4 SaaS customer service metrics to follow

Today’s customer support platforms offer more ways to measure customer success than ever – but which are the most important KPIs to pay attention to? This depends on what goals are most relevant to your company.

Most SaaS companies will want to track general customer service metrics like Net Promoter Score (NPS) and customer satisfaction score (CSAT). However, you’ll also want to monitor SaaS-specific customer service metrics such as first response time (FRT) during trial and net revenue retention (NRR).

Let’s take a look at four important SaaS customer service metrics to focus on, how you can measure them, and how to use them to help your team improve.

Why SaaS Customer Service Metrics Matter

Post-service surveys play a key role in the business world, and many companies place a lot of weight on their net promoter score (NPS) and customer satisfaction score (CSAT). NPS surveys can help you identify overall trends in how satisfied customers are with your brand, while CSAT scores offer a big-picture view of how your support team is faring.

These surveys are lagging indicators. They identify issues or highlight positive trends after customers have had an interaction with your brand. However, for SaaS companies, it’s important to gather more detailed metrics even earlier — including during the onboarding process and free trial period. These can help you make sure that you’re focusing your efforts on areas that make a material difference to your business, which can be leading indicators of improved overall customer satisfaction.

Here are four SaaS customer service metrics to keep an eye on:

1. Free Trial Conversion Rate

Free trials are one of the hallmarks of SaaS products. While not all SaaS companies offer a trial, it’s common to offer free trial options that either prompt the user to sign up or automatically enroll them at the end of the trial period. Some companies also offer a “freemium” version that never expires, but has ads or other limitations.

If you’re offering a free trial, it’s important to track the conversion rate to see how well it’s performing, which of your pricing models leads to the most sign-ups, and how quick, effective customer support can boost this rate. If you offer a free version of your product, you can use the same methodology to track free-to-paid conversion rates.

How to Calculate Your Free Trial Conversion Rate

To find this metric, divide the number of customers who subscribed after signing up for a free trial with the total number of customers who signed up for the trial during a given period, then multiply it by 100 for the free trial conversion rate.

So, if 192 free trial users bought your product out of 800 total free trial users, you’d divide 192 by 800 (0.24) and multiply by 100 for a conversion rate of 24%.

There’s no one benchmark that’s right for every SaaS business, so your optimal conversion rate could be anywhere from 15% to 60%, depending on your business model and the type of free trial you offer.

How to Improve Your Free Trial Conversion Rate

To optimize your free trial conversion rate you need to understand what drives customers to convert (or to walk away). Are conversions low because it’s too hard to sign up, or because your customers aren’t getting what they wanted out of your product? Once you understand what drives or impedes the conversion behavior, you can make changes to improve your rate.

Free trial conversion rate isn’t generally owned by support teams. Most SaaS companies will assign responsibility for this metric to either product, sales, or success teams. However, support teams can have a big impact on this metric.

Consider sending out follow-up surveys or reviewing support tickets to find out what might be keeping customers from moving past the trial period. And make sure there is an open and clear channel of communication between your support team and your product team so your support associates can let product designers know about any issues they hear from customers that prevent them from upgrading.

2. Free Trial Ticket Percentage

This metric looks at the percentage of support tickets that are generated from new customers who are using free trial versions of your product. Tracking this metric can help you determine how easy it is to use your product while on a free trial, as part of the overall customer experience.

How to Calculate Your Free Trial Ticket Percentage

Let’s say that your total ticket volume is 1,000 tickets over a specific time period, like one month. The number of tickets from free trial users is 450. You’d divide 1,000 by 450 and multiply that answer, 0.45, by 100 for a final percentage of 45%.

That means nearly half of your customer support tickets are focused on addressing issues for free trial users, rather than on building customer relationships with your existing customer base. A high free trial ticket percentage can indicate that you have issues with onboarding.

How to Improve Your Free Trial Ticket Percentage

In order for your SaaS business to improve this customer service metric, make sure your self-service support options, such as guides, walk-thrus, knowledge bases, and FAQs, are up-to-date and easy to follow. Take a close look at your onboarding process to make sure it is clear to customers that they know how to get set up and start successfully using your product. 

3. First Response Time (FRT) During Trials

Agents discussing SaaS customer service metrics that need to be checked

First response time refers to the amount of time it takes for customers to get an initial response to their support request. Some customers will always need help during the free trial period, especially if you’ve just rolled out a new feature or upgrade that isn’t yet explained in the knowledge base or reflected in your marketing materials.

Responding quickly and effectively to these new users during the free trial period can help improve your free trial conversion rates. It also helps potential customers resolve their issues quickly, reducing their frustration and improving their overall experience, which can lead to better NPS scores later.

An optimal FRT depends on the channel, but a general rule for SaaS customer support is less than 24 hours for email tickets, less than 3 minutes by phone, and less than 60 minutes for social media.

How to Calculate Your Average FRT for Trials

For our purposes, you’ll want to look at the FRT only for tickets created during users’ free trial periods. Total the first response times in a given period. Then, divide this by the total number of tickets you got in that same period. 

Let’s say that on one day your customer support team has a total FRT of 82 minutes across 14 total tickets created by users on a free trial. You divide 82 by 14, and get an average FRT of 5.8 minutes for this period of time. 

That said, rather than looking at this metric each day, it might be useful to look at it daily across a trailing time period that matches your free trial period (e.g., like 14 days). That way you can chart improvements or declines over a rolling time period that roughly correlates to new user cohorts.

How to Improve Your FRT for Trials

If your first response time is too high, consider developing an omnichannel customer support team to offer a better experience across platforms. You can also hire more customer support staff during busy periods, such as after a promotion or during seasonal spikes, or allocate specific team members to focus on free trial tickets.

You may also want to track your first contact resolution rate to ensure that issues are actually being addressed in that first response.

4. Net Revenue Retention (NRR)

Net revenue retention (NRR) is a metric that measures expansion and churn to understand how healthy your existing customer base is. With this metric in hand, you can develop strategies to upsell customers on new or existing products, move them onto higher-priced plans (or sell additional seats), or reduce the number of cancellations.

This metric is not a customer support metric, and is usually owned by customer success teams. However, because customer support teams are often the first line of defense against churn (and because some customer issues may be solved by upgrading), customer service teams are well-positioned to affect NRR. When considering revenue dashboard examples, NRR stands out as a pivotal indicator of customer retention and growth potential.

How to Calculate NRR

To measure it, you’ll need to determine your monthly recurring revenue (MRR), along with any revenue churn during a given time period. Revenue churn refers to losses due to customers canceling or downgrading their subscription, while upsells and cross-sells represent increased sales to existing customers. Here’s how to calculate this metric:

{((Starting MRR + upsell MRR + cross-sells MRR) - (downgrades + churn)) / Starting MRR} x 100 = NRR

Now, let’s see how this would work with an example. If you had MRR of $26,000, $2,000 in each upsells and cross-sells, $2,000 in downgrades, and $3,000 in churn, your NRR would be 96%.

{(($26,000 + $2,000 + $2,000) - ($2,000 + $3,000)) / $26,000} x 100 = 96.15%

Since your NRR is less than 100%, your existing revenue for the month would be in decline due to a drop in income and churned customers. You basically want expansion to outpace downgrades and churn. A good NRR will depend on the type of customers you sell to, but in general, a healthy SaaS business has an NRR of at least 100%. Businesses with NRR below 100% have a leaky bucket, meaning to grow they need to add more new customers to compensate for the monthly shrink in existing revenue.

How to Improve Your NRR

You can take steps to improve your NRR by asking for customer feedback on your pricing options, figuring out the reasons customers downgrade or churn, or by better understanding the average customer’s product usage. If customers are downgrading because they don’t make use of existing features, there may be opportunities to improve your NRR.

One your SaaS product has product/market fit and improving NRR is a priority, it’s time to hire a customer success manager to follow up with prospective customers and help them transition into more active users of your product or identify obstacles to their becoming active users.

SaaS Customer Service Metrics to Boost Conversions

Agents discussing SaaS customer service metrics on a tablet

SaaS businesses should track general customer support metrics like their NPS score, customer satisfaction scores, and average resolution times. But NPS surveys can only tell you so much about what’s actually going on with your SaaS users.

For that, you’ll want to track SaaS customer service metrics that can help you reduce customer acquisition costs and boost customer retention, such as your free trial ticket percentage and first response time (FRT) during trial.

By tracking the most important metrics for your team, you’ll be able to maintain active users, reduce revenue churn, and improve customer engagement and profitability.

Still need help addressing customer service challenges? Follow the PartnerHero blog to learn more about key customer support metrics and how to deliver top-notch support.