Welcome to the Metrics & Performance Jargon Guide – a key resource for Product Managers to decode performance-driven terms that guide decision-making and growth. Whether you’re analyzing funnels, improving retention, or tracking engagement, these definitions help you focus on what truly moves the needle.
Activation
The moment a user experiences the core value of your product for the
first time.
Example: For Slack, activation might be when a team successfully sends 10+ messages — signaling initial value is delivered.
Retention
The ability of your product to keep users coming back over time.
Sign: Strong retention means users are deriving consistent value. Measured
over Day 1, Day 7, and Day 30 intervals.
Churn
The percentage of users who stop using your product over a given period.
Example: If 100 users sign up and 20 don’t return in the first month, you have a 20% monthly churn rate.
Cohort Analysis
A technique to track how specific groups of users behave over time.
Example: Comparing retention of users who signed up in January vs. March can surface the impact of a new onboarding flow.
Session Duration
The average time a user spends in one visit to your product.
Insight: A long session may signal high engagement — or poor UX if users are taking too long to complete simple tasks.
DAU / MAU
Daily Active Users (DAU) and Monthly Active Users (MAU) — core metrics for tracking product usage.
Example: A DAU/MAU ratio of 0.5 (or 50%) signals that users return at least
15 out of 30 days — a great sign of stickiness.
Conversion Funnel
A step-by-step path users take toward a goal — like signing up, subscribing, or making a purchase.
Use Case: Funnel analysis helps identify drop-offs — like users adding items to
a cart but not checking out.
Drop-off Rate
The percentage of users who exit before completing a goal within a funnel.
Example: A high drop-off on the payment screen might suggest pricing
concerns or trust issues.
North Star Metric (NSM)
A single, critical metric that best reflects the core value delivered to users.
Example: For Duolingo, it might be “daily lessons completed per user.”
Average Revenue Per User (ARPU)
The total revenue generated divided by the number of active users — helps evaluate monetization efficiency.
Use Case: Useful for subscription and SaaS models to track growth in user monetization over time.
Lifetime Value (LTV)
The total revenue a business expects to earn from a customer over the entire span of their relationship.
Example: If a user pays ₹500/month and stays for 12 months, their LTV is ₹6,000.
Customer Acquisition Cost (CAC)
The total cost of acquiring a new customer, including marketing, sales, and
other onboarding efforts.
Example: If you spend ₹50,000 on marketing and acquire 100 users, your
CAC is ₹500 per user.
LTV:CAC Ratio
The ratio of Lifetime Value (LTV) to Customer Acquisition Cost (CAC) — used
to measure long-term business viability.
Rule of Thumb: A 3:1 LTV:CAC ratio indicates sustainable growth; below 1:1 means you’re losing money on each user.
Bounce Rate
The percentage of users who land on a page and leave without taking any action.
Use Case: High bounce rates on a landing page signal poor content
relevance or mismatched intent.
Funnel Leakage
Points in the conversion journey where users drop off unexpectedly before completing the desired action.
Example: If users consistently leave after email verification, the next step in the funnel might be confusing or slow.
Funnel Completion Rate
The percentage of users who complete the entire journey from entry to conversion.
Example: If 10,000 users enter the signup flow and only 1,000 finish, your completion rate is 10%.
Time to First Value (TTFV)
The time it takes for a new user to reach their first meaningful success using the product.
Example: For Canva, it might be the time it takes a user to create and export their first design.
Feature Adoption Rate
The percentage of users who start using a new feature out of the total eligible users.
Use Case: Helps PMs validate whether a newly shipped feature is solving the intended problem.
The ProductBrain 