8 Metrics Each Product Company Should Monitor

Building a successful digital product isn’t just about users acquisiotion. It’s about keeping them engaged and returning. Getting a new user costs 5–25x more than retaining one, so focusing on engagement, retention, and activation is what drives sustainable growth.

Whether you run a mobile app, SaaS platform, or online service, these metrics reveal how users experience your product:

1. DAU/MAU Ratio

Tracking Daily to Monthly Active Users shows how many of your monthly users are active each day. It varies by product type:

• 50-60% social or messaging apps

• 30-40% productivity tools

• 10-20% uutility apps used weekly

If your DAU/MAU ratio drops, users may sign up but not stay — check onboarding and value delivery.

2. Retention Rate

According to Bain & Company, increasing customer retention rates by 5% can increase profits by up to 85%. Track these intervals:

• Day 1: Do users come back tomorrow?

• Day 7: Are you building a habit?

• Day 30: Have you proven lasting value?

• Day 90: Are users truly integrated into their workflow?

  
  

If only 20% of users are active by Day 30, you're losing 80% of your acquisition investment within a month. Fix onboarding and time-to-value.

3. Cohort Analysis and Retention

Retention tells what’s happening — cohorts show why. Compare user groups by sign-up date or acquisition channel to learn:

• Which channels bring loyal users

• Whether new features improve retention

• If engagement trends up or down over time

4. Session Length and Frequency

Two users might both be "monthly active," but one spends 5 minutes per month while another spends 300 minutes. Who's more valuable? Who's more likely to retain or convert? These metrics reveal how deeply users engage. Session metrics are leading indicators for retention and lifetime value.

5. Activation Rate

Activation is the main step that turns a casual visitor into an engaged user. Users who activate are far more likely to retain. Dropbox discovered that users who uploaded at least one file were significantly more likely to become long-term users. That simple action became their activation milestone.

Small improvements to activation, such as simplifying onboarding, showing value sooner, or reducing friction, can double retention.

6. Funnel Conversion Rates

Funnels reveal where users drop off. Track these funnels:

• Onboarding funnel: From sign-up to first value/activation

• Engagement funnel: From inactive to regular user

• Monetization funnel: From free user to paid customer

Even small improvements in funnel conversion can lead to big gains across your user base.

7. LTV and CAC

LTV rises with better retention, engagement, and monetization. CAC includes all marketing and sales costs divided by the number of new users you get in that period. CAC might seem like just a marketing metric, but product teams should care about it as well.

How These Metrics Work Together

The real power comes from understanding connections:

Better activation → Higher retention → Deeper engagement → Longer lifetime → Higher LTV → Ability to spend more on acquisition.

Modern analytics tools, like DataLight, automate this connection — detecting shifts across segments so you can react in real time.

• Track these metrics weekly (or daily for fast-moving products)

• Set up alerts for unusual changes instead of checking dashboards by hand

• Segment by cohort, channel, and user characteristics to understand nuance

• Act quickly on signals before small issues become major problems

Ready to monitor these critical metrics without extra manual work?

Try DataLight free for 7 days. It automatically tracks your key engagement and retention metrics, learns what is normal for your product, and alerts you to important changes so you can focus on taking action instead of searching through dashboards.