Product Analytics KPIs – best practices

What is a product analytics KPI?

They indicators showing how customers interact with your product. They are derived from measurements and often have a numeric component of time, ratio, rate, etc. Feature usage helps you track how a customer uses a given feature, which can provide insight into what part of your product provides the most value or is a critical action in the customer journey. And tracking whether users are repeatedly coming back to your product helps you understand whether your business is growing sustainably.

Customer Satisfaction Score (CSAT)

How happy are your customers?
A customer satisfaction KPI is a metric used by companies to score and track how happy their customers are with their service, product, and/or experience. The end goal is to determine factors affecting customer satisfaction and to pinpoint areas for improvement.

Net Promoter Score (NPS)

Net Promoter Score (NPS) is a customer loyalty and satisfaction measurement taken from asking customers how likely they are to recommend your product or service to others on a scale of 0-10—but there’s a lot more to the story than that.

Customer Acquisition Cost (CAC)

How long does it take to answer your customers?
It simply measures the time elapsed between a customer messaging support and an agent replying to it. In comparison, First Response Time, Average Reply Time includes any time a customer has to wait for a reply. It is not limited to First Touch. ART is usually a major source of dissatisfaction among customers. If you decide to track this metric, it can help you to make sure that customers aren’t kept waiting for long periods of time.
Marketing Success

Cost per Acquisition (CPA)

Are your customer acquisition costs viable?
Cost Per Acquisition, or “CPA,” is a metric that measures the total cost to acquire one paying customer. It should include the cost of marketing campaigns, or other any other costs spent  to get a new customer. This metric is usually calculated alongside the average customer lifetime value (CLV), return on investment, or cost per action. These three combined will let you know how well you’re doing with your marketing budget. This can also help you with various business decision-making.

Customer lifetime value (CLV)

Are your customers profitable?

Customer lifetime value is the total worth to a business of a customer over the whole period of their relationship. Pay attention to this metric, as it can show if it is better and cheaper to keep existing customers than it does to acquire new ones. You can drive growth if you’re increasing the value of your existing customers.

If you want to best calculate your CLV, look at the total average revenue generated by a customer and the total average profit. This provides insights into how customers interact with your business and if your overall marketing plan is working as expected.

For a more in-depth look, you may want to break down your company’s CLV by quartile or some other segmentation of customers. This can give greater insight into what’s working well with high-value customers, so you can work to replicate that success across your entire customer base. The higher your CLTV the better.

Product KPI

Customer Retention

Customer retention rate is the percentage of existing customers who remain customers after a given period. There’s a simple, economic reason why customer retention is so important: Keeping your existing customers is a lot less expensive than trying to win new ones. Loyal customers also contribute to your business’ health by providing referrals, promoting your brand on social media, and giving feedback to improve your product or service. So, it’s critical for companies to keep an eye on their customer retention rate.

New vs Current User Retention

Calculate if your current retention rate is higher than the retention rate of the new users. This might give you insights on how to change your customer strategy.

Customer Churn Rate

Customer churn, or customer turnover, refers to the number of customers you’re losing in a predetermined time period. Churn rate is a scary metric. It’s also an incredibly important one.

If you don’t know how many customers are leaving the business, then you won’t know how it’s impacting your revenue — and you won’t be able to create improvement plans to reduce the turnover rate.

Monthly recurring revenue (MRR)

Monthly Recurring Revenue, commonly abbreviated as “MRR” is all of your recurring revenue normalized into a monthly amount. It’s a metric usually used among subscription and SaaS companies.

It’s a way to average your various pricing plans and billing periods into a single, consistent number that you can track the trend of overtime.


User Interaction Metrics

  • New Trial Sign-Ups (SaaS)
    – how many customers signed for a trial in total
  •  Number of Times a User Logs In/Completes Set Up
    – how often your customers login
  • Freemium Customers (SaaS)
    – how many users signed up for your free product
  • Number of New Users
    – could be measured daily, weekly, monthly
  • User Base Growth
    – New Users as a % of your Total User Base
  • Number of Active Users
  •  Active Users as a % of Your Total User Base
  • Number of sessions per user
    -counts the average number of sessions initiated by each user or visitor to your website/application.
  •  Active Users as a % of Your Total User Base
  • Daily Active User/Monthly Active User ratio
    – DAU/MAU Ratio (Daily Active Users to Monthly Active Users ratio) measures how active monthly users are on a daily basis. In other words, this engagement metric measures the number of days in each month that users performed an activity that qualifies them as active users. A higher DAU/MAU Ratio generally indicates high stickiness, meaning users consistently return to the app.
  • Number of user actions per session
  • – Measure the critical actions that your users perform by session. What percentage of your new users completes those actions? How many times do they happen from the start to an end of a session?
  • Bounce rate
    – Bounce Rate is defined as the percentage of visitors that leave a webpage without taking an action, such as clicking on a link, filling out a form, or making a purchase.
  • Traffic (paid/organic)
    – Organic traffic is website visitors that were referred by the organic, or unpaid, results of search engines, principally Google. Paid traffic is website visitors that were referred by paid campaigns such as Google AdWords, Microsoft Ads, or Facebook Ads.
  • Session duration
    – ‘Average session duration’ is a metric that measures the average length of sessions on your website. Google Analytics begins counting a session from the moment a user lands on your site, and continues counting until the session ends (i.e. the user exits the site or is inactive for a predetermined amount of time).
  • Number of Key User Actions Per Session*
    – Define the key actions of user pers session and track them