The 4 Product Usage Metrics GTM Teams Use The Most
Your engineering team uses product analytics to figure out what to build next. What if you could use the same data to figure out what, when and whom to sell?
Product data holds incredibly valuable GTM insights. However, to get to those insights, you need to rethink traditional product metrics from a GTM lens.
We interviewed over 200 SaaS & PLG companies to define the following product usage metrics from a GTM team’s lens. Across those we surveyed, these metrics are the most impactful measures driving revenue insights.
A new user just signed up to try out your product. Are they a ‘Tire-kicker,’ or a buyer with serious purchase intent?
Product teams are continually optimizing sign-ups. But as a GTM team, what insights from behavioral data establish purchase intent?
Does the new user just use demo data, or do they bring their own data in? Do they create new use cases in your product? How often do they login? Which channel do they use to learn more about your product? Do they invite other users to engage in your product? Are they visiting your pricing and plans page? How often?
GTM teams typically track the overall customer stage within the CRM and often need customer journey stage information from the product to maintain the overall customer stage within the CRM. Also, GTM teams will tend to take critical actions as the customer makes these stage transitions.
Below is list of the journey stages and transitions that can be useful for GTM teams:
- New user sign ups are critical for Sales and CS teams to create and update contact information in a broad array of CRM tools e.g. Salesforce, HubSpot, Intercom. Also, some CS teams may send a warm introduction email to the user to establish a point of contact.
- Sales teams are interested in getting information on a “returning user” who becomes active after a period of dormancy as often these turn out to be good leads for conversion. Similarly, they are also interested in getting information regarding a deactivated or inactive user as some of these may turn into leads for new accounts.
- Tracking a customer’s subscription status within a self-serve product is also very important for the Sales team in terms of the customer enabling a trial subscription, or an active subscription or transitioning to a canceled subscription.
- Another useful stage of the customer journey within the product is when a clear “intent to buy” has been established. It’s a critical stage to drive proactive sales engagement for free to paid conversions via Product Qualified Leads (PQLs).
Most product leaders understand the usefulness of tracking activation metrics to successfully move users from initial acquisition to the critical ‘aha’ moment of the user finding value in the product. The challenge for the product leader is to design the product to ‘activate’ the most number of users in the shortest amount of time. Therefore product leaders will focus on metrics such as activation rate and/or time to activate in the aggregate towards designing optimal user journeys.
Sales teams are also playing an increasing role in product activation. Several self-service products require a sales assist to help the customer through the onboarding. OpenView Partners publishes a great blog on the sales-assist role. Any sales rep will tell you that a user who has reached the critical “aha” moment is more likely to start a conversation. So how are sales and product teams working together to make those conversations happen?
Time-bound trials are a highly effective sales strategy for driving new revenue. These trials may be structured as a fixed “proof of concept” (POC) duration for the customer to use the product for free, or as a contract that the customer has a right to cancel within an initial period. During this trial period for a given customer, it is very useful for the Sales, CS and Support teams to have regular visibility into how successfully has the customer activated the product.
Ideally, they need real time visibility for each individual customer as to how close the customer is to reaching the activation threshold which can be tracked as an Activation Score. In order to drive a high conversion rate from trials to paying customers, Sales and CS teams will want to proactively reach out to customers with low Activation Scores i.e. not on track to hit the activation threshold within the trial period. Also, Support teams can be better informed with the customer’s Activation Score in appropriately responding to inbound issues or requests from the customer.
While the activation rate and time to activate reflect the aggregate velocity and throughput of activations (useful to the product leader), the activation score is a proxy for the progress a given customer has made in getting to product activation. Some key considerations in developing a good activation score are:
- Is the customer putting in the required effort into the trial? Onboarding of team members and level of activity in the product are good indicators of the customer’s commitment to the success of the trial.
- Is the usage of the product switching from “testing” to “deployment”? Typically, built-in product consumption thresholds can be good indicators of such a transition.
Product leaders track engagement using metrics like daily, weekly or monthly active users (DAU, WAU or MAU) and feature usage. Considering these measurements in the aggregate gives them insights into increasing the stickiness of their products.
Engagement metrics are equally important for GTM teams where Net Revenue Retention is the key driver of business expansion.
Ready access to engagement metrics combined with consumption data can help the CSM team understand churn risk and activate the account management team to engage the customer well ahead of renewal time. Similar to activation score, GTM teams need to consider engagement at a customer level.
Consequently, it is important to:
- Track the number of active, dormant and power users within an account
- Track the frequency of activity, and the corresponding trends for the cohorts of active and power users, while also benchmarking the activity levels against the broader customer base.
Product consumption is the usage metric most directly tied to monetization. It is a critical business metric for products with a usage based pricing model. Often it may correspond to resource usage (e.g. compute or storage), number of transactions or active users (seats), or some other measure meaningful and valuable to the customer. Sales teams need consumption data for contract renewals and upsells. Finance teams use consumption to drive billing and track revenue which may in turn also determine sales commissions.
Sharing the up-to-date product consumption data with Sales and CSM teams can usefully inform their post-sales activities and help them to be proactive in communicating with their customers without surprising them. In this context, besides the current consumption, it is equally important to provide the corresponding growth metric, forecasted value and flag any sudden changes in the consumption trend.
How Can Immersa Help?
Whenever you’re ready, Immersa can help you:
- Bring your product and CRM data together without a single line of code or involving your engineering team
- Find easy upsells within your current book of business by building plays that notify your CS and sales teams
- Analyze customers to surface high risk accounts to your customer success team.