SaaS User Engagement

SaaS User Engagement Metrics

You don’t have a successful business until you have constant SaaS User Engagement and you won’t achieve product-led growth unless you do.

A taxi app will always be used less often than email, and there isn’t a single engagement metric that is passed around from product person to product person as the standard.

When it comes down to it, though, engagement is defined as people repeatedly doing meaningful activities in your product.

Every successful SaaS company is built on active and engaged customers. If you don’t have a consistent stream of people using your product regularly, you don’t have a sustainable SaaS business. You won’t accomplish product-led growth, either.

This is since subscription money from SaaS applications is generated over months, if not years. It might take up to 7 months for even the healthiest SaaS businesses to generate positive revenue. Your customers must keep using your product for as long as feasible.

What is SaaS User Engagement?

Before we get into SaaS User Engagement tactics, let’s define what engagement means from a product perspective—and why it’s such an important metric for your SaaS business.

In a word, the engagement rate is the percentage of customers who continue to use your product after a certain amount of time has passed. Tracking how many people are engaged with your product is an excellent sign of its overall health, and any changes in this number can be a precursor to future issues.

The fundamental difficulty in tracking product engagement is that the concept of “active” varies greatly between products. While a social media automation tool may have users logging in daily, a finance tool may have users logging in just once or twice a month and yet consider it to be high engagement.

After just one use, most SaaS companies lose their free trial customers. To improve your conversion rate, it’s vital to keep those users engaged during their trial time. However, to improve SaaS User Engagement, you must provide value over time.

Because engagement grows throughout a user’s journey, a sincere attempt to improve it requires growing regular product usage at every phase. A strong focus on communication and user interaction may help you prevent churn among your existing customer base by keeping them informed about product changes and identifying concerns before they become major issues.

Why it is important to understand SaaS User Engagement

A new user will almost certainly use your product within a few days of signing up for it. They are receiving something nice from the experience if they continue to use the product. If they opt not to utilize the product, they’ve probably determined it’s not worth their time. This is bad because users who don’t think your product is worth their time will eventually quit paying for it. As a result, how frequently your users interact with your product is a key sign of its health.

Furthermore, more engaged users are more likely to be active and provide feedback that can help them and enhance the customer experience for everyone.

You can gain additional benefits through further analysis of your SaaS user engagement, such as:

  • Enhancing customer loyalty
  • Strengthen your marketing and targeting plan
  • Forecasting and long-term planning
  • Setting sales efforts first
  • Boosting go-to-market approach

How to Determine Your Engagement Rate

Tracking your engagement rate is critical since it is the only way to ensure that your attempts to improve it are effective. Fortunately, your engagement rate is simple to monitor. Simply divide the number of active users in a particular period by the total number of users for each user cohort for which you wish to determine user engagement.

Number of active users in a time period / the number of total users = engagement rate

Other critical engagement metrics to track

You can’t measure user engagement unless you also track the other engagement metrics used to calculate it.

Considering that engagement is defined as active users divided by total users for a certain cohort during a given period, you’ll need to measure those two metrics at the very least.

However, there are a few other metrics that should be tracked.

Let’s have a look at some of them.

Total number of active users

To measure active users, you must first define the term “active user”. You should choose a metric that reflects user involvement well. This will be different for each product, but there should be some basic activity that suggests a user is actively using your product rather than passively.

Churn Rate

If your users are churning at a high pace, likely, your product isn’t engaging them. Compare churn rates to engagement rates to make this metric more relevant. This will alert you to customers who are at risk of churning and provide you with an engagement threshold to aim for.

Retention Rate

The retention rate is the inverse of churn and may be used in the same way. How engaged are the customers that stay the longest, and what can you do to get other users to that level of engagement?

Net Promoter Score

The ultimate reason for measuring user engagement is to determine the value that users receive from your product. Another similar metric is the Net Promoter Score. Improving this score should also help with engagement.

DAU, WAU & MAU

User engagement is evaluated over a specific period. To better identify what trends exist, track engagement throughout each of these periods—daily active users, weekly active users, and monthly active users.

6 tried-and-true strategies to boost SaaS product engagement

1) Help Users to Accomplish Meaningful Actions and Obtain Immediate Value

The impact of user onboarding on the whole customer journey is significant. Since your onboarding sequence is your users’ first hands-on interaction with your product, it’s critical to establish a solid first impression. Consider user onboarding to be the hook that draws users in for the long haul.

Because user motivation is usually at its peak during onboarding, it’s a fantastic moment to urge them to take action that will provide instant benefit. Each new user should be taken through essential elements of your product as rapidly as possible, to assist them in discovering your product’s primary value proposition.

2) To Give Appropriate And Effective Message, Use UX Writing

Don’t approach UX writing as an afterthought. The microcopy you use across your product—CTA buttons, form descriptions, modal dialogs, and so on—can assist users in effectively completing tasks, explaining technical aspects in ordinary language, and encouraging them to continue engaging with your product. Of course, excellent content may also assist lead trial users to upgrade to premium accounts, boosting your revenue.

Tips:

  • Write as a human being. Avoid technical jargon, keep phrases short and simple, and use people’s own words to explain your product wherever necessary.
  • To build urgency and help your CTAs stand out, use powerful language and design elements like white space.
  • Inject some individuality if your brand allows it. Don’t be scared to incorporate your brand’s joyful and pleasant personality into your microcopy.

3) Gradually Provide New And Useful Product Features To Users

That cool new feature you’re implementing could be quite useful—but only if people are aware of its existence. Emails and blog posts are good ways to announce new product additions, but you also need to connect with your customers within your app to help them find and accept your new feature.

Tips:

  • Treat each new feature announcement as if it were a mini-product launch, with in-app callouts directing people to your new feature. A quick tour or modal popup may be useful for complex rollouts to clearly explain how the feature works and how it will benefit users.
  • However, keep new feature announcements brief and to the point. You want to make it easier for your users to embrace new features, but interrupting their workflows with long or heavy-handed interruptions defeats the goal.

4) Emails Can Be Sent Automatically Based On In-App Activity

SaaS User Engagement occurs outside of your product as well. Setting key events to send a timely email may be a wonderful way to reinforce the guidance you’re providing within the product through another channel, increasing the likelihood that customers will act. This is due to a phenomenon known as the mere-exposure effect, which states that individuals favor concepts with which they are familiar.

Here are some examples of behavioral emails you may send:

  1. Activation/sign-up emails. 
  2. One-off emails for specific events. 
  3. Educational drip sequences.
  4. Customer feedback surveys.

Tips:

  • It’s all about the timing. Use in-app triggers to send the correct email to the right person at the right time.
  • Create a smooth email flow by ensuring that each email directs customers to the logical next step in your offering.
  • Make sure to reward users for completing each stage. This reward might range from a simple checkbox on an onboarding checklist to a flashy animated modal popup.

5) Gather Qualitative Feedback To Identify Areas For Improvement

Quantitative data and analytics technologies can reveal a lot about your product’s weaknesses. However, it is unable to explain why. You’ll need to ask your users for this information.

Qualitative data from live chat tools, user surveys, NPS ratings, and session recordings may all help you figure out how to better engage people with your product.

Tips:

  • Keep an eye on your feedback frequently. It’s easy to get caught up in your product; taking time to watch your customers or listen to comments may help you develop empathy and spot flaws early on.
  • Look for patterns in your data. While individual user input is valuable, it’s frequently more effective to seek for numerous users who are reporting the same issue—this helps you focus on the most essential improvements you can do to enhance SaaS User Engagement among the majority.

6) Cut Features That People Aren’t Using

Knowing what customers don’t require is sometimes just as essential as knowing what they do want.

Too many features that don’t provide value generate product debt, which may cause your main product to suffer and lead people to assume you’ve lost focus on the key features they signed up for in the first place.

Removing features is a difficult decision, especially when you’ve invested a lot of time and effort in their creation. However, if your analytics data reveals that customers aren’t utilizing that sparkling new feature you launched last year, you have two options: ask them why they aren’t using it and spend additional resources to improve it, or cut your losses and cancel the feature immediately.

Tips:

  • Removing unnecessary features allows people to concentrate on the most important and helpful aspects of your product. Users will identify the essential value faster if you present fewer options.
  • Large, complex feature sets can add to your team’s development and maintenance expenditures, lowering the amount of time you have to focus on refining the key functions.

When It Comes To SaaS User Engagement, There Is No Definitive Answer

Every product and every user is unique. It will take some trial and error to figure out the best strategies to keep users interested. And, even if your product surpasses expectations, some people may switch brands for the sake of variety. Which is a terrifying idea!

The good news is that the possibilities for enhancing SaaS User Engagement are virtually limitless. Every enhancement you make, whether it’s improving your onboarding, refining your microcopy, releasing new features, or gathering user feedback, may improve user experience, promote sustainable growth, and keep your churn rate in control.

Use Radix to Track & Analyze Vital Metrics to Improve Churn, Boost Revenue, and enhance SaaS User Engagement!

If you’re not using Radix to reduce churn and monitor vital metrics, you’re doing it wrong. At the same time, be sure to set up a system that automatically alerts you if any vital metrics are on the decline so you can take steps to reverse them before they get out of hand. With that said, don’t obsess over your conversion rate and all other vital metrics—continue to build your product with a clear vision of how it can add value in your customers’ lives, and then be patient. Great products and companies take time, and if you believe in yours, your prospects will come around.

Start Your Free Trial Here!

Radix Sign up

Read More:

Trial User Onboarding Methods in SaaS

8 Strategies to Increase your Free Trial Conversion Rate

How to Effectively Convert Free Trial Users into Paying Customers in SaaS?

Churn Analysis in SaaS Business

Churn Prevention: How to Identify & Prevent Churn with Radix

Luis Cordero Schiffmann
Luis Cordero Schiffmann
Business Developer Manager & Web3 Passionate MBA with expertise in Science, Technology, and Innovation. I'm a big fan of the crypto revolution, the internet and business.