The KPIs Every Digital Product Leader Should Track
In the digital economy, data is your compass. Key Performance Indicators (KPIs) are more than just metrics: they tell the story of how your product resonates with users and drives business outcomes. During my career, I’ve seen many times how the right KPIs can transform strategy into measurable success.
Nowadays, one might assume that using various KPIs is common knowledge for every Product Owner – but since that doesn’t seem to be the case, here’s a quick roundtrip: In this article, I’ll first explore why KPIs matter from different business perspectives and then provide an overview of essential and lesser-known KPIs to help you build a data-driven approach.
Why KPIs Matter: A View from Different Business Perspectives
First of all: KPIs are not one-size-fits-all; their relevance depends on your business goals, product type, and growth stage. Whether you’re managing a game with online connectivity, a SaaS tool, or an e-commerce platform, understanding KPIs from specific viewpoints helps align your team and prioritize effectively. Here are the key perspectives I’ve focused on across my career, along with why tracking the right metrics in each area is critical.
- User Acquisition and Growth Perspective: From a marketing and growth standpoint, KPIs help you understand how effectively you’re attracting users and at what cost. Metrics in this area reveal whether your campaigns and efforts are reaching the right audience and if your acquisition strategies are sustainable. Without this focus, you risk burning budget on ineffective channels or missing scalable opportunities.
But as I never tire of pointing out, don’t even start investing in growth until you’ve got your retention metrics under control: - Engagement and Retention Perspective: For product managers and UX designers, engagement and retention KPIs are the heartbeat of user satisfaction. They indicate whether users find value in your product and return over time. Crucially, high engagement often correlates with loyalty, reducing the need for constant acquisition.
- Monetization Perspective: From a revenue and business development angle, monetization KPIs measure whether your product is financially viable. They help assess how well your pricing, in-app purchases, or subscription models convert users into revenue, ensuring long-term profitability. Crucial not only for keeping your digital product alive, but also for making these important decisions about when to start investing in growth.
- Product Design and Experience Perspective: For developers and designers, especially in gaming but also for SaaS, KPIs around user progression and behavior in the product are invaluable. They highlight where users struggle or excel, guiding feature iterations and ensuring a seamless experience that keeps users hooked.
- Quality and Technical Performance Perspective: I can’t overstate the importance of operational KPIs. Technical performance metrics ensure your product is reliable and frustration-free. Downtime or crashes can erode trust instantly, making this a non-negotiable area for any digital product.
KPIs must align with your business priorities. A startup might emphasize acquisition and engagement to build a user base, while a mature product might focus on monetization and quality to sustain growth. Tailoring your focus to these perspectives ensures you’re measuring what matters most.
An Overview of Important (and Lesser-Known) KPIs
Now that we’ve covered why KPIs are critical from various viewpoints, let’s explore a comprehensive list of metrics to track. This includes both widely recognized KPIs and some lesser-known ones that can offer deeper insights, particularly in gaming and online applications. I’ve categorized them to align with the perspectives above, drawing from industry standards and practical experience.
1. Growth & User Acquisition Metrics: Are You Reaching the Right Audience?
Every digital product starts with getting users in the door. But it’s not just about quantity – it’s about quality. Here are some interesting KPIs to track:
- Daily Active Users (DAU): This fundamental metric measures the unique number of users engaging with your product on a specific day. Tracking DAU provides the most immediate pulse on product activity and the success of short-term initiatives like marketing campaigns, content drops, or in-game events. While MAU (below) shows long-term growth trends, DAU reflects daily health and helps identify immediate dips or spikes in usage.
- Monthly Active Users (MAU): This tells you how many unique users engage with your product over a month. Growth in MAU signals that your acquisition strategies are working, but don’t stop there—dig into where these users come from to double down on high-performing channels, a key focus in marketing analytics for games.
- Customer Acquisition Cost (CAC) or Cost Per Acquisition (CPA): Measures the cost to acquire each user, crucial for evaluating marketing efficiency.While CAC focuses on the cost to acquire a paying customer, CPA measures the cost to acquire a lead, such as a registration or free trial sign-up. Tracking both allows businesses to understand costs at different stages of the customer journey. Monitoring CAC is essential for evaluating the scalability of business strategies and planning sustainable growth. A rising CPA might indicate market saturation or increased competition, signaling the need to explore new channels or optimize existing ones.
- (Lesser-Known) Social Sharing Rate: Measures the percentage of users sharing content from your product or app on social media platforms, indicating organic growth potential through user advocacy and viral reach. High sharing frequency can drive traffic to your website or landing pages, expanding your audience without additional acquisition costs, and signals effective content or features that resonate with users.
As Social Sharing doesn’t just “happen” this metric is also of interest from the Engagement or Product Design viewpoint: For instance, seamless sharing buttons or compelling in-app content can boost this rate, reflecting both design success and growth impact. This metric is crucial for understanding how social interactions fuel user acquisition, helping optimize campaigns and features to maximize organic expansion in a cost-effective way.
2. Engagement Metrics: Are Users Sticking Around?
Getting users is one thing; keeping them is another. Engagement KPIs reveal how much value users derive from your product.
- Daily Active Users (DAU) to Monthly Active Users (MAU) Ratio: Often called the “Stickiness” ratio, a higher DAU/MAU means users return frequently. For example, a social media app or game might aim for a 50% ratio, while a utility app might be closer to 20%. In my experience, improving Stickiness often comes down to UX enhancements or personalized features. Apps also can often improve their Stickiness by gamifying parts of the core user journey (aka gamification) – think achievements, leaderboards, progression paths, …
- Average Session Length: How long do users spend on your app or platform during a single visit? Longer sessions often indicate deeper engagement, though context matters – a banking app might have shorter sessions but still deliver high value. In gaming, session length and frequency (average number of sessions per user) are critical to understanding player habits.
- (Lesser-Known) Time-to-Value (TTV): Measures the average time it takes for a new user to experience the core benefit or “Aha!” moment of the product. This is arguably the most critical metric for successful onboarding, as a shorter TTV directly correlates with higher D1/D7 retention rates. For a file-sharing app, TTV might be the time until the user successfully shares their first file; for a SaaS tool, it might be the time until a key report is generated. Identifying the “Aha!” moment and designing the onboarding flow to reach it quickly is the fastest path to boosting long-term engagement.
- (Lesser-Known) Player/User Progression: Measures the percentage of users reaching specific milestones in a product or game, such as completing levels, tutorials, or key objectives, helping identify design bottlenecks where users drop off. In mobile games, for instance, with 80% of players often not reaching the end of titles, tracking progression through clear goals can reveal engagement barriers and inform rewards or difficulty adjustments. For SaaS products, this translates to monitoring user advancement through critical workflows or tracking the percentage of users engaging with a specific function within an app (e.g., activation rate for a featur) offers granular insight into feature adoption, guiding targeted in-app prompts or redesigns to boost usage. This metric is essential for refining user journeys across both gaming and SaaS, ensuring designs facilitate meaningful interaction and long-term retention.
- (Lesser-Known) Average Score or Skill Level: Tracks user performance metrics in games and skill-building apps, guiding difficulty adjustments or feature design to enhance engagement. In gaming, it reflects player scores or rankings, helping developers balance challenge levels to prevent frustration or boredom. For skill-focused platforms like language-learning apps, it measures proficiency or mastery, enabling personalized content delivery.
For example, Duolingo uses a proprietary “Duolingo Score” (ranging from 0 to 160) to track language progress against CEFR levels, e.g., 60-95 for B1 (intermediate), and monitors “Skill Strength” for specific areas, motivating users with visible advancement and informing dynamic difficulty adjustments similar to gaming models. This metric is crucial for tailoring user experiences, ensuring progression feels rewarding across diverse digital products.
Takeaway: Engagement is the heartbeat of retention. Use these metrics to identify friction points in the user journey and iterate on features that keep users coming back, whether it’s through better design or compelling content like in-game events.
3. Retention and Churn: Are You Building Loyalty?
Retention is where the magic happens. A product that can’t retain users will struggle to grow sustainably.
- Retention Rate (D1, D7, D30): Percentage of users returning (precisely) after 1, 7, or 30 days, often a strong indicator of product-market fit when benchmarked against industry standards. These metrics also help compare marketing campaigns to identify which attract the most loyal users over time (i.e. also interesting from the “Growth” perspective.
- Churn Rate (D1, D7, D30): Measures the percentage of users who stop using a product at specific intervals (e.g., 1, 7, or 30 days after initial interaction), highlighting retention pain points where users drop off. It’s often the inverse of Retention Rate, calculated as the number of users from a cohort who do not return on or within the specified period, divided by the total cohort size (e.g., if 30 of 100 users don’t return by D7, the D7 Churn Rate is 30%). Tracking inactive users is challenging since it relies on inferring absence of activity, such as “no app opens” or “logins”, via analytics tools that log user events. This metric is critical for identifying where and why users disengage, enabling targeted interventions like re-engagement campaigns to win back at-risk users.
- (Lesser-Known) Rolling Retention Rate: Measures the percentage of users active on or after a specific day (e.g., D1, D7, D30), offering a cumulative view of long-term stickiness compared to Standard Retention, which focuses strictly on returns on exact days. Unlike Standard Retention, where a D7 rate only counts users returning precisely on Day 7 post-install, Rolling Retention includes those who return on Day 7 or any day thereafter, capturing a broader picture of user loyalty. It’s calculated by dividing the number of users from a cohort who return on or after the specified day by the total cohort size, requiring daily updates as late returners can shift earlier metrics. This makes it more complex to track but invaluable for assessing sustained engagement trends over flexible time frames. It’s particularly useful for products with irregular usage patterns, like subscription services or games with seasonal events, where users may not return daily but still show loyalty over time. Use it alongside Standard Retention to balance insights into specific drop-offs with overall stickiness.
Takeaway: Retention is cheaper than acquisition. Focus on delivering consistent value and solving user pain points to minimize churn, a principle that applies as much to games as to SaaS products .
4. Revenue Metrics: Is Your Product Profitable?
At its core, financial sustainability requires digital products to drive revenue (or demonstrate a clear path to profitability).
- Customer Lifetime Value (CLV or LTV): Estimates the average revenue or profit generated per user over their entire relationship with a business, or at specific intervals (e.g., D1, D7, D30), key for profitability analysis. Calculating a true “lifetime” value is challenging due to uncertainties in future behavior, churn rates, and revenue variability, requiring predictive models that contrast with concrete historical data at fixed points like D90. Despite this, CLV is vital for comparing against Customer Acquisition Cost (CAC) to assess sustainability (e.g., aiming for a 3:1 CLV/CAC ratio), guiding marketing spend, segmenting high-value customers for personalized strategies, and forecasting long-term growth.
- Conversion Rate (Funnel Specific): Measures the percentage of users who complete a specific key monetary action, such as moving from a free trial to a paid subscription, making a first in-app purchase, or converting from an anonymous visitor to a buyer (e-commerce). A high Conversion Rate indicates that your onboarding, pricing, and value proposition are effective at turning engaged users into paying customers. Tracking this metric at different stages of the user journey (e.g., Trial Conversion Rate vs. Feature Conversion Rate) is essential for identifying friction points that stall revenue growth.
- Average Revenue Per User (ARPU): Average revenue across all users, assessing overall monetization health.
- (Lesser-Known) Average Revenue Per Paying User (ARPPU): Focuses revenue analysis on paying users only, useful for understanding high-value customer behavior – especially important in the Freemium economy.
- (Lesser-Known) Time to First Purchase: Average time a user takes to make their first purchase, helping optimize onboarding for conversions.
Takeaway: Revenue KPIs ensure your product isn’t just popular but profitable. Align product development with revenue goals, whether through subscriptions, one-time purchases, or ad impressions, to maximize impact.
5. Operational Metrics: Is Your Product Performing Technically?
I can’t stress enough the importance of technical performance. A product that crashes or lags will lose users – no matter how great the features are.
- Uptime/Downtime: What percentage of the time is your service available? Aim for 99.9% uptime or better. Cloud infrastructures can help to ensure reliability during traffic spikes.
- (Lesser-Known) Crash Rate and Reports: Percentage of app or game crashes, ideally with detailed reports to pinpoint causes.
- (Lesser-Known) ANR (App Not Responding) Rate: Percentage of users experiencing app freezes or hangs, critical for maintaining a smooth experience.
Takeaway: A seamless technical experience is non-negotiable. Monitor operational KPIs like crash rates to prevent user frustration and maintain trust, especially in high-interaction environments like games.
Bringing It All Together: Build a KPI Dashboard
Tracking KPIs in isolation won’t cut it. I recommend building a centralized dashboard (using tools like Tableau, Google Data Studio, or gaming-specific platforms like GameAnalytics or Mixpanel, as often used in online product analytics) to monitor these metrics in real time. Share this dashboard with your team to foster alignment and accountability.
Final Thoughts: KPIs Are a Journey, Not a Destination
Choosing the right KPIs is not a one-time task. As your product evolves, so should your metrics. Early-stage startups might focus on user growth and engagement, while mature businesses prioritize revenue and operational efficiency. A key takeaway from gaming analytics is the importance of defining the purpose of tracking – whether for design, retention, or monetization– and selecting tools that align with those goals, be it third-party solutions or custom-built systems. The key is to stay curious: dig into the “why” behind the numbers and use them to tell the story of your product’s impact.
A Note on Big Data and Privacy Concerns: As we harness the power of analytics, we must be wary of the pitfalls of “Big Data.” A common trap is the tendency to collect vast amounts of data just “because we can,” only to drown in it later. Many teams lose focus by amassing more data than they can meaningfully analyze, diluting their ability to act on critical insights. Additionally, this over-collection can also raise significant privacy concerns. Data gathering must comply with local regulations, prioritize user consent, and adhere to principles like data minimization and anonymization.