Traditional SaaS metrics (ARR, churn, NPS) poorly capture embedding depth. Here are five supplementary measures that reveal true entanglement.
1. Integration Density
Number of active integrations per account. Direct proxy for switching cost.
2. Cross-Functional Penetration
Number of distinct departments with active users. Multi-department usage = infrastructure status.
3. Workflow Criticality Score
Percentage of business processes that require your system to complete. Mandatory checkpoints = Level 2 embedding.
4. Data Gravity Index
Percentage of organizational data queries that originate from or pass through your system. Query patterns reveal actual dependency.
5. API Calls Per Core Action
How many downstream systems are notified/updated when a primary action occurs in your system. Ripple effects = embedding depth.
Traditional vs Embedding Metrics:
NRR, Churn, NPS poorly capture depth. Integration Density, Data Gravity, and API Ripples reveal true dependency.
The Measurement Principle:
Traditional SaaS metrics measure satisfaction. Embedding metrics measure structural dependency. Track both — but know which predicts durability.
This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.
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