14 product-led growth metrics you should be tracking
Mastering product-led growth metrics is essential for SaaS success. Learn the top 14 metrics to track, why they matter, and how to improve them.
When it comes to tracking how your product is performing, you can’t rely on hunches.
It’s about looking at the right data to make decisions that have true business impact.
That’s why tracking product-led metrics is so important to keep your SaaS product healthy and to make sure your key business metrics (revenue, profit margins) are growing, too.
Here’s what we’ll go over in this article:
- What are product-led growth metrics?
- Why is it important to track them?
- A list of the top PLG metrics you should track
Let’s get started.
What are product-led growth metrics?
Product-led growth (PLG) metrics are data points that measure how well your product is performing and how healthy your business is from a customer-focused perspective.
Unlike traditional sales-driven metrics, PLG metrics track how people interact with your product, revealing trends in user adoption, satisfaction, and growth potential.
Here's why they're important:
- Understanding user experience: Metrics reveal if users are quickly finding value, what parts of your product are most successful, and any pain points that need attention.
- Data-driven decisions: By tracking how changes to your product impact user behavior, you can make informed choices about where to invest time and resources.
- Demonstrating growth: Hard data on user engagement, retention, and expansion revenue are compelling for investors and stakeholders.
Top PLG metrics you should be tracking
#1 Net revenue retention (NNR)
What is it?
Net revenue retention (NRR) tells you how much revenue you're keeping from existing customers, factoring in upgrades, downgrades, and churn. Think of it as the opposite of net revenue churn.
It's often expressed as a percentage, where a number over 100% means your MRR is growing from your current customer base.
Why should you track it?
- Focus on customer success: NRR reveals whether your existing customers are finding increasing value in your product over time. It encourages you to focus on customer satisfaction and delivering ongoing results.
- It highlights the power of expansion: A high NRR can be a major driver of growth. Even a small percentage increase can have a compounding effect on your revenue over time.
- Sustainability: NRR is a key indicator of long-term business health. If you're successfully retaining and growing the value of your customers, this creates a foundation for sustainable success.
How to calculate it:
NRR (%) = [(Starting Monthly Recurring Revenue + Expansion Monthly Recurring Revenue - Churn Monthly Recurring Revenue) / Starting Monthly Recurring Revenue] * 100
#2 Average revenue per user (ARPU)
What is it?
Think of ARPU as the average amount of money you make from each individual customer. It's a simple idea, but a powerful one: The higher your ARPU, the healthier your business.
It's particularly valuable for subscription-based products where revenue comes in recurring amounts.
Why should you track it?
- Understand your customers' value: ARPU gives you a high-level picture of how valuable your product is to your user base. Is that value increasing over time? This metric helps you find out.
- Spot trends and make pricing decisions: If your ARPU is going up, it could be a sign to explore higher pricing tiers or offer premium features. If it's going down, you might need to adjust your pricing model or find ways to deliver more value.
- Track growth: ARPU can show the impact of marketing efforts, changes in features, and more. It reveals whether your strategies are making each customer more profitable over time.
How to calculate it:
ARPU = Total MRR / Total number of customers.
#3 Expansion revenue
What is it?
Expansion revenue is the money you generate from existing customers after their initial purchase. It comes from things like upsells (convincing them to upgrade to a higher pricing tier), cross-sells (selling them additional features or products), and add-ons.
Why should you track it?
- It's often cheaper than acquiring new customers: Focusing on expansion revenue means getting more value out of the customers you already have, which can be more cost-effective than constantly chasing new leads.
- It shows you how well your product is doing: If your customers are willing to spend more, it's a strong sign that they're happy with your product and finding it increasingly valuable.
- It drives growth: A healthy expansion revenue stream can fuel your business without the constant need for massive new customer acquisition.
How to calculate it:
Expansion revenue = Total revenue from upsells, cross-sells, add-ons, and reactivations (optional) for a specific period.
#4 Retention rate
What is it?
Retention rate tells you what percentage of your customers stick around over a certain period of time. Think of it like measuring how "sticky" your product is — are people finding enough value to continue using it and paying for it?
Why should you track it?
- It's way cheaper to keep customers than get new ones: Happy customers keep paying, and they often tell their friends too. Focusing on retention is one of the smartest ways to grow long-term.
- Reveals problems early: A sudden drop in retention is a red flag that something is wrong with your product or customer experience. Tracking this closely allows you to address issues before they cause major churn.
- Measures the impact of changes: Did that new feature boost customer loyalty, or were people unimpressed? Your retention rate will show you. It's essential to know what works (and what doesn't).
How to calculate it:
Retention rate (%) = ((Number of customers at the end of the period - Number of new customers acquired during the period) / Number of customers at the start of the period) * 100.
#5 Time to value (TTV)
What is it?
Time to value (TTV) measures how long it takes for new users to get that first "aha!" moment when they realize the real value of your product. In product-led growth, it's crucial to get this TTV as short as possible.
Why should you track it?
- It reveals user experience pain points: If your TTV is long, it's a clear sign that people are struggling to understand or get the most out of your product. This can lead to them giving up before ever becoming fans.
- It helps you prioritize onboarding: By tracking your TTV, you understand which steps in the initial user experience are creating the biggest impact on value discovery. This lets you focus on making those steps as smooth as possible.
- It drives conversion: People who quickly "get" your product are far more likely to become paying customers. Focusing on lowering your TTV can boost conversion rates and grow your bottom line.
How to calculate it:
The trick here is that there's no single TTV formula. You'll need to define what "value" means for your specific product — it could be something like completing a certain task, using a core feature, or reaching a specific usage milestone.
Once you know what that is, you can track the time it takes new users to reach it.
Example: If your product is a project management tool, your TTV might be measured by the time it takes a new user to create their first project and add tasks.
#6 Product-qualified leads (PQLs)
What is it?
PQLs are users who have actively shown they're ready to potentially become paying customers. They aren't just browsing — they've taken specific actions within your product that indicate strong interest.
This could be signing up for a free trial, using a key feature, or even attending a product demo. PQLs are the warmest leads you can get.
Why should you track it?
- They simplify sales: PQLs help your sales team focus on the most promising leads, saving time and effort. This leads to a smoother path to purchase for your potential customers.
- They reveal product strengths: Tracking the actions that qualify a user as a PQL tells you what parts of your product are most compelling to high-value customers.
- They measure the effectiveness of your onboarding: If your PQL numbers are low, it might be a sign that you need to improve your free trial experience or make it easier for users to discover valuable features.
How to calculate it:
There's no one-size-fits-all formula for PQLs. You'll need to decide which user actions signify real potential based on your specific product and business model.
It's helpful to look at the behavior of your existing paying customers to see what they did leading up to their purchase. This will give you a good starting point for defining your PQL criteria.
#7 Feature adoption rate
What is it?
Feature adoption rate measures how many of your users are actually using a specific feature of your product. It's usually expressed as a percentage. A high adoption rate means that a feature is popular and provides real value, while a low rate could be a warning sign.
Why should you track it?
- It reveals what your users truly value: Do people flock to the fancy new feature you spent months building? Or is there an older, simpler tool that's still the most beloved? This is one of the product-led growth metrics that helps you answer these questions.
- It guides product development: Feature adoption data empowers you to make informed decisions about where to invest resources. Should you prioritize enhancing popular features, or troubleshoot ones that are being overlooked?
- It exposes onboarding issues: If a key feature has a low adoption rate, that might mean new users are struggling to understand it or find it in your interface.
How to calculate it:
Feature adoption rate (%) = (Number of users who used the feature / Total number of active users) * 100.
#8 Customer lifetime value (LTV)
What is it?
Customer lifetime value (LTV) predicts the total amount of revenue you can expect from a single customer throughout their entire relationship with your company. It's not just about their first purchase, but the potential value they bring over months or even years.
Why should you track it?
- It helps you understand customer acquisition costs (CAC): Knowing your LTV lets you determine how much it's actually worth spending to acquire a new customer. Ideally, your LTV should be significantly higher than your CAC.
- It informs resource allocation: LTV insights can guide how much you invest in customer support, retention efforts, and product features. Customers with a high LTV deserve more attention.
- It reveals your most valuable customer segments: By analyzing LTV across different groups of customers, you can spot patterns and tailor your strategies for maximum growth.
How to calculate it:
LTV = (Average revenue per customer * Customer lifespan) - Cost of acquisition and maintenance.
#9 Net revenue churn
What is it?
Net revenue churn measures the amount of money you lose from customers canceling or downgrading their subscriptions. However, unlike basic churn, it also factors in your new and expansion revenue.
This gives you a more complete picture of customer retention and how it impacts your financial health.
Why should you track it?
- It reveals the big picture of retention: Net revenue churn helps you understand if you're truly retaining customers, even if some are leaving. For instance, your expansion revenue from existing customers might be high enough to offset a moderate churn rate.
- It highlights the importance of expansion revenue: A focus on reducing churn is important, but net revenue churn shows you the power of growing revenue from your existing customer base as a parallel strategy.
- A negative net churn rate is a great sign: If your expansion revenue outpaces your losses, you'll end up with a negative churn rate. This means your business is growing even without acquiring brand-new customers.
How to calculate it:
Net revenue churn (%) = (Churned Monthly Recurring Revenue – Expansion Monthly Recurring Revenue) / Starting Monthly Recurring Revenue) * 100.
#10 Customer satisfaction score (CSAT)
What is it?
CSAT is one of the PLG metrics that directly measures how happy your customers are with your product or service. Typically, it's gathered through surveys where users rate their satisfaction on a simple scale (1-5 or similar). It provides a snapshot of customer sentiment at a given point in time.
Why should you track it?
- It's a window into the customer experience: CSAT helps you see your product through your customers' eyes. It can quickly surface issues, whether it's a confusing part of your onboarding or a specific feature that customers dislike.
- It predicts future behavior: Happy customers are far more likely to stick with you, become advocates, and potentially even spend more. Unhappy customers are at higher risk of churn. CSAT works as an early warning system.
- It complements quantitative metrics: Numbers like churn rate or TTV tell you what is happening, while CSAT can start to reveal why it's happening.
How to calculate it:
Add up the number of positive responses to your survey (usually those who rate their satisfaction as a 4 or 5 on a 5-point scale). Divide that number by the total number of survey responses and multiply by 100 to calculate your CSAT percentage.
Formula:
CSAT (%) = (Number of positive responses / Total number of responses) * 100.
#11 Virality
What is it?
Virality is the holy grail of product growth metrics. It means that your product is so good and so sharable that your existing customers actively bring in new customers for you.
This can happen through word-of-mouth recommendations, social media buzz, or features that directly encourage users to invite their network.
Why should you track it?
- Exponential growth potential: When a product goes viral, it can grow at a truly explosive rate. Virality can dramatically lower your customer acquisition costs.
- Reveals your product's "wow" factor: A viral product isn't just useful — it's something people get genuinely excited about. Tracking virality helps you understand what makes your product truly special.
- Identifies opportunities for improvement: Tracking virality can show you exactly where in the user journey people are most likely to share, letting you double down on those moments or encourage sharing earlier in the experience.
How to calculate it:
The most common way to track virality focuses on the viral coefficient, or k-factor. This measures the average number of new users each existing user brings in. A k-factor greater than 1 indicates viral growth.
Formula:
k-factor = number of invitations sent by each customer * % conversion rate of each invite.
#12 Network effects
What is it?
Network effects mean that your product becomes more valuable to each user as more people use it. Think of social networks — they're pretty useless with only a few members, but extremely powerful when they reach a huge scale.
Why should you track it?
- Long-term defense: Network effects create a natural barrier to entry for competitors. Once you achieve a critical mass of users, it becomes very hard for someone else to offer something equally valuable.
- Virality potential: Network effects can fuel viral growth as new users are drawn in by the existing network's value.
- Understanding value creation: Tracking network effects helps you see how the size and engagement of your user base directly impact the core value your product provides.
How to calculate it:
There's no single formula for measuring network effects. It's a more qualitative concept than some other metrics. Here's what to look at:
- User growth and engagement: A large and growing user base is a prerequisite for strong network effects. Track how active your users are and whether their engagement correlates with network size.
- Features that rely on others: Does your product have features that become more useful with more participants (think marketplaces, communication tools, etc.)?
- Customer feedback: Ask your users directly whether the value of your product increases for them as the network grows.
#13 Activation rate
What is it?
The activation rate measures the percentage of new users who reach the "aha moment" — the point where they experience the core value of your product.
This “activation event” needs to be clearly defined for your product (it could be completing a certain task, using a specific feature, or reaching a usage milestone).
Why should you track it?
- Onboarding health check: A low activation rate is a clear signal that your onboarding process isn't effective. Users are failing to understand your product's value quickly.
- Prioritizing improvements: By tracking which steps new users take on their journey to activation, you can identify where they struggle and focus on improvements.
- Conversion booster: Users who reach the activation point are far more likely to become paying, engaged customers. Increasing your activation rate has a direct impact on your bottom line.
How to calculate it:
Activation rate (%) = (Number of users who reached the activation event / Total number of new signups) * 100.
#14 Churn rate
What is it?
Churn rate measures the percentage of customers who cancel or don't renew their subscriptions within a given time period. It's a direct indicator of customer attrition, revealing how many users you're losing over time.
Why should you track it?
- Understand customer retention: Churn rate is a fundamental pillar of your business health. High churn suggests problems with product fit, customer experience, or pricing.
- Assess the impact of changes: By tracking churn before and after product updates, pricing adjustments, or marketing campaigns, you can see if your changes are helping or hurting retention.
- Project financial health: Churn has a direct impact on your revenue. Reducing churn can significantly boost your growth trajectory.
How to calculate it:
Churn rate (%) = (Customers churned during a period / Customers at the start of the period) * 100.
Frequently asked questions
How do you measure product growth rate?
Product-led growth focuses on metrics that track recurring revenue, customer growth, and expansion. Key metrics include Monthly Recurring Revenue (MRR) growth rate, customer growth rate, and expansion MRR from existing customers.
What is the product-led growth model?
The product-led growth model centers around providing value to users as quickly as possible. This is often done through free trials or freemium plans, letting users experience the product's benefits before committing to a purchase.
What is the conversion rate for product-led growth?
There's no single "standard" conversion rate for product-led growth. It varies based on factors like your industry, product type, and pricing model.
What are the pillars of product-led growth?
The core pillars of product-led growth are delivering a great user experience (with a focus on rapid value delivery), making decisions based on product metrics data, and keeping the customer's needs central to your strategy.
Next steps with Eppo
You now understand the critical role of tracking product-led growth metrics to guide your business.
But how do you efficiently gather, analyze, and act on this valuable data?
This is where Eppo, an experimentation and feature management platform, helps you measure product changes' impact on your core PLG metrics.
Interpret results with accurate data you can trust
Eppo is data warehouse-native, which means it centralizes product-led growth metrics in a unified single source of truth. Track crucial indicators like:
- Net revenue retention (NNR): Measure your ability to retain existing customers and grow their value over time.
- Average revenue per user (ARPU): Monitor the average revenue generated per user, helping you identify upsell and optimization opportunities.
- Retention rate: Track how effectively you are retaining users and identify factors that contribute to churn.
Experiment quickly and with unparalleled precision
Eppo's intuitive interface lets you design and execute experiments focused on your core PLG metrics.
- Randomized assignments: Unbiased results eliminate the risk of self-selection or other factors that could skew outcomes.
- CUPED++ acceleration: Reach statistical significance faster, reducing experiment duration and freeing up resources to test more ideas.
- Continuous monitoring: Automated alerts for traffic imbalances, data quality issues, and more keep your experiments healthy and trustworthy.
Eppo helps you track and also run tests with key PLG metrics to help you boost the numbers that truly matter: Your revenue, profit margins, and customer retention.
Mastering product-led growth metrics is essential for SaaS success. Learn the top 14 metrics to track, why they matter, and how to improve them.
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