Summary
This article discusses key product engagement metrics for B2B SaaS, focusing on usage, frequency, adoption, activation, tenure, last active, and active user percentage.
How this helps
By analyzing these metrics at different levels, businesses can enhance user engagement, reduce churn, and drive growth effectively. Additionally, these metrics help guide strategic decisions and actions to improve overall customer experience and business outcomes
The 7 must-have product engagement metrics for B2B SaaS
Are customers getting value from the products you sell? There are 7 questions you have to ask to understand what’s really happening inside your B2B SaaS product.
How much are people using our product?
How often are they using our product?
How deep is their feature usage? Put differently, how many features are they using?
How far are they from getting tangible value from our product?
How long has an account been using your product?
When were they last active in yur product?
How many users are actively using your product?
Each question explores a different part of your product engagement story. The metrics you use to answer these questions fill in the plot.
What story does your product engagement data tell?
When we dig into these questions and metrics, we’re seeking to understand them at three levels.
First, we look at a high level to understand broad trends and the overall health of our product and its user base.
Second, we need to understand how customer behave at an account level. That is to say, we want to know how healthy each account is within our products. This is B2B, so we need to make sure the companies that pay us are getting value.
Third, we want to know how users are engaging with and getting value from our products. Businesses give us money. But people (aka users) are where we deliver value first. An account without any active users is not going to get value from any tools. And if there aren’t any users getting value, an account won’t stick around long. They’ll churn.
Let’s go through those seven questions in more detail, including a closer look at how we collect and use data to answer them.
1. Engagement: How much are people using your product?
The answer to this question is your Product Engagement Score.
Think of the Engagement Score kind of like a credit score. In Accoil, the Score is calculated by multiplying the number of times an account (or user) completes an event by a weight that you assign that event. This gives you raw engagement numbers that can be big and impressive, but they lack context and meaning.
The next step is to normalize these numbers so you can easily compare accounts. While a raw score can be almost any number, your normalized score is shown on a scale of 0-100. So account whose raw engagement score is 253 may have a normalized score of 83/100.
Want to see how Accoil normalizes scores? Learn more here.
Armed with these scores, you can quickly identify power users, accounts at risk of churning, and more.
For example, ZestyCo has a weekly engagement score of 85. ZestyCo’s users are highly engaged, using the product frequently and deeply. In contrast, PeachyCo users average a score of 20. PeachyCo might be churn risk.
Of course, we want high engagement scores. But we also want people to come back regularly.
2. Frequency: How often do people use your product?
The answer to the question of how often is Frequency.
Frequency measures how often a user or account engages with your product. It provides more granularity than just daily, weekly, or monthly active users. For instance, you might find that ZestyCo has been active 5 out of the last 7 days, while PeachyCo has only been active 2 out of the last 7 days. This metric helps you understand user habits and identify accounts that might need more attention or encouragement to engage more often.
Companies like Equals have recently popularized the A3x7 (or “Active 3 out of 7”) metric. According to Equals, “[t]his tells us how many users were active in Equals on at least three or more days in the week.”
And because we’re talking B2B products here, A3x7 is useful because we don’t expect much use on the weekend, but we would like to see a lot of use during the workweek.
We would also like to see those active users taking advantage of as much of our product as possible.
3. Adoption: How deep is their feature usage?
Adoption rate answers the question, "How deep is a user or account's feature usage?"
Adoption rate measures the percentage of your product's features that are being used by a user or account.
For instance, if ZestyCo uses 75% of your features, they are deeply engaged with your product. PeachyCo might only use 25% of the features. The indicates that they might not be fully aware of all your features and capabilities. PeachyCo might need more training to unlock more value.
Calculating adoption rates over specific time frames (e.g., the Past 30 Days vs. All-time) can also provide insights. An account with a high all-time adoption rate but low recent adoption might need re-engagement strategies. An account with consistently high adoption rates is a success story waiting to be showcased.
In both cases, you can use Adoption rate to trigger timely outreach. Re-engage accounts that might be slipping. Congratulate or even upsell accounts with consistently high adoption rates.
Another way to find those champion accounts is to look at Activation rates.
4. Activation: How far are they from getting tangible value from your product?
Activation rate helps you answer the important question of whether or not an account or a user is getting value from your product.
Activation rate is expressed as a percentage of the essential steps completed by a new user or account to become fully activated. For example, if an account needs to complete seven actions to be considered activated and they have completed five, their activation rate is 5/7 or 71%.
This metric is critical for driving onboarding programs and ensuring that new users reach their "Aha!" moment as quickly as possible. Activation rate is also important when building a Product Qualified Lead (PQL) process to hand leads to sales.
Another good indicator for when sales might want to step in is tenure.
5. Tenure: How long has an account been using your product?
Tenure tells you how long a user or account has been using your product.
Tenure helps you tailor engagement strategies based on the user's or account’s lifecycle stage. For example, a new account (tenure less than 30 days) with a low activation rate might need more onboarding support. A mature account (tenure over 3 months) with low adoption rates might need re-engagement efforts.
You can tailor your go-to-market (GTM) campaigns using signals like these. You can also combine metrics like tenure with the last time you saw a user actively engaging with your product.
6. Last Active: When were they last active in your product?
Knowing when a user or account was last active can help you identify potential churn risks.
An account that hasn’t been active in 15 days might need a nudge. An account inactive for over 30 days requires immediate attention.
Last Active is useful for planning retention strategies or forecasting churn. If you take Tenure into consideration alongside Last Active, you can spot long-time customers who’s use may be slowing down.
7. Active User Percentage: How many users are actively using your product?
For SaaS businesses selling to accounts, it’s important to know the active user percentage within each account.
This metric indicates whether usage is concentrated in a few users or spread across the account. A high engagement score driven by a single user in a large account might be a red flag, especially before a renewal period.
Ensuring that multiple users are actively engaged can lead to more sustainable and predictable growth. Strategies to increase Active User Percentage can impact things like retention and expansion revenue.
Bringing it all together
Understanding these key product engagement metrics should help you and your team better understand your customers. These metrics are not just for tracking—they should be actionable, guiding your strategies and decisions.
If you're looking for a tool to easily calculate and act on these metrics, consider using Accoil Analytics. It’s designed to help you make sense of your engagement data and drive meaningful actions.
Want to see how you can track these metrics in your own product? Ask for a demo here (CHANGE LINK).