Building a Product Qualified Lead process for your Simple Product

This is part 2 of a 4-part series on PQLs: What they are, how to find them and how to build a winning Product Qualified Lead process

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activation slack alerts for Product Qualified Lead process

In case you haven’t heard, PQLs are leads that are more likely to convert because they have found value in your product. If you’re a modern SaaS business, you want to find these leads. So the only question left — how? It’s elementary: you need a Product Qualified Lead process.

So you’re convinced: you want to find PQLs and make a Product Qualified Lead process for your business. But where to start?

To build a proper Product Qualified Lead process, you will need to:

  1. Properly define what the criteria by which your leads will become product qualified (otherwise known as an Activation checklist)
  2. Have a set of guidelines for turning these leads into paying customers.

Let’s get started!

defining a pql is important for a winning Product Qualified Lead process

First off, how complex is your product?

When our customers ask how they should be designing their Product Qualified Lead process, the first question we ask them is: 

How complex is your product? 

More simply, how hard is it for a new user (or small group of users) to self-serve their way to first value? Don’t forget: self-serve means without any manual support of intervention from your team. 

The answer to this question is the starting point for your PQL definition. It’s answer tells you how Activated a new account should be before your team gets involved. 

This post covers a Product Qualified Lead process for simple products. Not sure if that’s you?

Ask yourself how many of your last 10 signups self-served their way to first value. If the answer is more than 7, read on!

Slack and Dropbox are great examples of simple products. With both, a single user (or small number of users on an account) can easily self-serve their way to initial value. Both also have freemium versions, which are more commonly seen with simpler products.

Looking for a different product type? Download our e-book.

Next, how big is the opportunity?

Even with a simple product, there is some variance in how quickly you’ll want to get your Sales team involved. You need to also consider the size of a Sales opportunity. If a new trial holds the potential for more revenue, you’ll want to get your Sales team involved earlier. 

At the very least, you should be able to categorize your new trial signups into Small, Mid-Size and Large revenue opportunities. 

Oftentimes, companies will use the company size of a new trial as a proxy for opportunity size. This is certainly one way to go about it, but you define opportunity size based on whatever criteria makes sense for your business. 

Putting it together with Activation Rate

The more complex a product, the earlier your Sales team should intervene. Similarly, the bigger the size of the opportunity, the sooner you want your Sales team on it. Sounds simple, right? (That’s good, because it is). 

If you have a simple product, you should generally wait for accounts to become (almost) fully Activated before getting manually involved. However, if a large deal starts using the product, you can might want to start the manual intervention phase earlier to increase the chances of a close. In this case, you’d have your Sales (or CS team) start engaging when the account is only 25-50% Activated. 

Here are good rule-of-thumb Activation rate guidelines for a simple product:

Deal SizeReach out when:
Small 80% – 100% Activated
Mid-Size60% – 80% Activated
Large25% – 50% Activated

As you go through the next section, keep in mind the goal of a Product Qualified Lead process for simple products is to drive as many paid conversions as possible with little to no manual intervention.

Product Qualified Lead process for the Small Opportunity

Product Qualified Lead process for the small opportunity simple product
Product Qualified Lead process for small opportunities — Wait until they’re ready to convert

Simple products are designed so that the majority of accounts coming in are small accounts that can self-serve their way to value (and, most likely, even to a point of paid conversion). With a simple product, you can choose to not offer any manual intervention or you can choose to intervene when they approach the point of conversion.

While it’s easy to write off small accounts (you may not even have a dedicated salesperson for them), realize that there is gold in them there hills! Your Sales (and CS) teams should be monitoring this segment on a regular basis and looking for opportunities to take some of these accounts over the finish line. 

Any small account that gets to 75% Activation is absolutely worth some light manual intervention. 

How to engage these Product Qualified Leads

They don’t really need a value pitch but a slight nudge or reminder could be just the thing that gets them over the finish line. 

Want to know how to win over small deals? Download our e-book and get considerations and sample emails.

Product Qualified Lead process for the Mid-Size Opportunity 

Product Qualified Lead process for the mid-size opportunity simple product
Product Qualified Lead process for mid-size opportunities — more users, lower Activation

You have a simple product and a mid-size opportunity. Great! The goal is still to have users self-serve their way to success — at least as much as you can. 

With that being said, mid-size accounts are more likely to have multiple users (and multiple decision makers) so it’s likely that some manual intervention will be required. More users, more touch points, and more potential decision makers complicate the on-boarding, Activation, and conversion of these accounts. 

You should consider these account product qualified and get someone on your team involved at about 60% – 80% Activation.


Looking to win that mid-size deal? Download our e-book and get everything you need.

Product Qualified Lead process for the Large Opportunity

Product Qualified Lead process for the large opportunity simple product
Product Qualified Lead process for the large opportunities — It’s ok to jump in a bit earlier

The whales! Go get ‘em! 

But be careful. It’s typical for Sales teams to see a big, shiny logo and then drop everything to chase it down. Don’t do this! The user that signed up for your product is probably a lower-level employee who was doing some initial investigation. (This is why we call these types of trials “Heartbreakers”) 

Don’t let your Product Qualified Lead process falter chasing a heartbreaker

Have some restraint and let these trials self-serve their way forward before reaching out. Your Sales team should allow this ac- count to show sufficient interest before chasing them down. Of course, the size of the potential opportunity means you should product qualify this lead at an earlier stage of Activation (about 25-50%). 

Ready to take that large opportunity from trial to forever? Download our e-book.

The Seven SaaS Trial Leads You Need to Know for SaaS Revenue Forecasting

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If you’re a modern SaaS business (you are, aren’t you?), you probably have some sort of revenue forecasting system. And to get any value from that system, you need to know how likely your SaaS trial leads are to convert.

That means plugging values into a spreadsheet with a formula, typically

deal size x likelihood to close

Of the two, deal size is relatively easy to determine. But how do you determine likelihood to close? If you’re like the average modern SaaS business, you might have a conversation with the Account Rep in charge of the account. Surely they’ll know. 

“How are we feeling about Footprint Inc?” you ask the Account Rep. “How likely are they to close?”
Oh, they’ll close. We’ll get them for sure. I can feel it.
“Great! I’ll just put them in the spreadsheet —”
94% — they’re going to close.
“Because they’ve been especially engaged with our key features during their trial?”
No, how would I know that? I can just feel it.
“You can…feel it?”
Yes, I can just feel it. They’re going to close.
“Ok. Is it because they’ve gone through all the Activation steps?”
I told you! I can feel it.
“Ok, Jim if you’re going to give a percent you need a reason.”
No, I don’t.
“Ok, very well. I’ll just ask Product for the account engagement and put them in the spreadsheet based on —”
“638 what?”
They’ll close.
“Jim, that’s not even a percent!”

This is clearly not a sustainable way to determine how likely it is that a trial will convert. Want a better way to forecast revenue? Product Engagement metrics give you singular insights for your revenue forecasting so you don’t have to rely on Jim’s “feelings” anymore. (Sorry, Jim, but who were you kidding? 638?)

The key product engagement metrics to consider for your SaaS revenue forecasting are:

Activation (Rate):

n. A static measurement of how far along a user or account is in their journey toward “first value” or the “aha” moment where they realize how great your product is. 

n. An indicator of how far along someone is to becoming a product qualified lead

Engagement (Score):

n. An over time measurement of how much a user or account is using your product


n. A measure of responsiveness and proactive outreach that a user or account displays during a free trial period

Most SaaS trials fall into one of seven types, based on their Activation, engagement and communication during their trial period. Have you met all seven? 

Ready to find trials that will convert? Give Sherlock a try.

Types of SaaS Trial Leads

SaaS Trial Lead #1: The Golden Leads

90% Chance of Conversion

If only SaaS revenue forecasting was all Golden Leads

SaaS Trial Leads golden lead description
Don’t we all wish every lead was a Golden Lead?

These people are almost guaranteed to convert. From the beginning, they do everything right. They get set up in the product quickly and stay highly engaged throughout the trial, often bringing in more team members. They’re also extremely open and communicative with your team, clearly describing their goals, taking advice, and asking questions whenever they get stuck. You can’t do better than a Golden SaaS trial lead.

Key engagement indicators:

  • High Activation
  • High Engagement
  • Actively Communicate

How to handle these SaaS trial leads:

Just enjoy the ride with these leads. They’re really committed to making your product work for their use case so do everything you can to help them make it happen. And don’t be afraid to show them important but less obvious features — they’ll be on board to try them! 

SaaS Trial Lead #2: The Silent Successes

75% Chance of Conversion

Don’t be discouraged by silence when SaaS revenue forecasting

SaaS Trial Leads Silent Successes
Just because these SaaS Trial Leads are quiet, doesn’t mean they don’t care

These SaaS trial leads sign up and self-serve their way to value. They don’t respond to any emails or communication attempts from your team, but they maintain high Activation and engagement rates throughout the trial. As much as may seem disinterested, their engagement tells a different story.

Key engagement indicators:

  • High Activation
  • High Engagement
  • Low/No Communication

How to handle these SaaS trial leads:

Firstly, don’t give up hope. Just because they’re not communicating, doesn’t mean they’re not interested. It’s easy to rank the likelihood to close lower for these leads because they don’t talk much, but stay focused on their Activation and engagement and be available if and when they do need help. Then wait and watch them lead themselves to glory. 

SaaS Trial Lead #3: The Contrary Converters

60% Chance of Conversion

Feedback (even if negative) is good for your SaaS revenue forecasting

SaaS Trial Leads Contrary converter
These SaaS Trial Leads complain a lot, but they’re still engaged

These people communicate constantly and consistently throughout their trial — but most of what they have to say is negative. They challenge your features, complain about your on-boarding experience, question how you wrote your help docs, etc. They just don’t seem happy with what you’re doing. Despite all of those complaints, though, these SaaS trial leads keep engaging and implementing. 

Key engagement indicators:

  • Medium Activation
  • Medium Engagement
  • Actively Communicate

How to handle these SaaS trial leads:

Support these SaaS trial leads happily through their grumpiness. When they frown, you smile. Listen to them and make them feel heard. If they find value in the product, they will convert. And they might even become one of your biggest advocates!

SaaS Trial Lead #4: The Positive Procrastinators

30% Chance of Conversion

Actions speak louder than words when it comes to SaaS revenue forecasting

SaaS Trial Leads Positive procrastinator
Don’t get caught up trying to give these SaaS Trial Leads everything they want

These SaaS trial leads may seem like some of the most promising. They say all the right things and seem excited in a too-good-to-be-true sort of way. These trials always have some excuse for why they can’t make progress on their trial. They never get set up with your product, and their sweet nothings may feel nice but are meaningless in the end.

Key engagement indicators:

  • Low Activation
  • Low Engagement
  • Actively Communicate

How to handle these SaaS trial leads:

The biggest thing to remember with these SaaS trial leads is that talk is cheap. Be firm with them. Make them commit to an action plan. Make them commit to becoming Activated with your product. If they can’t or they won’t follow through, don’t waste your time. 

SaaS Trial Lead #5: The Fizzlers

10% Chance of Conversion

When SaaS revenue forecasting, keep in mind: early excitement doesn’t always lead to lasting results

SaaS Trial Leads fizzler
These SaaS Trial Leads start hot and then burn out

These leads are the most disappointing of all in many ways. They start out so excited (much like the Golden Lead), becoming Activated quickly and constantly remarking how all of your features feel made for them. But then something changes — their engagement tails off, and they’re gone.

Key engagement indicators:

  • High Activation
  • Low Engagement
  • Low/No Communication

How to handle these SaaS trial leads:

Keep these SaaS trial leads on your marketing lists. (As far as SaaS revenue forecasting, they’re not going to close during their trial). They were clearly excited about something you had to offer, but it may have been a matter of bad timing. No one knows what the future holds!

SaaS Trial Lead #6: The Incompatible Ignoramus

5% Chance of Conversion

Bad leads are bad leads — no need to categorize them otherwise when SaaS revenue forecasting

SaaS Trial Leads incompatible ignoramusSaaS Trial Leads incompatible ignoramus
Is it even fair to call these SaaS trial leads?

These SaaS trial leads are just bad. There’s nothing else to it. They don’t have the resources or motivation to get your product implemented, but they interact with your team, taking up valuable time. They insist they want to make things work, but who are we kidding? 

Key engagement indicators:

  • Low Activation
  • Low Engagement
  • Actively Communicate

How to handle these SaaS trial leads:

Smile and move on. Be grateful for the initial interest and efforts of these leads, but don’t waste time. They may, at some point in the future, have the resources or feature needs. They may come back. But in the meantime, you don’t need them signing up and spreading bad vibes about your product in the marketplace.

SaaS Trial Lead #7: The Heartbreakers

5% Chance of Conversion

Sometimes SaaS revenue forecasting requires that you let go of a hollow dream

SaaS Trial Leads heartbreaker
Don’t let these SaaS Trial Leads turn into a morale black hole

Like their namesake, these leads are everything you want but can’t have. They’re well-known logos that would make your brand shine. Just saying their name gives you goosebumps. But the problem is they never actually use the product after signing up and are generally unresponsive to Sales outreach.

Key engagement indicators:

  • Low Activation
  • Low Engagement
  • Low/No Communication

How to handle these SaaS trial leads:

Just. Let. Go. Be happy that such a great SaaS trial lead showed enough interest to sign up but don’t dwell on them. Likely, the wrong person started the trial and they just aren’t engaging with your features. It might be worth it for your Sales team to spend some time mapping this account and trying to find the right buyer, but not too much time.

SaaS revenue forecasting is all about product engagement

Chances are, by this point, you’ve realized that SaaS revenue forecasting is all about looking at engagement. Is the SaaS trial lead engaged during the trial period? If so, they’re more likely to convert. If not? There are more fish in the sea.

Need a tool to separate the Heartbreakers from the Golden Leads? Try Sherlock free for 17 days.

What do you think? Did we miss any SaaS trial lead personas? Send us an email at and let us know.

Activation vs. Engagement: What’s the difference?

If you spent a day at Sherlock, you’d hear us throwing these terms around as often as “coffee” and “SaaS” (very well, perhaps less than “coffee”). But what does Activation mean? What does Engagement mean? How are they related? What’s the difference?

Quite excellent questions!

Here’s our CEO, Derek Skaletsky, on the topic.


Let’s begin with Activation (Rate)

n. A static measurement of how far along a user or account is in their journey toward “first value” or the “aha” moment where they realize how great your product is.
n. An indicator of how far along someone is to becoming a product qualified lead

There are a few things a user would need to do to get set up in your product and get value out of it. These things vary based on the product. Let’s say you’re a modern SaaS company with a GSuite plugin for email collaboration. Your Activation steps might look like this:

The account journey from signup to Activation
The account journey from signup to Activation

Here’s an obvious fact that follows: Activation rate is just the percentage of steps completed. That means if an account or user has done 2 out of the 5 steps above, they are 20% Activated. 

They are 20% of the way to hitting first value with your product. Excellent!

Sherlock screenshot showing Activation rate
Account Activation is on the left in Sherlock

In Sherlock, you can see an account or user’s Activation rate in a few places. The full Activation checklist is on the left side of any account or user detail page, and the Activation rate is visible on any user or account overview (because it’s such an important metric!) Additionally, you can see Activation rates in other platforms you’ve integrated with Sherlock — Intercom, Slack, and Hubspot being among them.

Use Activation rate in Slack, Intercom, Hubspot
Sherlock integrates with Slack, Intercom and Hubspot

Setting up Activation in Sherlock is simplicity itself. Get started and never miss another Activated trial again

When to use Activation (Rate)

Activation Rate in the Customer Journey
The Customer Journey

Activation rate is quite important in the early phases of the user journey, especially if you have a freemium version or free trial. In that case Activation, occasionally combined with firmographic criteria, is the best indicator of when a trial account is ready for an interaction with your sales team. (It becomes even more important when you have a large number of trials and your Sales team needs ones to focus on.)

But that doesn’t mean that Activation is no longer important after the free trial is up. Post-sale, Activation gives your Customer Success team a way to measure how far along the account is in the on-boarding process and what steps each user needs to complete to be fully on-boarded onto the product.

Separate you paid and trial accounts so your different teams can use different Activation criteria

User vs. Account Activation

It’s been said (and will be said again): If you are a SaaS business, you operate at an account-level. 

  • Accounts sign-up
  • Accounts adopt
  • Accounts convert 
  • Accounts pay
  • Accounts expand
  • Accounts cancel

Curious, it seems there’s a trend here.

Sales teams have always known this. Just look at how any CRM is organized. Marketers know this. That’s why ABM has taken off in recent years. SaaS businesses sell to other businesses — your product is used by teams. You operate at the account-level. 

Why wouldn’t you track Activation the same way? You would track it the same way. But accounts are made of users.

Track activation at both the account and user levels
Sometimes users have different Activation criteria than accounts

There are some Activation criteria that the account needs to do. For example, adding a certain number of team members to the account. On the other hand, there are some Activation criteria that a single user needs to do to become Activated. Think actions like setting up a profile or creating an individualized template. To truly understand how far along an account is on the path to Activation, you need to understand both the account Activation and the Activation rate of the individual users on the account. 

Track both account and user activation with Sherlock

Now, Engagement Score

n. An over time measurement of how much a user or account is using your product

This is all about the events (or actions) a user or account can take in your product. As you are well aware (surely), there are several things that one might do in any given SaaS product. Some of these things are more important than others. Login, for example, is not that important. Sure, everyone does it, but how much value does someone get from logging in? 

An obvious fact, that — not a lot.

Creating a report, however, is more valuable. A user would certainly derive more value from creating a report than logging in. (This is, of course, assuming you have the sort of SaaS app where creating a report is part of the value.) There are events that are likely even more valuable than creating a report and similarly events that are less valuable than creating a report.

engagement scoring model pql
Some events are more important in your product than others, so why would you weight them all the same?

So to get a good sense of how engaged a user is with your product, you need to collect all the (at least somewhat) important events that one might do in your product and weight them accordingly. Then, you need to do some math to find the engagement score for both users and accounts.

Don’t want to do the math yourself? Weight your events in Sherlock and let us calculate your engagement

When to use Engagement Score

Yet another obvious fact — all the time! In all seriousness, there are several things an engagement score can tell you. 

  • It surfaces accounts that are at risk and ones that are ready for an up-sell. 
  • It shows you which users on an account are going to be internal champions for your brand. 
  • It gives you an indication of which accounts might be good to reach out to when it comes time to build out your social proof

But most importantly, and partly because it is over time, the engagement score offers singular insights into the overall health of your business. If it’s on a downward trend, it could indicate you need to make some changes. A graph with a positive slope means you’re doing something right!

engagement going up/down over time
Engagement is a good indicator of how your product is doing

At-a-Glance: Activation vs. Engagement

Activation RateEngagement Score
Static metric to determine how far a user/account has progressedOver time metric for assessing how much a user or account is using your product
Use it at the beginning of the customer journey – both pre and post-saleImportant to track across the entire customer lifecycle
Trends are essential for identifying risks and opportunities

Ready to start scoring? Give Sherlock a try.

4 Product Engagement Metrics for a Winning Customer Success Operation

SaaS customers won’t be successful with a SaaS product if they don’t use it. Sure, some might continue to pay for it (seriously, my dad’s still paying for AOL), but that’s not the same as success. And you want people to be successful with your SaaS product (retention revenue, anyone?) 

Enter your customer success team — their job is to maximize engagement with the product. Account not engaging? Fix it. Account engaging? Excellent, increase engagement even more.

But CS teams can’t work blindly (or they shouldn’t if you want them to be successful). So how do you remove the blindfold? It’s elementary, my friend: Product engagement — the system upon which all other customer success metrics are built. Metrics based on product engagement give your team a glimpse into the health of the business. And they’re actionable (CS teams need to take action). 

Here are the key customer success metrics you should be tracking: 

  • Active Users/Accounts
  • Product Engagement
  • Product Adoption Rate
  • Activation Rate (for new accounts)

The “What” of Customer Success Metrics

Customer Success Metric #1: Active Users and Accounts 

active user (n.) = someone who has used the product in a given time frame (even if only a little!)

active account (n.) = an account that has had at least one user use the product in a given time frame (even if only a little!)

This one’s simplicity itself. You choose what counts as activity. Login, perhaps? Or, even better, actions around other key features (sometimes“login” isn’t the best indicator of engagement).

Then choose how often to measure (this will depend on your product). Used daily (think Facebook)? Measure DAUs. Used monthly? Measure MAUs. Most SaaS products are business apps with weekly usage patterns so a WAU customer success metric works best. 

Here’s a pro tip: SaaS businesses are account-based businesses and your customer success team operates at an account-level. If you can’t measure your key product engagement metrics at the account level, then they’re not helpful. Action item: Make sure you can determine“active” for users as well as for accounts.

Generally speaking, “active” is a pretty shallow metric. To get a better understanding of how well your customers are engaging, you need to look deeper.

Customer Success Metric #2: Product Engagement Score

product engagement (n.) = a measure of how engaged your users or accounts are in a given time frame

This is this singular customer success metric for any SaaS business. You already know “active” doesn’t mean “engaged” (neither does “last login”). Product engagement is more than that. Just ask Lincoln Murphy:

Logins Don’t Matter

While you generally need to sign-in to an app to get value, that action alone is probably not the thing that delivers value to your customer.

Simply being “active” in the product doesn’t mean you’re being “successful” either.

In fact, a lot of logins and random in-app activity could be a sign that your customer can’t figure out what to do…but they sure would like to.

It’s a signal that something’s amiss…but a lot of companies might wrongly classify that customer as “active” and therefore“onboard” and“successful.”

“Active” – logins, random in-app activity, etc. – without context could be that the user wants to do something but can’t figure it out, so “active” in that case is actually a churn threat. Crazy.

Lincoln Murphy, “Active Users Are a Vanity Metric

Crazy, indeed. You need to score actual product engagement. It’s a model that scores each of your users based on (a) the number of times they do certain things in your product; and (b) the importance of those activities. 

Here’s what a table to score user engagement might look like:

Product EventImportance
(between 1-10)
Number of Times
Event Score
Event 1250100
Event 291199
Event 3525125
Event 417575
Total Raw Score399

By doing this you will give every user his/her own engagement score (you should then normalize the scores between 1-100 so they are easier to understand and use) for your engagement period (daily, weekly, monthly — up to you). 

Don’t want to build your own scoring solution? See how you can use Sherlock to do it for you.

Any system you build (or use) for measuring engagement should help you measure engagement at the user, account, and product level. And it should track this engagement over time. If you want to get value out of it, anyway. You do want to get value, don’t you?

Customer Success Metric #3: Product Adoption Rate

user adoption rate (n.) = the percentage of your key features a user has used in a given timeframe

account adoption rate (n.) = the percentage of your key features any user from an account has used in a given timeframe

Measuring Adoption is similar to measuring engagement, but Adoption determines “what percentage of your key features” your customers are using. While users can show strong engagement by only using a small set of features, Adoption rate measures the number of unique features being used. This basically measures “depth of engagement.” 

For example, if you have ten important features and one of your accounts has used two of them in the past month, that account would have a 30-day Adoption rate of 20%. But another account whose users used eight of those features would have a 30-day Adoption rate of 80%.

Low Adoption rates mean that users are using the product in a concentrated way, while high Adoption rates mean that users are using the product more broadly.

Customer Success Metric #4: Activation Rate

activation rate (n.) = How far along a user/account is on the path of becoming Activated, i.e. fully on-boarded and/or to first-value

Knowing how close (or far away) your accounts are to the point of Activation is an essential customer success metric for any team working to onboard new users. 

An Activation rate is just that. It’s a measure of what percentage of your “Activation” criteria an account has met — how many steps have they taken as a percentage of the total number of steps they need to take. (This is especially important in trial accounts.)

For example, if you offer a project management application, new (trial) accounts might be Activated after they: 

  • Create an account
  • Invite 2+ team members
  • Create a project
  • Upload 2+ files
  • Create 3+ calendar events
  • Create 1+ tasks
  • Complete 1+ tasks

For this product, accounts that do all of these things would be considered Activated during their trial. The Activation rate would be expressed as a percentage based on how many of these steps a new account has taken. 

The “How” of Customer Success Metrics (How to Use Them, That Is)

You’ve got the what, now let’s figure out the how to (assess and derive action from) of our core customer success metrics. To do that, we need to get them actionable at both a management and a tactical level (as with any other operational metric).

Management-level metrics tell you about the health of some part of your business. A management-level customer success metric tells you about the health of your paid user base (or specific segments of it).  

Tactical-level metrics are action metrics. They tell your team that something needs to happen (or not happen). A tactical-level customer success metric is all about helping your customer success managers identify issues and opportunities so they can take action. Baker Street Insight: These metrics really need to be measured at both an account and user level. 

Excellent! Let’s see how to use the key customer success metrics we defined above.

Customer Success Metric #1: Active Users and Accounts

This one’s inherently more tactical. And why? It doesn’t do much to tell you about the health of your business other than painting a picture of (a) the general scope of your user base and (b) it’s growth (or decline). 

Knowing if you have 200 active accounts (or if the number of active accounts is different from last month) can help you plan resources at a management level. And if you don’t have a product engagement scoring solution, you could use growth in active users/accounts as a proxy for the health of your product. But you really shouldn’t (see above).

For tactics, on the other hand, knowing how many active users there are on a specific account is very helpful for a CSM managing an account. Most SaaS businesses can only be successful for their customers if the product is used by multiple users on multiple teams. So when managing SaaS accounts, knowing the number (or percentage of active users) can help a CSM identify problem or thriving accounts and prioritize their work. 

Customer Success Metric #2: Product Engagement Score

This is a power metric at both levels. 

As a management metric, tracking the engagement level of paid accounts over time tells you the overall health of your userbase. Are our paid users becoming more or less engaged with our product? This is a basic question that all Customer Success teams should be able to answer. 

It also is a customer success metric perfect for assessing the health of different segments of your customer base. For example, looking at the engagement of accounts at different pricing plans or in different industries can help you hone your ideal customer profile (product-market fit, anyone?). Interesting use case: Looking at the engagement of accounts by individual CSM is one way to assess CSM performance. 

As a tactical customer success metric, looking at product engagement score at the account level can uncover:

  • Highly engaged accounts that can serve as your best advocates
  • Accounts that are at risk of churning
  • Accounts with engagement growth that may be ripe for potential expansion
  • Accounts that may have had some turnover and need attention

At the user level, this metric can help you identify power and problem users. Power users (or power users for each account), my friend, are going to be key to the health and potential expansion of an account. Problem users (those whose engagement is decreasing over time) can quickly become the canary in the coal mine for any account. Use them to gain information.

Customer Success Metric #3: Product Adoption Rate

Let’s get real here: One of the main jobs of your customer success team (and one of the hardest) is getting users to adopt as many of features as possible. Healthy businesses have healthy Adoption Rates and looking at an overall Adoption rate for your paid users can help determine whether or not this is happening.

As with Engagement Score, looking at Adoption rates across different segments can also be helpful. You may have accounts that are on self-serve plans vs high-touch service plans — looking at Adoption rates across these two segments can help identify if your high-touch efforts are helping. (The same is true for looking at Adoption across different pricing tiers.) Looking at Adoption rates across various segments can offer insights that can help drive higher-level customer success strategies. 

As a tactical customer success metric, it’s important for you customer success teams to know the Adoption rate of their accounts so they can effectively target accounts with specific and relevant support. An Adoption rate metric at the account level can help a CSM understand each account’s use case and and give them the information they need for futher Adoption. 

Customer Success Metric #4: Activation Rate

Activation rate is a customer success metric targeted at your new accounts and users — and it’s an important one. Looking at Activation rates at a management level can help you understand the success of your on-boarding efforts. 

But when you track Activation rate at the account level, it becomes a powerful tactical customer success metric. Every customer success team is responsible for on-boarding users and accounts, so having the ability to track the degree to which each account is on-boarded is essential for prioritizing and organizing their work. Having this data can help a CSM focus on those accounts that are stuck in the process and understand exactly what the sticking points are. 

Product Engagement Metrics Are Foundational for any SaaS Customer Success Team

Quite so! Operational metrics give you insights into the health of your business, but when used correctly, they are also powerful tools that help you define specific actions. The former management-level use case dovetails nicely with the latter tactical-level use case.

This is especially true when it comes to metrics for your Customer Success team. Without customer success metrics that can inform and drive action, your team will be spending a lot of time guessing and chasing after red herrings. Not excellent.