Metrics Dictionary

Clear definitions and "how to use it" guidance for growth metrics.

Use this reference to align reporting, prioritize experiments, and keep teams speaking the same measurement language.

  • Activation Rate

    The share of new users who reach a meaningful first success milestone, such as finishing onboarding or completing a core action.

    Formula: Activation Rate = Activated users / New users

    Use it to diagnose early product friction and onboarding quality.

  • Average Order Value (AOV)

    The average revenue per transaction, showing how much customers spend each time they purchase.

    Formula: AOV = Revenue / Orders

    Use it to evaluate pricing, bundles, and upsell performance.

  • Average Revenue Per User (ARPU)

    The average revenue generated per active user over a defined time period.

    Formula: ARPU = Revenue / Active users

    Use it to compare monetization strength across cohorts or plans.

  • Bounce Rate

    The share of visits that exit after viewing a single page, often signaling a mismatch between promise and content.

    Formula: Bounce Rate = Single-page sessions / Total sessions

    Use it to assess landing page relevance and message alignment.

  • CAC (Customer Acquisition Cost)

    The average cost to acquire a new customer across sales and marketing efforts.

    Formula: CAC = Sales + marketing spend / New customers acquired

    Use it to evaluate whether acquisition spend is sustainable.

  • Churn Rate

    The percentage of customers or revenue lost in a period, showing the rate of attrition.

    Formula: Churn Rate = Customers lost / Customers at start of period

    Use it to quantify retention risk and prioritize lifecycle fixes.

  • Click-Through Rate (CTR)

    The percentage of impressions that result in a click, indicating creative or message pull.

    Formula: CTR = Clicks / Impressions

    Use it to compare creative concepts or channel targeting.

  • Conversion Rate (CVR)

    The share of visitors who complete a desired action, such as a signup or purchase.

    Formula: CVR = Conversions / Visits

    Use it to validate funnel improvements and landing page changes.

  • Contribution Margin

    Revenue left after variable costs, showing the dollars that can cover fixed costs and profit.

    Formula: Contribution Margin = (Revenue - Variable costs) / Revenue

    Use it to model profitability at the campaign or product level.

  • Customer Lifetime Value (LTV)

    The total gross profit or revenue expected from a customer over their relationship with the business.

    Formula: LTV = ARPU x Gross margin x Average customer lifespan

    Use it to set CAC ceilings and evaluate acquisition payback.

  • Customer Payback Period

    The time it takes to recover customer acquisition spend through gross profit from that customer.

    Formula: Payback = CAC / Gross profit per customer per period

    Use it to align growth spend with cash flow constraints.

  • DAU/MAU (Stickiness)

    The ratio of daily active users to monthly active users, indicating habitual product usage.

    Formula: Stickiness = DAU / MAU

    Use it to benchmark engagement for consumer or usage-based products.

  • Engagement Rate

    The percentage of users who meaningfully interact with content (likes, comments, shares, or time spent).

    Formula: Engagement Rate = Engagements / Impressions

    Use it to evaluate content relevance and creative resonance.

  • Gross Margin

    The percentage of revenue remaining after direct costs of goods or service delivery.

    Formula: Gross Margin = (Revenue - COGS) / Revenue

    Use it to understand profitability across products or channels.

  • Lead-to-Customer Rate

    The share of leads that ultimately become customers, showing the end-to-end conversion quality of your funnel.

    Formula: Lead-to-Customer Rate = New customers / Leads

    Use it to diagnose leakage between acquisition and sales.

  • Marketing Efficiency Ratio (MER)

    Total revenue relative to total marketing spend, capturing the blended return of all channels.

    Formula: MER = Revenue / Total marketing spend

    Use it to manage budget at the business level instead of channel-by-channel.

  • MQL to SQL Rate

    The percentage of marketing-qualified leads that become sales-qualified leads.

    Formula: MQL to SQL Rate = SQLs / MQLs

    Use it to align marketing lead quality with sales readiness.

  • Net Promoter Score (NPS)

    A loyalty score based on how likely customers are to recommend your product.

    Formula: NPS = % Promoters - % Detractors

    Use it to gauge brand advocacy and customer sentiment shifts.

  • Net Revenue Retention (NRR)

    Revenue retained from existing customers after churn, expansions, and contractions.

    Formula: NRR = (Starting revenue + Expansion - Contraction - Churn) / Starting revenue

    Use it to understand account growth momentum without new logos.

  • Pipeline Velocity

    The speed at which pipeline converts into revenue, combining deal size, win rate, and sales cycle length.

    Formula: Pipeline Velocity = (Qualified pipeline x Win rate x Average deal size) / Sales cycle length

    Use it to forecast revenue and pinpoint bottlenecks in sales.

  • Retention Rate

    The percentage of customers who stay active over a period, capturing loyalty and product fit.

    Formula: Retention Rate = (Customers at end of period - New customers) / Customers at start of period

    Use it to monitor cohort health and product stickiness over time.

  • Return on Ad Spend (ROAS)

    Revenue generated for each dollar of ad spend, usually at the campaign or channel level.

    Formula: ROAS = Revenue from ads / Ad spend

    Use it to optimize paid media budgets and creative mix.

  • Revenue Churn

    The percentage of recurring revenue lost in a period, which can differ from customer churn when account sizes vary.

    Formula: Revenue Churn = Revenue lost to churn / Starting revenue

    Use it to measure the financial impact of churn on growth.

  • Time to Value (TTV)

    The time it takes a new customer to reach their first meaningful value moment.

    Formula: TTV = Date of first value - Signup date

    Use it to prioritize onboarding improvements and reduce early churn.

  • Trial-to-Paid Conversion

    The percentage of trial users who convert to paid customers after experiencing the product.

    Formula: Trial-to-Paid Conversion = Paid customers from trials / Trial starts

    Use it to evaluate trial flow messaging, feature access, and onboarding.

  • Weighted Pipeline Coverage

    The ratio of weighted pipeline to quota, factoring in win probabilities for each deal.

    Formula: Weighted Coverage = Sum(Deal value x Win probability) / Quota

    Use it to spot whether pipeline is sufficient to hit targets.

  • Win Rate

    The percentage of opportunities that close successfully, indicating sales effectiveness.

    Formula: Win Rate = Closed-won deals / Total opportunities

    Use it to track sales enablement progress and forecast accuracy.

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