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6 metrics + KPIs to analyze your SaaS marketing funnel

Creating and optimizing your marketing funnel is an important element of software-as-a-service (SaaS) product growth. So, you need to consistently track SaaS funnel metrics to determine any necessary updates or changes to create a better product experience (PX).

But how do you identify the right KPIs to track for your SaaS marketing funnel, and how do you use these metrics to improve your user experience (UX)?

Last updated

7 Oct 2022

Let’s take a look at the most important SaaS funnel metrics to track and how they can help your team measure performance and build a better product for your users.

Dive deeper into your SaaS marketing funnel metrics

Hotjar’s tools help you better understand your customers at every stage of your marketing funnel to make effective product decisions. 

6 marketing funnel metrics your SaaS business needs to track for better product adoption

SaaS funnel metrics are indicators that help your business measure how well you’re performing at each stage of the marketing funnel. This can include page visits, bounce rate, and conversion rate. These quantitative metrics shine a light on areas where your product is succeeding and where improvements should be made.

However, it’s important to gather quantitative and qualitative data to get a clear overview of your user journey.

It’s crucial to track both qualitative and quantitative numbers in funnel KPIs because it gives you a fuller picture of what your business is doing. Tracking both means you have the concrete numbers of visitors, conversions, and other data, but you also have the opinions of those using your site. These opinions, or qualitative insights, can explain why you have the quantitative numbers you do.

Baruch Labunski

You don’t want to make important decisions about product changes through assumptions or best guessesSaaS funnel metrics give you the data you need to build a better product and provide the best possible customer experience (CX).

The specific metrics your organization prioritizes depend on your business and user goals, but there are some indicators that are especially important for SaaS products.

Measuring the metrics that matter at each stage helps to manage a healthy long-term sales pipeline and predict revenue growth. A SaaS provider will have clear expectations of the number of prospects at any funnel stage and target conversion rates between stages. If the metrics reveal that any of these goals are not being met, they can allocate extra marketing and sales resources accordingly.

Damian Hamp-Adams

Let’s break down some of the most important SaaS funnel metrics and how tracking them improves product adoption:

1. Website visits and email opens

Website visits and email opens are great indicators of how many potential buyers are seeing your company’s messaging and brand. After all, if users don’t know your product exists, they can’t buy it

If you’re noticing that your key web pages aren’t getting much traffic relative to the market size and search volume, ramp up your SEO efforts and even direct resources toward paid search campaigns. This is a top-of-the-funnel metric, so higher page visits and email opens give you more opportunities to nudge buyers further down the marketing funnel. You can then familiarize them with your brand and products and show them how to use them to achieve their goals, or jobs to be done (JTBD).

🔥Pro tip: use Hotjar (hi there👋) Heatmaps to track where users are clicking on your web pages to go beyond the number of page visits and really dive deeper into user engagement to understand why potential customers might be leaving your website.

#Hotjar Heatmaps show you which parts of your site attract the most user attention, and which ones go unnoticed

Hotjar Heatmaps tell you which elements users interact with most on your website, giving you more information than page visits alone.

2. Customer acquisition cost

Monitoring your customer acquisition cost (CAC) shows how much effort your business needs to invest to get a user to engage with your product and, ultimately, make a purchase or download. CAC, combined with customer lifetime value, is a great way for SaaS companies to determine if they’re operating at a sustainable rate. An increase or decrease in this metric helps you decide whether to continue a current campaign or change direction.

Tracking your customer acquisition cost gives you the opportunity to use A/B testing near the middle of the SaaS marketing funnel. For example, by trialing a new feature— like a navigation bar or popup—you can monitor its effect on your customer acquisition cost and other metrics to determine if it drives conversions. You can then follow up with these new customers through feedback tools to find out how they’re using the new feature.

#Asking for written feedback through Hotjar Surveys helps you find out how your users feel about your product and whether or not they want to see specific improvements
Asking for written feedback through Hotjar Surveys helps you find out how your users feel about your product and whether or not they want to see specific improvements

3. Conversion rate

Do you know what proportion of users who enter your marketing funnel end up interacting with your content or making a purchase? Tracking your conversion rate (middle of the SaaS marketing funnel) lets you find out. Remember that conversions don’t just include purchases, but trial and ebook downloads, or even button clicks, depending on your goals. 

Track how many users who download ebooks or start free trials end up purchasing a product. If only a few users make purchases after testing out free materials, it might mean that your product isn’t what they were expecting, indicating an issue with your product adoption plan. Conduct customer journey mapping research to optimize your marketing funnel and get users back on track to converting and successfully achieving their goals with your product.

4. Customer retention rate

Customer retention rate is an important metric for SaaS companies, which rely on subscription revenue and returning users to drive profits. A high customer retention rate indicates that users find your product helpful and believe it meets their needs, which is a clear sign that you're successfully driving product adoption.

Tracking your customer retention rate applies to all areas of the marketing funnel, so it’s essential to provide a great customer experience from the first touchpoint with users, all the way to purchase and beyond. If you’re noticing that customers drop off after a certain point or indicate that they’re dissatisfied with a specific company interaction, take concrete steps to improve that area. Here's how:

💡Pro tip: directly ask your users how you can improve to increase your customer retention rate. Use Hotjar Surveys to ask simple questions and give users an opportunity to share their thoughts. Not only will your customer retention rate go up, but your overall customer experience will improve as well.

#A simple Hotjar Survey can help you get clear insights from users

Asking simple, one-click survey questions can help you learn about areas of improvement to focus on

5. Net promoter score

Your net promoter score®(NPS) is a bottom-of-the-funnel statistic that measures how likely users are to recommend your product or company to friends and family after purchasing. A higher NPS indicates that customers are satisfied with your product and feel it meets their needs. Positive NPS results go hand in hand with higher customer retention scores, which is a good sign for any SaaS company.

NPS data is a clear indicator of customer satisfaction, and not just how likely users are to remain paying customers.

Use Hotjar to send users an NPS Survey and find out your score. A high score indicates your users are on their way to becoming product advocates and brand champions, and it shows that your organization understands and meets user goals with your product. 

6. Product and user upgrades

After users make it to the middle/bottom of your SaaS marketing funnel and complete their first purchase, do they ever come back to buy more products or upgrade their plan? For example, if you sell SaaS audio recording software for podcasts, do users buy additional features, like background noise removal, or upgrade to a more high-tech plan? 

Upselling and cross-selling aren’t just key growth and revenue opportunities. They also help you improve your customer's experience and increase the likelihood they'll fully adopt your products. After all, the more add-ons and features available to users, the more they can accomplish.

For effective upselling and cross-selling, define your user personas and their pain points, and ask customers for regular feedback on the features and upgrades they’re interested in. This type of data-backed, user-led development is what makes businesses thrive.

The importance of SaaS businesses tracking qualitative and quantitative funnel KPIs

Gathering both qualitative and quantitative insights is essential to get a well-rounded picture of your customers’ needs. Quantitative metrics help you understand how each stage of your funnel is performing, but asking customers for feedback—and giving them room to elaborate—helps you identify ways to improve your marketing funnel.

Tracking the metrics we covered in this article is a great start, but industry benchmarks can only get you so far. It’s important to take a close look at your organization’s data and determine your own metrics through past performance and current and future goals. 

Keep your SaaS customer journey in mind and emphasize data gathering that helps you understand your customers to provide them with the best possible product experience.

Ready to dive deeper into your SaaS marketing funnel metrics?

Hotjar’s tools help you better understand your customers at every stage of your marketing funnel to make effective product decisions.

FAQs about SaaS funnel metrics