SaaS Product Metrics

Benchmark Report - 2024

SaaS Product Benchmarks such as average User Activation Rate, Time to Value (Activation), Retention Rate, or Product Adoption Rate are hard to come by - and even harder to compare in a meaningful way. As a Product Analytics platform, we had the opportunity to collect first-party data from 547 SaaS companies - and segment the report by company size, industry verticle, and PLG vs SLG approach to create a more accurate, actionable benchmarks report.

The below study contains not only the raw average and median numbers - but also the interpretation of the data, expert quotes, and actionable tips on how to improve your vital product metrics.

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Why You Should Read This Report?

Make Better, Data-Driven Decisions

Benchmark Your Performance against Industry Standards

Optimize Your Metrics to Maximize Your Revenue Growth

Methodology - how we collected the data?

For this report, we pulled anonymized user data directly from Userpilot’s Analytics Dashboards to collect first-party data on 7 product metrics from 547 companies:

The data was collected over the course of one year.

Instruments - where was the data pulled from? 

The data for the report was collected from 5 analytics dashboards and reports:

New User Activation Dashboard

Activation rate and time to value (TTV).

Core Feature Dashboard

Product Adoption Rate, Core Feature Adoption Rate

NPS dashboard

average NPS Score

Trend analysis

Checklist Completion Rate

Companies whose metrics we analyzed

We’ve selected a range of key SaaS product metrics to understand how different companies stack up. For most metrics, we analyzed data from the last 12 months. However, for the overall user retention rate, we only examined data from the last 6 months.
Here’s where our data comes from:

Subject Companies

The data for the report was collected from 5 analytics dashboards and reports:
And because we know it’s like comparing apples to oranges when you stack a budget forecast app (used maybe once a month) against a CRM tool (used daily), we tried to rectify it (as much as possible at least…) by splitting our report by industry and company size too.

Companies analyzed by Product-Led vs Sales-Led Strategy

Before we dive into the numbers, let’s get a clearer picture of the business strategies used by the
companies included in our study. Out of 547 companies analyzed, 432 have adopted a Product-Led Growth (PLG) strategy, while 115 were using a Sales-Led Growth (SLG) approach.

As you can see PLG companies are taking the lead, making up 79% of the pie, while SLG companies stay behind at 21%.
Selecting the right growth strategy isn’t just a business decision; it’s a significant factor in determining how effectively your company can attract, engage, and retain customers. So, before we dig into the metrics of our report, let’s have a quick look at what we mean by Product-Led Growth (PLG) and Sales-Led Growth (SLG). Understanding these strategies will give us better insights into why certain companies perform the way they do.

🔎 What is PLG (Product-Led Growth)?

Product-led growth is a business strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers. In the PLG approach, you don’t need a salesperson to convince you of the product’s value. You get to test it out firsthand, often through free trials or freemium accounts. It’s kind of like tasting a sample at a grocery store—you try it, you like it, you buy it.

🔎 What is SLG (Sales-Led Growth)?

Sales-led growth, on the other hand, is a traditional business growth strategy that uses a sales rep or your sales team and their processes to drive conversions and business growth. In this model, the sales force plays a critical role in educating potential customers on the product’s value, often through personalized demos. This approach is common in industries where products are complex or where the setup costs are too high to offer free trial/freemium accounts.

In the last few years, Product-Led Growth has been gaining popularity and the Sales-Led model has oftern been mocked as not being relevant anymore. In terms of our research – we found the results from PLG vs SLG companies to be quite surprising and counter-current. Trust me, you might not be ready for the results we’re gonna share from comparing the Product-Led Growth (PLG) vs Sales-Led Growth (SLG) approaches.

Average Activation Rate

🔎 What is User Activation? Activation is the moment in your users' journey when the user experiences the value of your product for the first time.

User activation rate measures the percentage of new users who complete a specific action that demonstrates the initial value of your product.

Why It's Important User activation is one of the most important SaaS metrics for determining long-term revenue and success, and yet it’s often not measured - perhaps because the activation point is different for each product (and sometimes there may be several different activation points in one product for different personas!). A 25% increase in user activation brings about a 34% increase in MRR in a year (Source: Fairmarkit) - which is the highest of all the “Pirate Metrics”. This shows how important this often-overlooked metric is for your bottom line.

Methodology

We gathered data from 62 diverse B2B companies, using first-party data collected from our new user activation dashboard at Userpilot. This dashboard not only tracks the activation rate but also pinpoints the time to value (TTV) and identifies key drop-off points from sign-up to the critical ‘Value Moment’—when a user first experiences the core benefit of the product. So, it’s real, it’s fresh, and it’s here to help you steer your product to new heights.

You’ll find the average, median, standard deviation, and distribution to get a detailed look at activation rates across the board. And knowing the diversity of SaaS companies, we’ve segmented the data by industry, company size, and by the PLG vs SLG approach.
Curious how your company stacks up? Let’s look at the numbers.

Average Activation Rate – 37,5%

Median: 37%
Standard Deviation (SD): 29.6%
Ranges within 1 Standard Deviation:

So, how do our numbers stack up against the rest?

If you compare our findings to Lenny Rachitsky’s report (which also had a substantial sample size), our study will show almost the same activation rates. Lenny’s study reported an average SaaS activation rate of 36%, while ours is slightly higher at 37.5%.

After collecting the quantitative data, we decided to look into the onboarding of the top-performing SaaS companies in terms of activation rates, and compare their practices to the ones that scored low on activation.

Diving into the onboarding flows of the high achievers, we noticed a pattern:

Diving into the onboarding flows of the high achievers, we noticed a pattern:
about 80% of companies with an activation rate over 50% included a video, GIF, or animated image in their new user onboarding flow. This seems to significantly enhance user engagement right from the start. According to Wysowl, 97% of people believe video is an effective tool to welcome and educate new customers. So, maybe you should give it a try?

By Industry

AI & ML

Average Activation Rate – 54,8%
Median: 74,3%
Standard Deviation (SD): 13.9%

Data interpretation:

AI still feels like a fresh and exciting part in tech. Everyone is keen to explore how AI can streamline operations, unlock new insights, and even create entirely new products or services. This curiosity naturally drives a higher level of engagement as people are eager to see firsthand what AI can do and how it can benefit them. It’s a mix of excitement and the promise of innovation that makes AI so attractive to try out. This is the reason that AI & ML softwares have the highest activation rate.

CRM & Sales

Average Activation Rate – 42,6%
Median: 52.9%
Standard Deviation (SD): 28.7%

Data interpretation:

CRM tools are typically essential for daily business operations. In sales and CRM tools, user activation often involves tasks that are closely tied to immediate business needs, such as importing contacts, setting up pipelines, and initiating communication with prospects. Unlike other industries where users might take time to explore or compare options, in sales, there’s a pressing need to get up and running quickly to manage leads and drive revenue.
Also – most CRMs don’t offer free solutions, so, the direct impact on revenue and productivity pushes users to activate and start using these tools quickly. That’s why the activation rate is higher than average.

Martech

Average Activation Rate – 24%
Median: 7,9%
Standard Deviation (SD): 22.8%

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Data interpretation:

The martech industry is incredibly crowded and competitive. There are tons of tools out there, and they often overlap in functionality, which can make it tricky for users to decide which ones to fully adopt. Users might sign up for several tools to test them out, but they don’t necessarily commit to all of them, which leads to a lower overall activation rate. Another reason is that most of Martech companies have free trials or freemium models, which means lots of people sign up. However, not everyone who signs up ends up using the service or paying for it.

Healthcare

Ranges within 1 Standard Deviation:

Data interpretation:

The healthcare industry tends to have lower activation rates. Why? Healthcare is a heavily regulated industry with a lot of compliance rules regarding patient data security, which may add significant friction to the signup and onboarding process. That’s why getting users to activate and start using healthcare products can be a bit slower compared to other industries where trust and privacy aren’t as big of a deal.

HR

Ranges within 1 Standard Deviation:

Data interpretation:

Out of 40 HR & Edtech companies we analyzed only 1 company was tracking the activation rate. In this field, user engagement can be highly variable. Particularly in HR, many users might sign up only to browse job listings without further engagement like uploading CVs unless they find a job that strongly interests them. Or an Edtech user might browse the courses and not purchase any of them.  

Let’s not forget that companies may prioritize different metrics that they consider more indicative of their success or more aligned with their strategic goals. For example, they might focus on engagement rates or completion rates (in the case of Edtech).

EdTech

Ranges within 1 Standard Deviation:

Data interpretation:

As you remember, none of the edtech companies were tracking user activation rate, that’s why it’s not surprising that they aren’t tracking TTV either.

Let’s not forget that companies may prioritize different metrics that they consider more indicative of their success or more aligned with their strategic goals. For example, they might focus on engagement rates or completion rates (in the case of Edtech).

Fintech & Insurance

Ranges within 1 Standard Deviation:

Data interpretation:

The fintech & Insurance industry is packed with complex services and a ton of regulations, which means it takes a bit more time to get everything up and running smoothly.
In this industry if the initial user experience isn’t intuitive or if the support during early stages (free trial) is lacking, potential customers may feel overwhelmed and drop off before activating. This scenario is particularly true in fintech where the expectations are high, and the user needs to trust the platform completely before committing to regular use. Therefore, ensuring that the onboarding process is as streamlined and supportive as possible is important for fintech companies aiming to reduce time to value and improve activation rates.

By Company Size

Smaller companies often focus intensely on user acquisition and engagement to establish themselves in the market. They might also offer more personalized support and attention to their users, which leads to higher activation rates.

Mid-sized companies might struggle more with activation as they navigate the complexities of scaling, whereas the smallest and largest companies show better performance, likely due to their ability to focus intensely on user needs.

And larger companies have more resources to invest in effective marketing, customer onboarding, and user engagement strategies.

By PLG vs SLG Approach

In our analysis, we stumbled upon some unexpected findings when comparing the PLG (Product-led) and SLG (Sales-led) approaches. Typically, it’s expected that PLG companies would exhibit higher activation rates due to their quick, direct access and hands-on product trials. You know, the whole “try before you buy” approach typically speeds up user activation. However, our report revealed a twist in the tale: PLG companies had an average activation rate of 34.6%, while SLG  companies got a higher rate at 41.6%.
This finding is a bit of a head-scratcher because, conventionally, SLG’s longer sales cycles and the necessity for upfront commitment might suggest lower initial activation. But here’s the kicker—we think this anomaly might be why many companies are now blending PLG and SLG approaches, aiming to harness the best of both worlds, thus potentially driving higher activation rates.
We weren’t quite ready for these results, so we dove deeper into the results. Initially, we thought maybe the freemium or free trial models common in PLG might be diluting activation rates. It’s simple, really: if you’re offering a product for free, without even requiring a credit card, you’re bound to attract loads of tire-kickers. These users sign up, browse around, and might not engage enough to count as “activated.”
On the other hand, SLG companies tend to see fewer but more committed initial users. These customers have already invested financially by the time they start using the product, which could logically lead to a higher likelihood of taking the steps to activate.
The combined approach of PLG and SLG could indeed be setting a new tempo for how companies successfully engage and activate their users. We’re keeping an eye on this trend, as it may redefine standard practices for driving user engagement across the SaaS industry.

How to improve your User Activation Rate?

Data interpretation:

Now that we’ve discussed what a good activation rate is – it’s time to look at some actionable tips on how to improve it. If you want to improve your user activation, you should:
Userpilot offers an out-of-the-box solution for that – a new user activation dashboard designed to monitor and report different activation metrics of new users.
This way, you can:

Expert Insights

How to improve your Activation Rate?

“What’s the key to turning sign-ups into active users quickly?”

Time to Value (Activation)

🔎 What is Time to Value (Activation)? Time to Value (TTV) is the duration it takes for a new user to first experience the core value of a product after starting to use it. It’s a measure of how quickly a product can deliver its promise to users.

🔎 Why It's Important A shorter TTV indicates that users are quickly experiencing the benefits of your product, leading to higher satisfaction and retention rates. By reducing TTV, you can accelerate user adoption and drive faster time-to-revenue.

Methodology

We analyzed the same 62 companies as in our activation rate study to provide a detailed view of how long it typically takes for users to reach their first value moment after starting to use these products. The data was taken again from our user activation dashboard. 

With this dual-focus on both activation rate and TTV you can see not only the percentage of users reaching this key milestone but also the speed with which they do so. By aligning these metrics, we get deeper insights into user engagement and product effectiveness.

Now let’s look at the numbers. The overall average Time to Value (Activation) across all companies stood at 1 day, 12 hours, 22 minutes, and 54 seconds

Time to Value (Activation) – 1 day, 4 hours, 43 minutes

Detailed Breakdown: TTV (activation) by Industry, Company Size, and Growth Strategy

Let’s break down the report again by industry, company size, and PLG vs SLG approach, arranged from lowest to highest.

By Industry

CRM & Sales

Time to Value (Activation) – 1 day, 4 hours, 43 minutes

Data interpretation:

When we talk about CRM and Sales tools, we’re referring to software that’s designed to simplify and streamline everyday business operations. Given their fundamental role in day-to-day business activities, it makes sense that users can quickly discover and appreciate their value.

The straightforward nature of CRM tools means that they often don’t require a steep learning curve. It’s like buying a new smartphone—you take it out of the box, set it up, and boom! You’re making calls, sending texts, and checking emails. Similarly, with CRM and Sales tools, users jump in, set up their pipelines, import contacts, and start reaching out to prospects. It’s that direct and straightforward application that makes the activation process swift.

Healthcare

Time to Value (Activation) – 1 day, 7 hours, 11 minutes

Data interpretation:

While it’s true that the healthcare industry often sees lower activation rates due to strict regulations and the need for high levels of compliance, the actual time to value isn’t as prolonged as one might expect. One significant reason for this is the robust training and support that healthcare organizations receive as part of their onboarding process.
The designers of these platforms are aware of the complexities new users face, and as a result, they streamline the processes as much as possible within compliance boundaries. This leads to an onboarding experience that, while initially might seem slower due to compliance checks, quickly transitions users to active use once those hurdles are cleared.

Fintech & Insurance

Time to Value (Activation) – 1 day, 17 hours, 11 minutes

Data interpretation:

While it’s true that the healthcare industry often sees lower activation rates due to strict regulations and the need for high levels of compliance, the actual time to value isn’t as prolonged as one might expect. One significant reason for this is the robust training and support that healthcare organizations receive as part of their onboarding process.
The designers of these platforms are aware of the complexities new users face, and as a result, they streamline the processes as much as possible within compliance boundaries. This leads to an onboarding experience that, while initially might seem slower due to compliance checks, quickly transitions users to active use once those hurdles are cleared.

AI & ML

Time to Value (Activation) – 1 day, 17 hours, 19 minutes

Data interpretation:

You might wonder why AI and ML tools, despite having high activation rates, take a while before they start showing value. Well, a big part of this is all about how they fit into existing systems. Integrating AI and ML into a company’s daily operations isn’t exactly plug-and-play. It involves a lot of back and forth—tweaking things here, adjusting things there—to make sure the technology not only fits but actually enhances how things are done.
This isn’t just a technical challenge; it’s about making sure the new AI tools are truly lined up with what the business aims to achieve. It takes time to get everything working smoothly and to ensure that these sophisticated tools are not just running, but running in a way that really benefits the company.

Martech

Time to Value (Activation) – 1 day, 20 hours, 47 minutes

Data interpretation:

Martech companies, despite offering free trials and often boasting user-friendly interfaces, still experience relatively high TTV.
The key reason for this is that, unlike standalone tools, martech solutions often need to sync up with various other platforms, databases, and marketing channels to deliver optimal results. This integration process can be complex, requiring configuration, data mapping, and testing to ensure seamless functionality across multiple touchpoints. Moreover, while martech tools may offer intuitive interfaces, their true value often lies in their advanced features and capabilities, which users may need time to explore, understand, and leverage effectively within their marketing strategies. Therefore, while martech products may seem straightforward on the surface, their deeper integration requirements and the learning curve associated with unlocking their full potential contribute to the extended Time to Value.

HR

Time to Value (Activation) – 3 days, 18 hours, 59 minutes

In our study, we noticed that only one HR company was actively tracking Time to Value (TTV). The company operates as a job marketplace for hiring developers.

This platform requires comprehensive onboarding for two distinct user groups: employers and developers. Employers need to set up profiles, post job listings, and manage applications, while developers must navigate job offers, apply, and communicate with potential employers. The high TTV can be attributed to the fact that not many users complete all these steps in one go. The process to reach the point of activation—where meaningful interactions that lead to job matches occur—can be lengthy.

So, given the dual customer base and the specialized nature of the jobs involved, a higher TTV is understandable, though it might be much longer than typical for the HR sector.

EdTech

As you remember, none of the edtech companies were tracking user activation rate, that’s why it’s not surprising that they aren’t tracking TTV either. 

By PLG vs SLG Approach

In our analysis, we stumbled upon some unexpected findings when comparing the PLG (Product-led) and SLG (Sales-led) approaches. Typically, it’s expected that PLG companies would exhibit higher activation rates due to their quick, direct access and hands-on product trials. You know, the whole “try before you buy” approach typically speeds up user activation. However, our report revealed a twist in the tale: PLG companies had an average activation rate of 34.6%, while SLG  companies got a higher rate at 41.6%.

Data interpretation:

Another surprise in the report is that Product-Led companies have a slightly longer TTV than Sales-Led ones, even if it’s just by one hour. 

PLG models focus on the user independently exploring and adopting the product, which can sometimes mean a slower start. Users need to discover features and understand the value on their own, which can take time, especially in products that offer complex or numerous functionalities. 

On the other hand, SLG companies involve direct sales processes where specific product configurations and tailored demos are part of the customer journey. Sales teams in SLG models can directly address specific user needs and pain points, guiding them to quicker activation and thus, a faster TTV.

By Company Size

Data interpretation:

When breaking down the TTV by company size, it’s clear that smaller companies (with revenues between $1,000,000 and $5,000,000) typically achieve the shortest TTV. They’re hungry for growth and can pivot quickly, which means they can implement changes faster.

However, as companies grow, particularly those in the $10 million to $50 million revenue range, they start to feel the growing pains. They want to expand and evolve but might lack the resources to do so as swiftly as they’d like. There’s more bureaucracy, more layers to decision-making, and often not enough hands on deck to focus intensely on every product metric, which tends to slow things down.

But then there’s a twist— big companies, those earning over $50 million, actually manage to pick up the pace again. Even though they’re huge, they have the resources to throw at these challenges. They can afford specialized teams whose whole job is to implement new tech smoothly and quickly, which helps them overcome some of the challenges you see in mid-sized companies. So, when it comes to adopting new tech, being small can be an advantage, but having deep pockets helps too.

How to minimize TTV?

It’s clear that while some factors influencing TTV are industry or size-specific, there are still some strategies that can help any organization minimize their TTV.
To minimize time to value, focus on:

Expert Insights

“How can SaaS companies speed up the time it takes for users to see value from their product?”

The product model is all about speeding up “time to money,” which is delivering the necessary value and business outcome.  Leverage the principles and techniques of the top tech-powered product companies to improve how you produce products.

Onboarding Checklist Completion Rate

🔎 What is Time to Value (Activation)? Time to Value (TTV) is the duration it takes for a new user to first experience the core value of a product after starting to use it. It’s a measure of how quickly a product can deliver its promise to users.

🔎 Why It’s Important A shorter TTV indicates that users are quickly experiencing the benefits of your product, leading to higher satisfaction and retention rates. By reducing TTV, you can accelerate user adoption and drive faster time-to-revenue.