The most important consumer metrics to track

Which metrics matter most when building a B2C product

đź‘‹ Hey, Lenny here! Welcome to a đź”’ subscriber-only edition đź”’ of my weekly newsletter. Each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out about work. Send me your questions and in return I’ll humbly offer actionable real-talk advice.


Q: I’m building a consumer app and wondering what metrics I should focus on.

There are many types of consumer businesses, and the metrics you focus on depend heavily on the type of consumer product you’re building. In particular, how you make money. Below I’ll focus on five types that I’m most familiar with:

  1. Subscription—trial-based (e.g. Calm, Noom)

  2. Subscription—freemium (e.g. Duolingo, Spotify)

  3. Ad-based (e.g. Snap, Twitter)

  4. Marketplaces (e.g. Airbnb, Etsy)

  5. DTC (e.g. Hims, Glossier)

Don’t look at these suggestions as the one and only answer. Instead, use them as a starting point. As you learn more about what levers most impact the health and growth of your business (e.g. retention, margins, acquisition, etc.), focus on those. Try to narrow in on the two or three metrics that most directly drive your business’s success. I’ve learned this lesson many times over: greater focus leads to greater impact.

Big thank-you to Sriram Krishnan and Yuriy Timen for contributing to this post.

The most important consumer metrics to track

Subscription—trial-based

Trial-based subscription products generally succeed through low acquisition costs, a high conversion rate from trial to paid, and high retention. I’d start by focusing on the following six metrics:

  1. Trials growth: New trials started

  2. Conversion: % of trials that convert to customers

  3. Customer retention: Month 1/3/6 cohort retention

  4. Revenue: Monthly recurring revenue

  5. CAC: Cost of acquiring a trial

  6. Growth spend efficiency: Payback period or CAC/LTV

Subscription—freemium

Freemium-based subscription products generally succeed through building large pools of free users (generally through WOM/virality), a high-enough conversion rate from free to paid, and high retention. I’d start by focusing on the following eight metrics:

  1. User growth: New signups

  2. User retention: Week 1/2/12 cohort retention

  3. Customer growth: New paying customers

  4. Customer retention: Month 1/3/6 cohort retention

  5. Conversion: % of free users that end up converting to customers after 1-3 months

  6. Engagement: Key action each day/week/month

  7. Revenue: Monthly recurring revenue

  8. Growth spend efficiency: Payback period or CAC/LTV

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