15 Important Growth Marketing Metrics to Track (and Why)
Discover the top growth marketing metrics you should track to measure performance.
Growth marketing is a by-product of the digital age – known for being experimental, agile, and even a little scrappy (see: growth hacking). But a misconception has emerged that growth marketing’s iterative, test-and-learn approach is nothing more than a series of shortcuts or “quick wins.”
The companies that have mastered growth know different.
What wins in growth marketing is being data-driven. Meaning, the most successful teams live and die by their growth marketing metrics. This is how they establish a baseline, track progress, identify what’s working (and what isn’t), hone their strategies, and, of course, scale the business.
Which leads us to the question of: which metrics are worth tracking? Below, we'll share 15 important growth metrics to keep a pulse on and explain why they’re important.
What are growth marketing metrics?
Growth marketing metrics are measurements of business performance – looking specifically at how your business is progressing when it comes to revenue, acquisition, and retention. Depending on your company’s growth goals, there may be variation in how you prioritize these metrics.
But what is non-negotiable when it comes to monitoring growth metrics is having access to accurate data. As businesses add more apps to their tech stacks, they find themselves running into the issue of siloed data. Having a scalable data infrastructure to consolidate customer data in real-time, and democratize it across the organization, is a must. Otherwise, you can’t trust the metrics you’re basing your strategies off of.
Now, let’s dig into the specifics of what growth marketing metrics you should be tracking.
When we hear “growth,” we tend to think of revenue – and with good reason. Revenue is how you pay your employees, fund R&D, or expand into new territories. Without it, your business won’t survive, plain and simple.
However, there are a few different revenue metrics to be aware of to better understand the when-and-why of how your business makes its money.
Let’s start at the top of your income statement. Revenue is the total amount of money your business brings in within a certain timeframe (e.g. annually, quarterly) for sales made or services provided.
This metric should be top-of-mind, as it’s one of the ultimate goals of growth marketing: to steadily increase revenue and improve business profitability (e.g. how much income is left after deducting the cost of operations).
Annual Recurring Revenue (ARR)
Annual recurring revenue (ARR) is a metric typically used among SaaS or subscription-based companies to calculate the income they’ll receive in a single year, based on their number of contracts or subscriptions. When measuring ARR, “non-recurring” revenue components are always excluded (i.e. one-time payments or expenses).
By monitoring annual recurring revenue, growth marketers can track their predicted revenue growth year-over-year to not only understand business performance, but to better inform ongoing strategies (e.g. adjusting subscription tiers).
Monthly Recurring Revenue (MRR)
Similar to ARR, monthly recurring revenue (MRR) measures the expected income a business will receive in a month based on its recurring revenue (i.e. monthly subscriptions or memberships).
Especially for subscription-based services, MRR helps businesses keep a pulse on the health of their business, and how they’re retaining or upselling customers month-to-month (helping spot patterns when it comes to acquisition, churn, or even lifetime value).
Average Revenue Per User (ARPU)
Average revenue per user (ARPU) looks at the revenue generated from each customer within a specific period. So, if you wanted to calculate the ARPU in the past quarter, you would divide the total revenue earned in that timeframe by the number of customers you had.
In breaking down the average revenue earned per user, growth marketers can get a more nuanced view of their customer base. Are the right buyer personas being targeted? Are there opportunities to encourage upgrades or add-ons to current customers? These are the questions that ARPU can help answer to drive growth and retention.
Lifetime Value (LTV)
Lifetime value (LTV) measures the income a customer is expected to generate for a business throughout the entire customer relationship. This metric helps growth marketers identify high-value customers, or “big spenders,” and work to retain them.
Equally important to knowing how much revenue you’re gaining is being aware of how much you’re losing in that same timeframe. This is where revenue churn comes into play, which measures the recurring income lost in a specific period due to customer churn or downgraded subscriptions.
While revenue churn is a normal part of doing business, growth is impossible if you’re losing more money than you’re making. By digging deeper into why customers are leaving, or moving to lower pricing tiers, businesses can develop a stronger understanding of who their target audience should be, better evaluate their pricing model, and rectify any friction in the customer experience that could be contributing to churn.
Acquisition metrics are how you keep track of new customers and incoming business. It’s a sign of expanding your customer base and, depending on your retention rates, increasing your bottom line.
Below are three important metrics to keep in mind when evaluating ways to improve growth as it relates to acquisition.
Customer Acquisition Cost (CAC)
Customer acquisition cost (CAC) answers the question of: how much money does it take to bring in a new customer? This metric is calculated by taking the cost of marketing and sales efforts and dividing it by the number of new customers gained within a given period.
Customer acquisition costs help businesses understand the impact of their marketing and sales campaigns, and how to improve them. By experimenting with what channels are being used to engage customers, or which personas are being targeted (as just two examples), growth marketers can reduce the cost of acquisition to generate more revenue.
A conversion rate is the percentage of people who completed a desired action on your website. Depending on the goals of the business, the conversion in question could be:
Signing up for a demo
Completing a purchase
Downloading a gated asset
Increasing conversion rates is a common goal in growth marketing. Using this metric as a guide, growth marketers can experiment with everything from UX design to incentivizing users with personalized offers to increase engagement.
Shopping cart abandonment rate
Shopping cart abandonment rate looks at the percentage of users who added an item to their online cart without completing a purchase (versus those that did).
While cart abandonment rates will vary by industry, a culmination of 41 studies found the average abandonment rate to be just below 70%.
Growth marketers will often hone in on this metric as it shows intent, using this data to retarget users that have expressed interest in a specific product. Other strategies could include offering a discount to first-time buyers, or throwing in free shipping after exceeding a certain price point.
As we know, growth isn’t just about adding new customers into the fold. It’s about maintaining the satisfaction and loyalty of your current customers as well. To do that, there are at least five different customer metrics that should be on your radar.
Activation rate refers to the time it takes for a new user to gain value when using a product or software. (How quickly are they up and running inside the platform? Are they seeing the value in using specific features in their day to day?)
Monitoring activation rates allow businesses to proactively intervene if they notice lagging engagement for new customers, which can often be a predictor of churn. This metric helps highlight potential weak points in the onboarding process, and helps businesses usher users to their “aha” moments at a faster rate.
Retention rate refers to the percentage of customers that continue to do business with your brand within a specific timeframe (e.g. maintaining their subscriptions, making repeat purchases, and so on).
Increasing customer retention is one of the ultimate growth strategies. First, digging into why people continue to do business with your brand helps companies understand their competitive differentiators. Second, it’s much cheaper to keep a current customer than to acquire a new one (we’re talking 5-25x less expensive). In fact, a large part of growth is about patching up these leaks in the funnel.
Now, for the inverse of retention rate: customer churn. This is a measure of how many customers your business lost in a specified period. Reducing churn is an ongoing priority for growth marketers (we’ve said it time and again, but there is no growth if churn exceeds retention). While churn is an unfortunate business reality, it does carry a silver lining.
The reasons behind why customers churn can be a goldmine of insights, pointing to a buggy interface or better-priced competitors – insights that a company can use to improve their product, customer experience, and unique value propositions to keep customers on board.
Repeat Purchase Rate
Repeat purchase rate is a metric mainly used by e-commerce brands to calculate the percentage of customers that buy more than once from your business. Repeat purchasers are loyal to the business, tend to spend more over time (one study found customers spent 67% more per order after shopping at a clothing brand for over 30 months), and are also more likely to refer their friends or colleagues.
As a result, encouraging repeat purchasers is a savvy (and necessary) growth strategy that’s related to increasing customer lifetime value and ongoing retention rates.
Net Promoter Score (NPS)
Net Promoter Scores (NPS) ask customers to rank how likely they are to recommend your product or business on a scale of 1-10. Depending on their ranking, customers are categorized as either promoters (i.e. extremely likely to recommend your brand), detractors (i.e. unlikely to make a referral), or passives (i.e. neutral).
Quantifying how customers feel about your brand with this numerical score (and their written feedback) offers business valuable insight into what they’re doing well, and what they can improve on. Being able to capitalize on customers’ word-of-mouth recommendations and referrals is also a cost-effective and impactful strategy for growth (in fact, studies show friends and family are much more influential when it comes to encouraging brand adoption than ads or even influencers).
Your “North Star” metric
A North Star metric is a measurement of the unique value a business offers its customers. For a food delivery app, the North Star metric might be the number of deliveries made. For a streaming service, it might be the minutes spent watching content.
A North Star metric creates internal alignment about what will ultimately drive growth for the company. Using the example of a streaming service, the minutes people spend watching a show is likely an indication of how valuable a person finds the platform and how likely they are to keep their subscription.
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