KPI guide
Key performance indicators every tech professional should know
KPIs tell you whether your product and business are moving in the right direction. Here are the metrics that matter — with formulas, benchmarks, and when to use each one.
What is a KPI?
KPI stands for Key Performance Indicator. A KPI is a quantitative metric that tells you whether you are making progress toward a goal. The word "key" matters — most things you can measure are not worth tracking. Good KPIs are SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
A metric becomes a KPI when it is tied to a goal and reviewed on a cadence. "Daily Active Users" is a metric. "Grow DAU from 50k to 80k by Q4" is a KPI.
Product KPIs
These measure whether your product is delivering value and retaining users.
Daily / Monthly Active Users
Measures engagement at a daily or monthly cadence. The DAU/MAU ratio (Stickiness) tells you what percentage of monthly users engage every day.
20%+ is good. 50%+ is excellent (WhatsApp-level).
Day 1 / Day 7 / Day 30 Retention
The percentage of users who return after their first session. The most important signal of whether your product delivers lasting value.
D1: 40%+. D30: 15–25% for consumer apps.
Net Promoter Score
Asks users: "How likely are you to recommend us?" on a 0–10 scale. Detractors score 0–6, Passives 7–8, Promoters 9–10.
50+ is excellent. Above 70 is world-class.
Time to Value
How long it takes a new user to experience the core value of your product. The single most actionable onboarding metric.
Minimize it. Every extra minute is churn risk.
Growth KPIs
These measure how efficiently you acquire and convert new customers.
Conversion Rate
The percentage of visitors who complete a desired action — signing up, starting a trial, or purchasing.
Homepage to signup: 2–5%. Trial to paid (SaaS): 15–25%.
Customer Acquisition Cost
Total marketing and sales spend divided by new customers acquired in the same period.
CAC should be at least 3× lower than LTV.
Churn Rate
The percentage of customers who cancel or do not renew in a given period. The silent killer of SaaS growth.
Monthly churn under 2% is healthy for SaaS.
Business KPIs
These measure the financial health and long-term viability of the business.
Monthly / Annual Recurring Revenue
The gold standard for SaaS financial health. MRR smooths out one-time payments into a predictable baseline.
Track MoM MRR growth. Aim for 10–15% MoM in early stage.
Lifetime Value
The average total revenue generated by a customer over the entire relationship with your product.
LTV should be 3× or more than CAC.
Net Revenue Retention
Revenue from existing customers including expansion revenue (upsells, upgrades) minus churn and downgrades. Over 100% means you grow even without new customers.
110%+ is excellent. 120%+ is best-in-class.
The North Star Metric
A North Star Metric is the single metric that best captures the value your product delivers to users. It is not a business metric — it is a user value metric. Revenue follows when users get value; optimize for the value first.
Your North Star should measure value delivered to users, not revenue. Revenue follows value — not the other way around.
Leading vs. lagging metrics
Not all metrics tell you the same thing at the same time. The distinction between leading and lagging indicators changes how you act on data.
Lagging indicators confirm what already happened. They are accurate but slow — by the time they move, the cause is weeks or months in the past.
Leading indicators move first. They give you time to course-correct before the lagging indicators drop. Build dashboards around these.
Focus your dashboards on leading indicators. They give you the time to act before the lagging metrics drop.
Go deeper
Go deeper on product metrics
Formulas and benchmarks for every metric a PM is expected to know — DAU, MAU, churn, NPS, LTV, and more.