When competition heats up, the best product experience wins—and, in this economy, competition has never been more fierce.
Maybe you’re hitting your OKR’s, sure. But if you don’t know how the competition is faring, do you really know if you’ve got a winning product experience? (Hint: you don’t).
That’s where we come in. 🤗
We’ve spent the past decade working with thousands of product-led SaaS companies dedicated to leveling up their product experience. Whether folks are new to PLG or experienced vets, we’ve heard the same 2 questions over and over again:
- What metrics should we focus on?
- Do you have customer benchmarks?
Enter the Appcues benchmark report.
Before you can improve product performance, you have to measure it. But with the overwhelming number of touch points, tools, and user feedback mechanisms out there, knowing which metrics to focus on has never been more challenging. Fortunately, with a bit of help from our benchmark report, you can uncover the insights you need to chart your product’s success. This report features our shortlist of the 7 most impactful product experience metrics—so you can filter out the noise and focus on growth.
Of course, knowing what to track is only half the battle. So, we surveyed 250 of our customers and benchmarked their performance across these 7 core metrics. This post provides a high-level overview of our findings, but if you’d like the full report, download it here:
2022 Benchmark Report: 7 Key Product Growth Metrics
- Industry benchmarks for all 7 growth metrics
- Surprising insights on onboarding and product metrics
Who’s setting the benchmarks?
Before we get started, let’s take a peek at our wonderful customers who responded to our survey:
- PLG is a team sport—so, naturally, our respondents represent a variety of roles. The largest group of respondents (38%) work in a product role.
- The majority of responses (about 45%) earn $0–$30M in annual revenue.
- About 40% of respondents have an annual contract value (ACV) below $7,500, while ~16% clocked an ACV between $15,000 and $50,000.
- While the largest percentage (36.9%) of respondents offered a free trial, the second-largest group (31.7%) didn’t offer a free option at all.
7 metrics to evaluate your product experience
Before we reveal the benchmarks, it’s important to understand how we define each metric:
Alright, now let’s get into it! 💪
Free-to-paid Conversion
📊 The average free-to-paid conversion rate was 14.65%.
What did we learn?
- Free trials convert better than a free tier: Companies offering a free trial saw an average conversion rate of 16.7% vs. companies with a free tier option who eked out a 11.37% conversion rate.
- Lower ACV correlates to a higher free-to-paid conversion rate: Products with an ACV of less than $500 had the highest conversion rate (15.4%). On the flip side, products with an ACV between $7,500–$50,000 saw conversion rates below 11%.
Activation rate
📊 The average activation rate was 30.22%.
What did we learn?
- Bigger companies have higher activation rates: Companies with more than 1,000 employees earned a 53% activation rate—a stark contrast to companies with up to 50 employees, who saw ~19%.
- Lower ARR corresponds to lower activation rate: Companies with an ARR of less than $1M had the lowest activation rate: 22.31%. As for the activation-rate sweet spot? Companies with ARRs of $5M–$10M enjoyed a stellar activation rate of 38.67%.
Time to value
📊 The average time to value was 56.2 days.
What did we learn?
- The smaller the company, the faster the time to value: Smaller organizations (based on employee count or ARR) with smaller transaction values reported faster time to value, likely related to lower product complexity.
- Freemium beats out free trial: The average time to value for freemium tier products was 2.28 days. The average time to value for a free trial was 33.42 days.
Anyone else find it interesting that the average time to value for a free trial exceeds the typical trial duration of 14 to 30 days? Just sayin’…
Adoption rate
📊 The average adoption rate was 33.67%.
What did we learn?
- Sometimes, bigger is better: Small businesses with 50 or fewer employees achieved a 31.31% adoption rate, but companies with more than 1,000 employees hit a whopping 55%!
- Lower investment = lower adoption: Products with an ACV of less than $500 had the lowest adoption rate at 14.56%. Higher ACVs were strongly correlated with better adoption rates—and companies with an ACV between $2,501–$7,500 notched a rate of 53.67%.
Net Promoter Score (NPS)
📊 The average NPS was 29.66.
What did we learn?
- The lower the ARR, the better the NPS: Companies in the lowest 2 ARR tiers (less than $1M and between $1M–$5M) earned the highest NPS scores—just over 41 and 36 respectively. (Respect is important, yo.)
- Free option combos drive higher NPS: Companies that offered no free option or one free option (free trial or freemium) saw NPS scores in the mid to high 20s. Companies that offered both a free trial and a freemium option achieved ~43 NPS score.
Customer retention rate
📊 The average NPS was 79.2%.
What did we learn?
- Higher ACV tends to correlate to higher retention: The highest customer retention rates belonged to companies with an ACV over $100K. This customer loyalty may be due in part to a product’s higher ticket price—driving internal support à la resources and ROI.
Net revenue retention rate
📊 The average net revenue retention rate was 102%.
What did we learn?
- Bigger isn’t always better: Companies with more employees and higher ARR tend to have a lower NRR (by a spread of about 20 points). We suspect that as companies grow larger, it becomes more challenging to increase the value of each existing account.
Remember, this was the tl;dr version of each product benchmark—if you wanna dig deeper, be sure to download the full report here.
How to best the benchmarks
Now that you’ve got an idea of how your SaaS measures up, here are a few tactics and ideas to help you beat the benchmarks.
Self-serve onboarding
Providing a self-serve onboarding helps companies deliver a better user experience and a shorter time-to-value—not to mention it’s just wildly resource-effective. Respondents taking advantage of self-serve onboarding tactics and in-app walkthroughs saved an average of:
- 646.90 hours per month in success and support time
- 598.95 hours per year in engineering time
(Pssst, that’s a savings of around $70,000 a year with average salaries of $140,000 for engineers and $95,000 for customer success. 🤑)
Map out your user journey
A user journey map is a visual representation of how a customer moves through your marketing and sales funnels. It includes all the key touchpoints to capture the overall customer experience. User journey maps reveal important insights that help your product team design an effective onboarding.
Typically, the user journey map is built on a 4-phrase framework: awareness, consideration, conversion, and adoption.
💡 Pro Tip: We recommend mapping this out using the 5 stages of the product-led growth flywheel instead: evaluate, activate, adopt, expand, and advocate.
Align metrics with your user journey
Once you have your user journey mapped out, you can overlay the metrics you want to track onto the corresponding parts of the journey. This helps you see the connection between various touch points and user behavior. It’s also handy for helping you identify what’s working and where there are gaps are in your product experience.
Always be testing
Since there’s no one-size-fits-all strategy when it comes to improving metrics, a test-and-learn approach is the most efficient way to make progress. To ensure you get clear results, focus on one metric at a time. Once you’ve identified an opportunity, just follow these 3 steps:
- Create a hypothesis about a possible solution.
- Test your hypothesis with quick, in-app experiences.
- Evaluate the results and iterate.
Level up with the right tech stack
Having robust tools in your product stack enables you to test-and-learn at scale. In competitive environments (read: SaaS landscape) speed to market is critical. Select a tool that makes it easy to get started and empowers your team to rapidly iterate.
Remember, relying on engineering teams to make continuous changes often results in deprioritizing small (but meaningful!) product changes. Every update takes engineers away from working on core product functionality—which is exactly what no-code product adoption tools like Appcues solves for.
Customers that use Appcues saw the following improvements across each core metric:
If you, too, want your product metrics to go up and to the right, then might I recommend scheduling a personalized demo with Appcues. The next time we publish a report, it'll be your benchmarks everyone is trying to best. 🤓
