If you want to improve anything in business, you have to measure it. That part everyone knows. But when it comes to finding product-market fit or fixing your website and product conversions, most founders aren’t even tracking the right metrics.

I just published a full YouTube video breaking this down with visuals and examples (including real YC startups). If you prefer watching instead of reading, you can see it here: Watch the full video on YouTube​

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Alright—let’s jump in.

In every SaaS product and every website, there are five key user actions that define the entire customer journey:

1. Visit
2. Signup
3. Activation
4. Upgrade
5. Retention (or the opposite: churn)

These form four conversion steps. And if just one of them is off… nothing else downstream matters.

Today, I want to walk you through:

• What you need to measure
• The real benchmarks
• The biggest reasons SaaS conversions break • And what to do about each one

Let’s go.

1. Visit → Signup (~2% benchmark)

Across B2B SaaS, the average visitor-to-signup rate is ~2%. If you’re below that, it’s almost always caused by one of these reasons:

Reason 1: Weak Value Proposition

This is conversion killer number one.

If someone lands on your website and the headline doesn’t immediately click—game over. They bounce. You don’t get a second chance.

Good example: “We help hotel groups turn missed calls into bookings.” It’s simple. Clear audience. Clear value.

Less good example: “The AI copilot that was promised.” Sounds cool… but promises nothing specific.

A strong value proposition makes a visitor say: “This is for me. I need this.”

Reason 2: No Trust-Building

People don’t sign up when they don’t believe you.

You need:

• Testimonials
• Reviews
• Case studies
• Screenshots of real results
• Social proof from companies your audience respects

Trust = conversions.

Reason 3: Too Much Friction in the Signup Form

Most founders overcomplicate this.

You don’t need nine form fields. You barely need three. And honestly? Social login works great.

Ask for the minimum. Earn the rest later.

Reason 4: Weak Call to Action (CTA → CTV)

A CTA should be a call to value.

Not: “Get started”, “Request access”.

But:

• “Receive test number”
• “Generate your first invoice”
• “Create your free AI post”

Tell users exactly what they’ll get.

Reason 5: Bad Design

Yeah, it’s number five. And as a designer, it hurts to put it here.

But it’s simple: If your site looks bad, people assume your product is bad.

Design = trust.
Copy = conversion.
You need both. But copy moves the numbers fastest.

2. Signup → Activation (~33% benchmark)

If fewer than 1 out of 3 users become active, you have a product problem—not a marketing problem.

The biggest activation killers:

Reason 1: Long Time to Value

The user signs up… …wanders around… …clicks a few random things… …feels lost… …leaves.

Your job is to get them to their first “aha” moment as fast as possible.

Examples:

• Newsletter app → send first email
• LinkedIn AI tool → create first post
• Warehouse sync tool → finish first sync

If you can’t define your “minimum value moment,” that’s the first problem.

Reason 2: Users Don’t Know Where to Start

A beautiful dashboard is useless if the first-time experience is confusing.

Founders and designers always assume users “get it.” They don’t.

Solve this with:

1. A simple onboarding flow
2. Clear first-step guidance
3. Just-in-time tooltips
4. One clear goal the user should achieve

Reason 3: Landing Page ≠ Product Reality

When your website promises the world…

And your product delivers… a small, half-working widget?

People churn instantly.

Your product and your website need to match. Expectations should be slightly exceeded, not destroyed.

Reason 4: Too Many Limitations on the Free Plan

Especially in AI tools.

If your trial or freemium plan is so restricted that people can’t actually experience the value…

They never adopt the product. And if they don’t adopt → they won’t pay.

Give them enough to fall in love. Not enough to stay forever.

3. Activation → Upgrade (~3% benchmark for freemium)

Freemium = more signups, lower upgrade rate Trial = fewer signups, higher upgrade rate

Most upgrade failures come from three issues:

Reason 1: No Continuous Value

They came for one task. They did it. They left.

If your product solves a one-time job, you need recurring value loops—something that brings them back daily, weekly, or monthly.

Reason 2: No Urgency

Human psychology: People hate losing something more than they love gaining something.

For trial products: Show a “trial ending soon” indicator. Email them reminders. Show them which features they’ll lose.

For freemium: Show the value they’re missing by not upgrading.

Reason 3: Low Investment (Poor Activation)

If users haven’t meaningfully adopted your product, they won’t pay for it.

Upgrades happen after users feel invested.

Activation drives revenue more than any pricing tweak.

4. Retention → Churn (~1% monthly benchmark)

If your churn is higher than ~1%/month (or 10%/year), these are the most common culprits:

Reason 1: You Didn’t Solve the Real Pain

It sounds harsh, but it’s true.

People churn because the product didn’t fix a painful enough problem or the problem wasn’t big enough in the first place.

Reason 2: They Found a Better Alternative

Self-explanatory.

The solution is the same: Keep improving your product. Create ongoing value. Reduce friction. Ship faster. Understand your users better.

5. What to Do Next

If you want to improve conversions, go into your analytics and check:

Visitor → Signup

Signup → Activation

Activation → Upgrade

Upgrade → Retention

Find the weak link. Improve that one first. Repeat.

If your signup rate is terrible but your activation looks good? Fix the website.

If your signup rate is fine but users don’t adopt? Fix onboarding and time-to-value.

If churn is high? Fix the product.

And if you haven’t set up tracking yet… do that today. You can’t improve what you can’t measure.