Product-Led Growth Metrics

ACV is the average annualized revenue per customer contract. If you compare Annual Contract Value to Customer Acquisition Cost, you can see how long it takes to pay back the cost of acquiring a customer.

ARR is your monthly recurring revenue (MRR) annualized. It is a prediction of how much revenue your company will generate annually based on your current MRR.

ACL is the average length of a customer contract. To surface it you need to add the total number of contracts in months, you will then divide by the entire number of contracts to get your average contract length figure.

ARPU is the average amount of revenue you earn from each of your active customers monthly. Notice that ARPU is calculated based on active customers, not total users.

Churn MRR is the percentage of revenue lost during a given period (usually monthly). It includes revenue lost from cancelled customers, downgrades, and other lost monthly revenue.

This metric measures the percentage of churn for different customer segments, such as new customers, long-term customers, or customers with a specific plan or feature. It helps companies identify the segments that are more likely to churn and take appropriate measures to prevent churn.

CMRR is the value of the recurring portion of subscription revenue. For term-based subscription businesses, this is the portion of subscription revenue that is recognized each month.

Customer go through various milestones and stages in the funnel. The conversion rate is the percentage of users who go from one stage to the next. Divide the number of users in the current stage by the total number of users in the previous stage.

CAC is the amount of money you spend to acquire a new customer. To calculate CAC, divide all the expenses to acquire customers by the total number of customers acquired over a certain period of time.

This metric measures the percentage of customers who have canceled their subscription or not renewed their contract over a specific period. Customer churn rate = (number of customers lost during a period / total number of customers at the beginning of the period) x 100.

CLV is an estimate of how much revenue will be generated from an average customer before churn. It is calculated by dividing the average monthly MRR per customer with User Churn Rate.

DAA are the number of users who open your product every day. Once you define what an active user is, you just need to measure how many number of them meet that threshold on a daily basis to determine your DAA.

DAU are the number of users who open your product every day. Once you define what an active user is, you just need to measure how many people meet that threshold on a daily basis to determine your DAU.

This is the percentage of users who use a particular product features. To get feature usage over a certain period of time, divide the number of users who used a feature by the total number of users.

This metric measures the total percentage of customers who have canceled their subscription or not renewed their contract over a specific period, including both voluntary and involuntary churn.

License utilization is the ratio of active-users in an account and the total number of licenses purchased. It is an important metric for solutions that offer a seat-based pricing model.

MAA are the number of accounts who open your product in a month. Once you define what an active account is, you just need to measure how many number of them meet that threshold on a monthly basis to determine your MAA.

MAU are the number of users who open your product in a month. Once you define what an active user is, you just need to measure how many people meet that threshold on a monthly basis to determine your MAU.

MRR is the amount of revenue you get from your customers on a monthly basis. The basic calculation for MRR is simple. You just add up all the revenue you get from your active customers.

This metric measures the percentage change in the number of customers over a specific period, taking into account new customers acquired and lost customers. Net churn = (lost customers - gained customers) / total customers.

NPS shows how likely customers are to recommend your product. NPS is calculated by first surveying customers on how likely (1-10) they are to recommend the product. You then subtract the percentage of detractors from the promoters’.

New Monthly Recurring Revenue is a metric that focuses of the revenue gained from new customers.

New customer growth is the number of new customers a company acquires. NCGR is measured by taking the difference in customers from one period to the previous one, then dividing by the number of customers in the previous period.

This measures how often users use the product in a given period of time. It gives insights into stickiness. If the number of active users or number of sessions is low, then the product is not capturing user needs.

Retention rate is the percentage of customers active in a given period who are still customers in the next. To get it, divide your number of active users across a period by the number of users in the previous period.

This metric measures the percentage of revenue lost due to customer churn over a specific period. Revenue churn rate = (revenue lost due to churn during a period / total revenue at the beginning of the period) x 100.

It measures how long a user typically uses a product at a time. To get it, calculate the session length for all sessions by subtracting the start time from the end time. Then take the average within each period.

This metric measures the average time it takes for a customer to churn from the date of their subscription. It helps companies identify the customers who are more likely to churn and take appropriate measures to prevent churn.

Time to Value (TTV) is the amount of time it takes a new customer to experience value from your product.

TCV is the lifetime value of a contract. It shows how much your business can expect to earn from a customer once contract is signed. You need to multiply the MRR with the contract term length.

WAA are the number of users who connect to your product in a week. Once you define what an active user is, you just need to measure how many number of them meet that threshold on a weekly basis to determine your WAA.

WAU are the number of users who connect to your product in a week. Once you define what an active user is, you just need to measure how many people meet that threshold on a weekly basis to determine your WAU.