A SaaS invoicing product serves about 18,000 small businesses on annual plans. Logins are up 15% year on year, but renewals fell from 82% to 74%. Sales says the product is loved; customer success says customers are quietly switching to a competitor bundled with their accounting software.
Design the metrics you would use to understand product health and predict renewal. Say which one you would report to the leadership team each month and why.
100 points, 60% to pass.
Logins are activity, not value — a customer can log in more because the product is harder to use. For an invoicing tool, value is invoices sent and paid through it. North star: share of active customers who sent and collected invoices through the product in the month, or payment value collected. Leading indicators of churn: declining invoice volume per customer, fewer seats in use, integrations disconnected, exports of data (a sign of migration). Segment by customer size and by whether they use the accounting integration. Guardrails: support tickets per customer and time to first invoice for new accounts. Report the leading indicator, because renewal itself arrives too late to act on.