Alignment Across Teams: Focusing on measurable KPIs ensures that teams in sales marketing and customer success can all work toward the same goals. 

Predicting Revenue: Using metrics such as NRR and CLV can paint a pretty clear picture of the recurring revenue potential.

In fact, as per Harvard Business Review, increasing customer retention rates by just 5% increases profits by 25% to 95%. 

Must-track CSM metrics for any SaaS company

Here are some of the best CSM metrics for any SaaS company to improve customer retention: 

1. Net Retention Rate (NRR):

It’s a measure of how much income a firm derived from customers in the same segment. Further, it also encompasses upselling and additions, customer losses through downgrades or cancellations. A high NRR simply indicates that the customers are utilising more of your products and services. NRR is determined by dividing the total of end users’ revenue at a given period by the initial revenue of those users in the same period, including additions because of sales and other upgrades but subtracting churn.

2. Gross Retention Rate (GRR):

Measures the recurrence revenue by eliminating the growth in the customer base. As a matter of fact, GPR provides a raw look at churn without other influences from subscriptions.  Use the formula FRR= ((revenues earned from existing clients for the present period)/ total revenues at initial period of any additional new revenue sources).

3. Customer Lifetime Value (CLV)

Determines on average, how much a customer will spend along with their life cycle. CLV can be estimated by taking the average purchase value multiplied by the purchase frequency, and the customer lifespan. 

4. Churn Rate

The churn rate measures the percentage of customers lost in a given period of time. It can be calculated by dividing the number of customers lost in a certain time by the initial number of customers. For a SaaS company, the ideal churn rate can be around 8-10%. 

5. Time to First Value (TTFV)

It’s one of the most important Customer Success Metrics SaaS. It depicts the time it took your customers to get initial benefits from your product or service. It’s measured by taking the time from onboarding a new client to the time by when they first derive some value. 

6. Onboarding Completion Rate

OCR is another SaaS Customer Success Metrics that measures the number of customers who complete onboarding for a company. This data is important for SaaS companies to get insights into growth and user experience. 

7. Product Adoption Rate

As the name suggests, this refers to the number of customers who actively use key product features. For example, if a certain percentage, let’s say 22% of customers update their dashboard for their tasks, it means that companies have to improve that specific feature. 

8. Customer Health Score

This is yet another KPI to monitor for a SaaS company. This is because companies can directly track how satisfied their customers are with their products and services. It combines elements such as user engagement and usage data like login frequency, feature usage and overall time spent. 

9. Net Promoter Score (NPS)

NPS is used to get insights into customer loyalty for a company. It even gives you insights about how likely your clients can recommend your product or service in their network. As per Bain & Company), Companies with high NPS grow revenue 2.5 times faster. You can calculate this score by subtracting the percentage of detractors from promoters.

10. Customer Satisfaction Score (CSAT)

Similar to health score, CSAT deals with customer satisfaction. It includes customer surveys that provide data about their current level of satisfaction, product/feature feedback, onboarding experience etc. This can be easily calculated by dividing the positive response by total number of responses. 

11. Expansion Revenue

Your SaaS customer success team needs to track these KPIs as they can help you get an idea about the revenue generated by upsells and cross-sells. This is calculated by dividing the revenue by expansion and total revenue at the start of a given period. 

12. Support Ticket Metrics

This is one of the key SaaS Customer Success Metrics that helps companies understand their pain points and expectations from the customer support team. This includes aspects such as ticket volume, ticket creation time and even the time it took to resolve the ticket. To get right figures about this, divide total resolution hours by the number of tickets resolved.

13. Customer Engagement Score

In our interaction with clients, we often notice that many report CES to be a bit tricky. It’s because context-depending scoring and combining different metrics can be a bit challenging. However, it’s pretty important for SaaS companies to plan their next move. To assess the frequency of quality interactions with clients, we assign weight to each aspect and then create a score. 

14. Renewal Rate

SaaS renewals are important for brand reputation and revenues. If the percentage of your SaaS renewals is increasing, this means that more clients have trust in your service. You can get the score by dividing the number of renewals by the total number of contracts up for renewal.

15. Customer Value Score (CVS)

It’s one of the Customer Success Metrics and KPIs that measure whether customers achieve their business objectives and see value in your product. This can be tracked by correlating customer feedback, feature usage, and progress toward stated goals.

The Customer Value Score (CVS): Emerging as a Leading KPI in the CSM Space

While traditional metrics like health scores focus on engagement and activity, the Customer Value Score (CVS) takes a more meaningful approach by measuring whether customers achieve their business objectives.

CVS combines:

• Business Goal Alignment: Is your product helping customers meet their stated objectives?
• High-Value Product Adoption: Are customers using the features that matter most to their goals?
• Expansion Readiness: Are customers signaling opportunities for growth (e.g., upsells or renewals)?

This Customer Success KPI aligns success with value realization, making it a predictive indicator of retention and growth. As per experts, 84% of B2B buyers are more likely to trust and stick with a company that understands their business goals.

How to Measure Customer Success Metrics Effectively

To get the most out of your metrics, follow these steps:

1. Set Clear Objectives: Define what success looks like for your customers and align your metrics accordingly.
2. Centralize Data: Use platforms like Salesforce to integrate customer interactions, product data, and feedback into one system.
3. Automate Tracking: Leverage tools to reduce manual reporting and provide real-time insights.
4. Analyze Trends: Use dashboards to spot patterns and address risks before they escalate.
5. Iterate Metrics: Continuously refine your metrics to reflect evolving customer needs and business priorities.

Best Practices for Using Customer Success Metrics in SaaS

Effective tracking of customer success metrics is important, without proper analysis of the above-mentioned metrics, businesses may lack insights into customer engagement. This can further lead to an increased churn rate. Our experts recommend a few tips to get the best results: 

• Prioritize metrics that measure customer outcomes such as CSAT, NPS, and CLV rather than activity-based outcomes like login frequency and feature usage. It’s because these outcomes can provide information about how well the product meets customer demands. 
• Always build tailored views for CSMs, executives and sales teams to enhance cross-functional collaboration. For instance, the account teams can interact or give feedback to CSMs about concerns that may not have been noticed otherwise. 
• Use AI to anticipate risks and growth opportunities based on data trends. You can use predictive analysis and automated compliance management too. It can help you optimize costs and their SaaS portfolio. 

Final Words

Tracking the right customer success metrics is essential for any SaaS business aiming to retain customers, drive growth, and deliver measurable value. While traditional customer success KPIs like NRR and churn rate remain important, it’s equally important to adopt advanced metrics like the Customer Value Score. These ensure your success strategies are truly aligned with customer outcomes.

Start by evaluating your current metrics. Are they helping your customers achieve their goals? If not, it’s time to shift the focus to delivering measurable value—because when your customers win, so does your business.