A few years ago, I was running a beta test for a new feature an onboarding flow we thought would wow new users.
We launched.
Traffic looked good. Clicks were up. And I proudly shared in the weekly sync:
“We’ve seen a 28% increase in engagement!”
My CTO smiled politely and asked,
“Cool. But are users sticking around?”
I didn’t know.
I had fallen into the trap many PMs do measuring what’s easy instead of what matters.
That day, I learned a painful but valuable lesson:
Vanity metrics make you feel good. Outcome metrics make you better.
Let’s talk about the metrics every product manager should know, track, and act on not just to report progress, but to drive real product decisions.
First: Understand What You’re Trying to Measure
Not all metrics are created equal. Depending on where your product is in its lifecycle, your focus might shift. Here’s a simple way to break it down:
| Stage | Key Metric Focus |
|---|---|
| MVP / Early Stage | Activation, User Feedback, Retention |
| PMF Search | Retention, Engagement, Referral |
| Growth Stage | Conversion, Monetization, CAC:LTV |
| Mature Product | Efficiency, Expansion, Churn Reduction |
📌 Pro Tip: Pick 2–3 core metrics per stage. Obsess over them. The rest are just noise.
The “North Star” Metric
This is the one metric that best reflects the value your product delivers to users.
For Spotify, it might be “minutes of music played.”
For Duolingo, “lessons completed.”
For Airbnb, “nights booked.”
At one startup I worked with, our North Star was:
“Tasks completed per active user per week.”
Why? Because completed tasks were the proxy for actual value being delivered.
Choosing your North Star forces clarity:
- What are users really here for?
- What’s the habit or behavior we want to reinforce?
- What does success look like in their life, not just in our UI?
5 Categories of Metrics Every PM Should Know
Let’s break down the core metric families you should track and what questions they answer:
1. Activation Metrics
🧠 Are users getting to their “aha!” moment?
- Time to First Value (TTFV) – How long it takes for users to see real value
- Activation Rate – % of users who complete key first steps (e.g., profile setup, first post, first task)
🔍 Insight: If activation is low, your onboarding might need fixing or you’re solving the wrong problem.
2. Engagement Metrics
🔁 Are users coming back and using it regularly?
- DAU / WAU / MAU – Daily / Weekly / Monthly Active Users
- Stickiness – DAU/MAU ratio (e.g., 30% means users come back ~9 days/month)
- Session Duration / Depth of Use
🔍 Insight: More sessions ≠ more value. Understand why they engage.
3. Retention Metrics
🕓 Do users keep coming back over time?
- Week 1 / Week 4 Retention
- Cohort Retention Curves – Do users drop off quickly or gradually?
- Churn Rate – % of users who stop using or cancel
🔍 Insight: If your retention curve flattens and stays flat, you’re closer to product-market fit.
4. Conversion & Monetization Metrics
💰 Are you turning usage into business outcomes?
- Free → Paid Conversion Rate
- Average Revenue per User (ARPU)
- Customer Acquisition Cost (CAC)
- Customer Lifetime Value (LTV)
🔍 Insight: High conversion but low retention? You’re overselling. High retention but poor conversion? You’re underselling.
5. Referral & Virality Metrics
📣 Do users bring in other users?
- Net Promoter Score (NPS)
- Referral Rate – % of users inviting others
- K-Factor – How fast the user base is growing through virality
🔍 Insight: If people love your product but don’t refer it, you may need better sharing hooks.
The Danger of Chasing Metrics in Isolation
At one point, our team optimized heavily for daily active users. We ran campaigns, added notifications, gamified interactions.
DAU went up.
But so did churn and support tickets. Users were coming back but frustrated, confused, and overwhelmed.
Lesson: Good metrics are connected.
Optimizing one at the cost of another isn’t product growth it’s product manipulation.
Final Thoughts: Metrics Are Mirrors
Metrics won’t tell you what to do but they’ll show you what’s happening.
Your job as a PM is to:
- Frame the right questions
- Pick the metrics that answer them
- Translate those insights into action
The best PMs don’t just track numbers. They tell stories with data.
Stories about users. About friction. About magic moments. And how to deliver more of them.
So next time someone asks, “How’s the product doing?”
You won’t just talk about page views or downloads.
You’ll talk about value delivered, repeated, and shared.
And that’s what really matters.
product.guru 
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