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6 SaaS Funnel Metrics + KPIs To Analyze Your Marketing Funnel

Creating and optimizing your marketing funnel is an important element of SaaS product growth. Your team should track your SaaS funnel metrics consistently to determine any product updates that need to be made.

But how do you determine which KPIs are most important for your unique marketing funnel and what’s the best way to measure them—and use them to improve your customers’ experience?

Last updated

30 Aug 2022

Let’s take a look at some commonly used SaaS funnel metrics and how they can help your team measure performance and build a better product for your users.

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. 

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

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

But it’s important to gather both 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 guesses. Ultimately, it’s important to track SaaS funnel metrics because they provide the data to help you build a better product and provide the best possible customer experience.

The specific metrics that your organization prioritizes will depend on your 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 can improve your 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 seeing much traffic relative to the market size and search volume, consider ramping up your SEO efforts and even directing resources toward paid search campaigns. This is a top-of-the-funnel metric, so higher page visits and email opens mean that you have 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.

Pro tip: you can use 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 and why potential customers might be leaving your website.

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

Hotjar Heatmaps can tell you what 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 organization 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 can help 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 your users for written feedback through surveys helps you find out how they’re using your product and whether or not they want to see specific improvements
Asking your users for written feedback through surveys helps you find out how they’re using 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) can help 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 that 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 the product isn’t what they were expecting, indicating an issue with your product adoption plan. By conducting customer journey mapping research to help optimize your marketing funnel, you can get users back on track to converting and finding success with your product.

4. Customer retention rate

Customer retention rate is an especially 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 your product adoption is working.

Tracking your customer retention rate can apply to all areas of the marketing funnel. 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, your team can take steps to improve that area.

Pro tip: increase your customer retention rate by directly asking your users how you can improve. Use survey tools 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 the chance that users will 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.

It’s important to collect NPS data in addition to customer retention scores because it’s a clear indicator of customer satisfaction, not just how likely users are to remain paying customers. Building a brand is important for the longevity of your company, so having a customer-centric marketing funnel that pays close attention to users’ pain points is essential.

A high NPS score indicates your users are on their way to becoming product advocates and brand champions, and it shows that your organization understands and meets their goals with your product. 

6. Product/user upgrades

After users have initially made it to the middle/bottom of your SaaS marketing funnel and made their first purchase, do they ever come back to buy more products or to upgrade their purchase to the next level? 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 opportunities aren’t just a key part of your growth and revenue opportunities. They’re an important element of improving your customer experience and giving them the best chance at successful product adoption. After all, the more add-ons and features available to them, the more they can accomplish.

For effective upselling and cross-selling, make sure you know 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 tracking both qualitative and quantitative funnel KPIs

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

Tracking the metrics we covered in this post 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/future goals. 

By keeping your SaaS customer journey in mind, and emphasizing data gathering that helps you understand your customers, you’ll be able 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.

Frequently asked questions about SaaS funnel metrics