What are the most common growth hacking metrics and KPIs?

Understanding your product and the key reasons people use it is essential to designing experiments that help you isolate cause and effect. A very famous example here is from Facebook where they discovered that people who added 7 friends in the first 10 days are the ones who are likely to retain. Very quickly, this metric became their north star. Basically, know your product inside out, experiment fast, fail quickly, get it right, and guide new users to their "aha" moments.

Why the North Star Metric Matters: ?? Focuses on value creation: The NSM emphasizes the key value your product provides, guiding teams to focus on actions that improve customer satisfaction and engagement. ?? Aligns the team: It helps align all departments—marketing, product, sales—around a common goal, ensuring everyone works toward the same objective. ?? Measures sustainable growth: Unlike vanity metrics (e.g., likes or page views), the NSM tracks meaningful growth that leads to long-term success.

This question should be answered. ‘If I’m your ideal customer, why should I buy from you and not someone else. (Flint McGlaughlin, Meclabs) The north star is to discover and live in your ideal customer’s world.

I think the current explanation lacks a core thing: The Team & Company. The North Star Metric is, if you ask me, principle that should unite and align all teams within a company. No matter where you work in the organization, your efforts should contribute to this North Star Metric, whatever it may be. Imagine it as the common goal that everyone in the company is working towards. Whether you're in marketing, product development, customer support, or any other department, your actions should be in harmony with this overarching objective.

The One Metric that the Company Chases for Growth is North Star Metric. The first step in conducting an experiment is to understand your objective. What are you trying to achieve and what specific problem are you trying to solve? Understanding your objective will help you to focus your experimentation efforts and determine what you want to measure. Once you have a clear understanding of your objective, the next step is to define a clear metric to track. This could be anything from the number of sign-ups, to the average time spent on your website, to the number of conversions. Having a clear metric to track will help you determine if your experiment is successful.

Acquisition valuations may vary by product/company. Sometimes it's worth having a higher CAC, because it pays off in LTV. Same thing for CPA. Spotify, for example, has non-paying users and paying users. Identifying what type of acquisition you want is essential, as this will guide you to how much you can pay for each customer, in addition to the entire construction of the acquisition strategy for these customers. One way to structure this is based on the SMART goal I want paying customers. I will make a comparison of last week's customers with the number of customers this week. I want to have 10% more paying customers by Q2, as that means X% MoM revenue

Why Acquisition Metrics Matter: ?? Track the efficiency of marketing campaigns: These metrics show how well your strategies are working to bring in new users, helping you optimize channels and spend. ?? Identify the best channels: By monitoring acquisition metrics, you can see which platforms or campaigns are driving the most traffic and conversions. ?? Measure growth potential: Understanding acquisition helps forecast future growth and scale your business by improving customer onboarding.

Click-Through Rate (CTR) and Cost Per Click (CPC) are valuable indicators in acquisition but not direct metrics. They influence Cost of Acquisition (CAC). CTR and CPC show initial engagement and costs but don't guarantee success. True acquisition metrics are Conversion Rate (CR) and Cost Per Acquisition (CPA), revealing how well you turn interest into actions. High CTR and low CPC can mask inefficiencies in CR and high CPA, harming acquisition. Focus on CR, CPA (and ROI or POI) as they directly impact growth and profitability.

This measures how effectively a business attracts new customers. Examples: 1. Social Media Challenges: The ALS Ice Bucket Challenge significantly increased donations through viral sharing. 2. Discount Codes for First-Time Users: Uber provides discounts to first-time riders who use a code shared by existing users. 3. Free Trials: Software like Adobe Creative Cloud allows free trials, enticing users to subscribe after trying. 4. User-Generated Content Contests:GoPro encourages users to share their action-packed videos for a chance to win prizes, drawing attention and new customers.

Time is an important measure of engagement also. Think of a session as a group of user interactions. With session length, it'll be the number of combined actions or interactions in one session. With duration, you are thinking more of the time the user spends on your product during a session. Users who spend more time on your product tend to engage more. If users log in, don't interact much, or quickly leave (bounce), there might be a hidden engagement issue and it's worth exploring strategies to solve this.

Why Activation Metrics Matter: ?? Showcase product value: Activation metrics help determine if users are quickly realizing the key benefits of your product, which is crucial for retention. ?? Optimize onboarding: Understanding where users drop off or engage, you can improve your onboarding process to ensure users have a smooth, engaging start. ?? Drive long-term success: Activation is a key predictor of customer retention and long-term value, as users who successfully activate are more likely to stick around.

Activation metrics are important to define how relevant your solution is. If users enter and stay for a short time, perhaps the solution was not what users expected. It is important to identify what makes users successful in the solution. On iFood there is an X number of orders, from then on, the user retains it. It is important to encourage customers to follow this journey from activation.

Activation Metrics helps me to Focus on how users first engage and stick with your product after sign-up. Activation Rate: An online course platform observes how many new sign-ups start their first lesson within 24 hours. Time to Activation: A project management app measures the average time it takes for a new user to create their first project. Churn Rate: A streaming service tracks how many users cancel their subscription within the first month. Retention Rate: A news app checks the percentage of users who return to read articles at least three times in their first week after download.

Why Revenue Metrics Matter: ?? Measure profitability: These metrics provide insights into how well the business is converting users into paying customers and generating sustainable income. ?? Evaluate business growth: Revenue metrics help track overall financial performance and growth, allowing businesses to forecast future earnings and scale. ?? Optimize pricing and monetization: Analyzing revenue, companies can fine-tune their pricing models and revenue streams for better profitability.

Some metrics are extremely important for different types of companies. On Spotify it can be weekly active users, paying users, MRR (monthly recurring revenue). The most important thing is to identify how many customers you have, how many you retained and how much you monetize from each cohort.

Here are some additional common growth hacking metrics I measure to validate the success are: Retention Metric: Measures how well you keep users/customers engaged and coming back for more, indicating the long-term value of your product or service. Referral Metric: Tracks the success of your referral program, showing how many new users or customers are acquired through word-of-mouth. Churn Rate: Indicates the percentage of customers who stop using your product or service over a specific period, highlighting retention challenges. Customer Lifetime Value (CLV): Calculates the total value a customer brings throughout their engagement with your business, helping to prioritize customer retention efforts.

Revenue Metrics help to track how your product or service earns money and assess financial health. Total Revenue: A coffee shop tallies monthly sales from coffee and pastries to gauge overall income. Average Revenue Per User (ARPU): A mobile game calculates the average spend of users per month on in-app purchases. Lifetime Value (LTV): A subscription-based fitness app estimates how much a subscriber is worth over their entire relationship with the app. Customer Acquisition Cost (CAC): A digital marketing agency measures the cost to acquire a new client through paid ads. Return on Investment (ROI): An e-commerce store assesses the profit from a social media campaign against the campaign's costs.

I believe that referral metrics need to be well tagged to identify new users from referrals. One way to measure this, with a view to reducing costs, is the CAC, which decreases by 50% if you capture another customer. One way to do this actively is for sellers to ask for referrals, and they become media.

This metric focuses on measuring the effectiveness of encouraging current users to bring in new ones. Referrals: A fitness app counts how many users have invited friends to join a workout challenge. Referral Rate: A cloud storage service calculates the percentage of users who use their "invite a friend" feature to share the service. Referral Conversion Rate: An online fashion retailer tracks the percentage of people who make a purchase after being referred by a friend. Viral Coefficient: A messaging app assesses how many new users, on average, are brought in by each existing user. Viral Cycle Time: A music streaming service measures the average time from when a user shares a referral link to when a new user signs up through that link.

Customer Acquisition vs. Retention: Balance between bringing in new customers and keeping existing ones happy. Over-focusing on acquisition without nurturing current customers can hurt long-term revenue potential.