Customer Metrics

Customer metrics are quantifiable measurements that help businesses understand customer behavior, satisfaction, and value. These metrics guide strategic decisions around acquisition, retention, support, and product development.

TLDR

Track these essential customer metrics:

  • Acquisition: CAC (Customer Acquisition Cost), conversion rates
  • Engagement: DAU/MAU, feature adoption, session length
  • Satisfaction: NPS, CSAT, CES
  • Retention: Churn rate, retention rate, customer lifetime
  • Value: LTV (Lifetime Value), ARPU, expansion revenue

Why Customer Metrics Matter

You can't improve what you don't measure. Customer metrics help you:

  1. Spot problems early - Rising churn or dropping engagement signals issues before they become critical
  2. Allocate resources wisely - Know whether to invest in acquisition, retention, or product improvements
  3. Prove ROI - Show the business impact of customer success initiatives
  4. Make data-driven decisions - Replace gut feelings with actual evidence

Core Customer Metrics Categories

1. Acquisition Metrics

Customer Acquisition Cost (CAC)

CAC = Total Sales & Marketing Spend / New Customers Acquired

Example: Spend $10,000 on marketing, acquire 100 customers → CAC = $100

Conversion Rate

Conversion Rate = (Customers Acquired / Total Leads) × 100

Time to Customer Average time from first touch to closed deal. Shorter is generally better for SaaS.

2. Engagement Metrics

Daily/Monthly Active Users (DAU/MAU)

DAU/MAU Ratio = Daily Active Users / Monthly Active Users

A healthy ratio is typically 20-30% (users engaging 6-9 days per month).

Feature Adoption Rate

Feature Adoption = (Users Using Feature / Total Users) × 100

Session Length & Frequency How long users stay and how often they return. Context matters - longer isn't always better.

3. Satisfaction Metrics

Net Promoter Score (NPS)

NPS = % Promoters (9-10) - % Detractors (0-6)

Scores range from -100 to +100. Above 0 is okay, above 50 is excellent.

Customer Satisfaction Score (CSAT)

CSAT = (Satisfied Customers / Total Responses) × 100

Typically asked after specific interactions: "How satisfied were you with this experience?"

Customer Effort Score (CES)

CES = Average of "How easy was it to..." responses (1-7 scale)

Lower effort = better experience = higher retention.

4. Retention Metrics

Churn Rate

Churn Rate = (Customers Lost / Total Customers at Start) × 100

Example: Start month with 1000 customers, lose 50 → Churn = 5%

Customer Retention Rate

Retention Rate = ((Customers End - New Customers) / Customers Start) × 100

Cohort Retention Track what % of customers from a specific month are still active over time.

5. Revenue Metrics

Customer Lifetime Value (LTV)

LTV = ARPU × Customer Lifetime

Or more detailed:

LTV = (Average Revenue per Customer × Gross Margin) / Churn Rate

Average Revenue Per User (ARPU)

ARPU = Total Revenue / Total Active Customers

LTV:CAC Ratio

LTV:CAC = Customer Lifetime Value / Customer Acquisition Cost

Target: 3:1 or higher. If it's lower, you're spending too much to acquire customers.

Customer Health Metrics

Smart teams combine metrics into a single "customer health score":

Example Health Score Components:

  • Product usage (40% weight)
  • Support ticket volume (20% weight)
  • NPS or CSAT (20% weight)
  • Payment history (20% weight)

Scores typically range 0-100. Below 50 = at-risk, above 75 = healthy.

Metrics by Business Type

SaaS Companies

Focus on: MRR, churn, LTV:CAC, product engagement, NPS

E-commerce

Focus on: AOV, repeat purchase rate, cart abandonment, CSAT, customer lifetime value

B2B Services

Focus on: Client retention rate, project profitability, referral rate, account health

Subscription Businesses

Focus on: Churn rate, reactivation rate, subscription lifetime, upgrade rate

Common Mistakes When Tracking Customer Metrics

Tracking too many metrics - Pick 5-7 that actually drive decisions. More creates noise.

Ignoring context - A 5% churn rate is great for B2C, terrible for enterprise SaaS.

Vanity metrics - Total signups mean nothing if they don't convert to paying customers.

Not segmenting data - Enterprise and SMB customers behave differently. Measure separately.

Measuring but not acting - Metrics only matter if they influence decisions.

How Often to Review Customer Metrics

  • Daily: Critical alerts (major spike in churn, payment failures)
  • Weekly: Engagement trends, support volume, key health scores
  • Monthly: Comprehensive review of all core metrics, cohort analysis
  • Quarterly: Strategic review, goal setting, trend analysis

Tools for Tracking Customer Metrics

Most teams use a combination:

  • Analytics platforms: Google Analytics, Mixpanel, Amplitude
  • CRM systems: Salesforce, HubSpot, Pipedrive
  • Customer success platforms: Gainsight, ChurnZero, Totango
  • Support tools: Zendesk, Intercom, Chatisto
  • Data warehouses: Snowflake, BigQuery for custom reporting

Relationship to Customer Service Metrics

Customer metrics and customer service metrics overlap but serve different purposes:

Customer metrics measure overall customer health and business performance.

Customer service metrics specifically track support team efficiency and quality.

Both are essential. Great service metrics (fast response times) mean nothing if customer metrics show people are still churning.

FAQ

What's the most important customer metric? Depends on your business stage. Early stage: focus on retention and product engagement. Growth stage: LTV:CAC ratio. Mature: expansion revenue and net retention.

How many customer metrics should I track? Start with 5-7 core metrics. More than 15 becomes overwhelming and dilutes focus.

What's a good customer retention rate? SaaS B2B: 90%+ monthly retention. Consumer apps: 40%+ (30 days). E-commerce: highly variable by vertical.

Should I track leading or lagging indicators? Both. Lagging (like churn) tell you what happened. Leading (like engagement drop) tell you what's about to happen.

How do I improve customer metrics? Start by identifying your worst-performing metric, understand why it's lagging (talk to customers!), then run focused experiments to improve it. Measure the impact.

How do I calculate support staffing costs? Use our Call Center Staffing Calculator to estimate how many support agents you need based on ticket volume. It calculates your labor costs and shows how AI automation could reduce staffing requirements.

Ready to improve your customer metrics? Start by implementing better customer support with Chatisto's AI agents - they help reduce response times and improve satisfaction scores.