๐Ÿ“— Metrics Cheatsheet

Sometimes we get stuck when we try to find a metric for the goal we are trying to achieve, or the question we are trying to answer. Therefore, inspiration can be very helpful to simply get unstuck in the mind-journey to find the right metric.

Therefore, here's a comprehensive table listing the most common metrics for activation, engagement, retention, monetization, and referral across various product types:

Metrics for different product types

Most Common and Important Business Metrics

Below are the most common and important business metrics that apply across various product types:

  1. Customer Lifetime Value (CLTV):

    • Estimates the total revenue a business can expect from a single customer account over the course of the relationship.

  2. Monthly Recurring Revenue (MRR) / Annual Recurring Revenue (ARR):

    • MRR/ARR represents the predictable and recurring revenue generated from subscriptions or contracts on a monthly/annual basis.

  3. Churn Rate:

    • The percentage of customers who stop using the product or service over a specified period. This is crucial for understanding retention.

  4. Gross Margin:

    • The difference between revenue and the cost of goods sold (COGS), representing the profitability of the product.

  5. Net Promoter Score (NPS):

    • Measures customer satisfaction and loyalty by asking how likely customers are to recommend the product to others.

  6. Customer Acquisition Cost (CAC):

    • The cost associated with acquiring a new customer, including marketing and sales expenses.

  7. Conversion Rate:

    • The percentage of users who complete a desired action, such as making a purchase, signing up for a service, or subscribing.

  8. Average Revenue Per User (ARPU):

    • The average amount of revenue generated per user or customer, often used to assess the financial health of subscription-based businesses.

  9. Retention Rate:

    • The percentage of customers who continue using the product over a specific time period, indicating the product's ability to maintain its user base.

  10. Profit Margin:

    • The percentage of revenue that exceeds the total costs, indicating the financial efficiency of the business.

Again, this list serves as inspiration. The metric you'll pick depends in the end on the goal you are trying to achieve or the question you want to answer.