Product Benchmarking for SaaS – What are the Numbers and How to Improve Yours


If you have ever wondered how to measure the success of your product then you might have heard about product benchmarking before. This is a method of measuring the performance of a product against other similar company’s products.

When you compare your product to those already out there, you can better understand where it stands. This is a great way to see if your product has growth potential.

If you want to know more about product performance benchmarking, and how to improve your numbers, then continue reading our article. Let’s dive deep in.


  • Product benchmarking is the process of tracking how your product performs against its competitors based on specific metrics or KPIs.
  • It enables you to identify ways to improve your product and make data-based business decisions.
  • To do product benchmarking accurately, you need to track metrics like product activation, feature adoption, product stickiness, and user retention.
  • Use product benchmarks to discover ways to improve your product and make it better.
  • You can improve your product KPIs by putting an emphasis on onboarding, focusing on user experience and UI, and replicating power users’ behaviors to convert less-engaged cohorts.
  • External benchmarks shouldn’t be the single source of truth for tracking your product’s performance. Ultimately, your biggest competitor should be your product’s past performance so you can improve it over time.

What is product benchmarking?

Product benchmarking is the process of comparing your product or service to others based on specific parameters called product benchmarks. It lets you know how your product matches the competition in its target market.

Benchmarking helps you understand what makes one product different from another and why your product should be considered as being superior.

Why do product benchmarks matter?

Product performance benchmarks exist because they help you identify ways to make your product better in a highly-competitive SaaS market. Specifically, product benchmarks;

  1. Provide an overview of the market and trends
  2. Help you to compare results from competitors in the same niche
  3. Empower you to make data-backed decisions

It provides an overview of the market and trends

Product benchmarking is a sure-fire way to stay up to date on ever-changing market trends. As your company compares performance against other companies, you will discover innovative ideas and strategies currently in vogue.

You’d also identify product performance gaps plus outdated features that need to be phased out from your SaaS product.

It helps you compare results from competitors in the same niche

Strategic benchmarking provides valuable insights into how your product compares to other products in your niche and where you have a competitive advantage.

Comparing results enables you to narrow your comparison to core metrics that impact your business processes, such as feature adoption rates, product engagement scores, and app retention rates.

It empowers you to make data-backed decisions

Product performance competitive benchmarking provides relevant data for strategic decision-making. This means that rather than making decisions on a whim, you have enough data that tells you what you need to do to move the needle for improved product performance.

For instance, if you notice your competitor’s prices are lower than yours, but their customers seem satisfied, it would be wise to focus some attention on excellent customer service. But, on the other hand, if you notice your competitors’ prices are higher than yours and their customer satisfaction levels are low, you can earn a competitive advantage by offering them free samples or discounts to encourage them to buy from you.

However, as much as you rely on external benchmarking to know if you’re on the right track, some things cannot be measured. For example, you can’t tie any number to product activation.

So, the most important thing to do is trust your numbers and use those for internal benchmarking since every product is different. Remember, the real competition should be with your own past performance.

We’ll cover this in a bit but for now, keep in mind that the activation point is different based on user and use case, and the path to get there is different. Therefore, relying entirely on an industry-standard that tells you whether or not you are getting enough users might not be the best way to go.

Which metrics should you analyze for product performance benchmarking?

For product performance benchmarking to be effective, a company needs to ensure it is effectively capturing product data and measuring the right metrics. The following are some of the different metrics to look at when conducting a product benchmarking study at any given period.

Product activation

Activation rate survey

Measuring product activation is like comparing apples to oranges. The major challenge here is that there are too many variables. And every business defines activation benchmarks differently, so it’s hard to narrow things to a specific metric.

For example, when asked how they define user activation in their products, many UserPilot survey participants gave generic answers like ‘installing JavaScript code” or “creating their first form,” while some didn’t know.

No activation definition

Notwithstanding, some events that can potentially pass as user activation signs include:

  1. When a user tries a key feature on your platform
  2. When a user pastes your code into their website
  3. When a user tries your service for the first time

Product stickiness

Product stickiness is a user engagement index that measures how many users return to a product regularly. Product leaders can use stickiness ratios to identify their product’s natural usage cycle and analyze patterns across different segments and personas. They can also keep an eye on changes in customer behavior over time.

These are the average product stickiness rates for SaaS, according to Mixpanel.

Image source: Mixpanel report

To determine your average product stickiness ratio, divide DAU by MAU and multiply the result by 100.

Product Stickiness Ratio = DAU/MAU * 100

Product stickiness for different niches

Product stickiness differs from one industry to another. For example, in SAAS, the average stickiness is 13% which means slightly less than four days of activity/month/use, while the median for the SaaS industry is 9.4%, implying less than three days of activity/per user per month.

It would be best if you didn’t rely on product stickiness in every case because it has a few shortcomings. Some of these include:

  1. The product stickiness ratio does not help you understand what users are churning or retaining.
  2. You would get a certain percentage of new users who may never return every day. This will increase MAUs relative to average DAUs, which will result in a lower than expected Product Stickiness Ratio.
  3. DAUs, MAUs, or DAU/MAUs may not give you an accurate picture of how your app is performing if it is not a high-frequency app. In such cases, it is better to use Customer Lifetime Value, monthly churn, and retention rates to measure your product’s success.

Feature adoption

Simply put, feature adoption is how users adopt features within your app. For example, a high feature adoption rate indicates that your users are happy with your app and are less likely to abandon your product. On the flip side, a low feature adoption rate means that users do not like your app’s features or are unwilling to pay for them.

Sow how do you calculate feature adoption rates? It’s not as easy as taking the total number of users who have adopted a particular feature and dividing it by the total number of users. To get valuable insights from your data, you need to track this metric across multiple levels such as:

  • Breadth and depth of adoption
  • The duration of the adoption
  • How long it took the users to adopt the feature is time to adopt

User retention

User retention refers to the rate users continue to use your product after their first trial. In other words, did a user come back to your app or website after performing an action the first time?

The most critical variable to consider when calculating user retention rate is the time frame. So for a weekly retention graph, you need to look at the percentage of returning users you have within that time window—not before or after it.

User retention graph

Tracking your user retention rate helps you know when to double down on new users acquisition. For example, users are almost as likely to abandon a SaaS app as they are to bail on a media and entertainment app after a week. The implication is that product and marketing teams in these industries must prioritize attracting new users.


NPS or Net Promoter Score is a customer loyalty metric that helps companies determine their overall brand health. It is measured by asking customers about the likelihood of them recommending it to friends, on a scale of 0-10 (with 10 being most likely).

Customers respond by choosing the option that best represents their response on the numerical scale. In the end, responses are grouped into three categories: promoters, detractors, and passives.

Average NPS by industry

The NPS metric ranges between -100 and 100. Your NPS metric will be negative when you have more detractors than promoters and positive when there are more promoters than detractors.

The NPS score varies across industries, so checking what the average is for your industry will give you insight into a good or bad score. However, you shouldn’t rely entirely on this average to gauge your relative performance.

How should you use product benchmarks?

Product performance benchmarks exist to help you discover new ways to make your product better and provide more value for users.

In the continuous improvement cycle, external benchmarking is a continuous process that includes measuring and comparing relative performance, discovering product improvement potentials, and identifying opportunities to boost your product’s performance.

How to improve your product KPIs

Here are several recommendations from us that will help you improve your product KPIs.

In short, you should

  • Focus on the onboarding process
  • Continuously drive feature adoption
  • Understand power users behavior and replicate it
  • Focus on user experience and strive for an easy-to-use UI

Now let’s go deeper.

Focus on onboarding

Improving onboarding is a top priority for SaaS business owners as it has a significant impact on user retention. Data from the State of SaaS onboarding 2021 shows that;

  • At least 96% of SaaS applications have one in-app onboarding element
  • 79% of B2B SaaS apps use a welcome screen
  • 74% of SaaS prioritize a frictionless signup flow
State of SaaS onboarding 2021

So how do you create a seamless onboarding flow for users? Here are the most important aspects to focus on:

  1. Personalize the in-app onboarding experience for each user by creating unique milestones for new users and planning for user mistakes.
  2. Use in-app videos to educate and guide users like knowledge base micro-videos.
  3. Use welcome screens to customize the onboarding flow for different users.
  4. Provide frictionless signup to give users a chance to go through the activation process at their own pace
  5. Use in-app onboarding UI elements like popups and slideouts.

Continuously drive feature discovery

Getting users to the activation point is just one piece of the puzzle. To drive real value for your product, you need to drive feature discovery continuously. This is where secondary onboarding comes into play.

User journey stages

Secondary onboarding is all about driving users to discover and engage with add-on app features and functionalities that will add value. Here, the goal isn’t about introducing all your users to your secondary features. Instead, it’s about making sure that users discover and adopt secondary features relevant to specific use cases.

A smart way to introduce users to secondary features is by making these features visible with in-app tooltips.

Postfity tooltips created with Userpilot

For instance, Postfity added an in-app tooltip to improve user retention for their social media scheduling tool.

Understand power users behavior and replicate it

Power users are your most loyal users—they are active, have the highest lifetime value, and generate significant ROI for your business.

Once you know your power users and their behaviors, you need to replicate their path to success to your least engaged users. Look at what parts of your product power users engage with the most, and then use checklists to drive your least engaged cohorts to these parts.

Backlinkmanager in-app checkist

For example, Backlinkmanager uses a secondary onboarding checklist to drive users to secondary product features that deliver value.

Focus on user experience and strive for an easy-to-use UI

A meaningful user experience and user interface create a positive experience for users and enable them to see the value of your product.

These days, users have numerous options, so they do not have the patience for complex apps with bad UIs. If they can’t find what they need on your app in time, it will lead to churn.

So how do you improve user experience and user interface for your SaaS product?

User experience can be improved with in-app messaging flows that guide users. Once your product delivers value and is easy to use by users, you can increase engagement and continuously communicate with users with in-app messaging.


The product benchmarking process can yield many benefits for SaaS companies. But to achieve this, you must pay attention to key metrics that track the right things and genuinely reflect how your measure against the competition.

Want to get started with product benchmarking? Get a Userpilot Demo and see how you can measure your product’s success.

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