STEP 5.2: A CASE STUDY
Finds His Levers
Sam's app is growing, but he feels like he's flying blind. He sees new sign-ups, but doesn't know if users are actually using the app or sticking around. He's worried he's focusing on the wrong things.
The Challenge
How can Sam measure the health of his SaaS business? He needs a simple way to track what matters and ignore the vanity metrics.
The Action
Sam uses the `Acquisition, Activation, Retention` framework to identify the key SaaS metrics for his app.
1. Acquisition KPI
"The most important number isn't website traffic; it's the number of new free plan sign-ups each week. This tells me if my marketing is driving real user growth."
2. Activation KPI
"The 'aha!' moment is when a user sends their first invoice. So my activation metric is the percentage of new users who send an invoice within 7 days. This tells me if my onboarding is effective."
3. Retention KPI
"Are users sticking around? My retention metric will be my monthly churn rate (the percentage of paying users who cancel). This directly measures long-term product value."
The Outcome
Sam creates a simple dashboard to track his three chosen KPIs. Now, he can clearly see how his marketing efforts affect sign-ups, how his onboarding affects user success, and how his product improvements affect churn. He has a clear view of his business's health.
| Month | Acquisition (New Users) | Activation Rate | Retention (Churn) |
|---|---|---|---|
| August | 210 | 45% | 8% |
| September | 350 | 55% | 5% |