Types of Metrics 📊

Metrics come in various shapes and sizes, each providing a unique lens to evaluate the performance of your product. Understanding the types of metrics can help you measure success more effectively and focus on the ones that truly matter.

Categories of Metrics

  1. Usage Metrics
    • Track how users interact with your product.
    • Examples:
      • Daily Active Users (DAU)
      • Monthly Active Users (MAU)
      • Session Length
  2. Engagement Metrics
    • Measure how actively users engage with your product.
    • Examples:
      • Retention Rate
      • Frequency of Use
  3. Acquisition Metrics
    • Reflect how effectively you’re acquiring new users.
    • Examples:
      • Conversion Rate
      • Cost per Acquisition (CPA)
      • Marketing Qualified Leads (MQL)
  4. Retention Metrics
    • Show how well your product retains its users over time.
    • Examples:
      • Cohort Retention: Analyze how groups of users behave over time after onboarding.
      • Net Promoter Score (NPS): Measures customer satisfaction and likelihood to recommend.
      • Churn Rate: The percentage of users who stop using the product over a specific period. A high churn rate indicates retention challenges and requires investigation.
  5. Financial Metrics
    • Evaluate the financial performance of your product.
    • Examples:
      • Customer Lifetime Value (CLTV)
      • Revenue Growth Rate
      • Average Revenue per User (ARPU)

Choosing the Right Metrics

Selecting the right metrics depends on the stage of your product and your business goals.

  • Early-Stage Products: Focus on acquisition and engagement.
  • Growth-Stage Products: Prioritize retention and revenue.
  • Mature Products: Track profitability and user satisfaction.

Pitfalls to Avoid

  • Overloading with Metrics: Tracking too many metrics can dilute focus. Stick to a few meaningful ones.
  • Vanity Metrics: Avoid metrics that look good but don’t drive actionable insights (e.g., app downloads without understanding usage).
  • Isolated Metrics: Always look at metrics in context. A spike in DAU might not be positive if churn also increases.

Joke: “If your churn rate is higher than your engagement rate, congratulations—you’ve created a revolving door app.” đŸšȘ

Conclusion

Different types of metrics provide diverse perspectives on your product’s success. By categorizing and prioritizing metrics, you can make data-driven decisions that align with your business objectives.

👈 Previous: Defining Success Metrics Next: Applying Metrics in Decision-Making 👉