Product analytics glossary

Plain-English explanations of the metrics and concepts every founder, indie hacker, and product builder should know.

Conversion

Conversion Rate

Conversion rate is the percentage of visitors who complete a desired action on your site, like signing up, buying, or downloading.

Bounce Rate

Bounce rate is the percentage of visitors who land on your site, view only one page, and leave without taking any action.

Click-Through Rate (CTR)

Click-through rate (CTR) is the percentage of people who click a link, button, or ad after seeing it.

Conversion Funnel

A conversion funnel is a series of steps a visitor takes from landing on your site to completing a desired action.

Drop-off Rate

Drop-off rate is the percentage of users who leave a specific step in your funnel without completing it.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is the total cost of acquiring one new customer, including marketing, sales, and tools.

UTM Parameters

UTM parameters are tags you add to a URL to tell your analytics tool exactly which campaign, source, or medium brought a visitor.

Activation Rate

Activation rate is the percentage of new users who reach a defined 'meaningful first value' moment in your product.

Time to Value (TTV)

Time to value (TTV) is the amount of time between a user signing up and experiencing meaningful value from your product.

Aha Moment

An aha moment is the specific moment a new user first realizes the value of your product and thinks 'I get it'.

DAU/MAU Ratio

DAU/MAU ratio is the percentage of monthly active users who use your product on any given day. It measures product stickiness.

Retention Rate

Retention rate is the percentage of users from a starting cohort who are still active after a defined period.

Churn Rate

Churn rate is the percentage of users or customers who stop using your product in a given period.

Customer Lifetime Value (LTV)

Customer Lifetime Value (LTV) is the total revenue you expect to earn from a single customer over the entire time they stay with you.

Cohort Analysis

Cohort analysis is the practice of grouping users by a shared characteristic (usually signup date) and tracking how each group behaves over time.

North Star Metric

A North Star Metric is the single metric that best captures the core value your product delivers to customers.

Monthly Recurring Revenue (MRR)

Monthly Recurring Revenue (MRR) is the total predictable revenue your business earns from subscriptions in a given month.

Growth Rate

Growth rate is the percentage by which a metric (like MRR or active users) increases from one period to the next.

Viral Coefficient (K-Factor)

Viral coefficient (K-factor) is the average number of new users that each existing user brings in.

A/B Testing

A/B testing is an experiment where you show two versions of something to different groups of users to see which performs better.

Statistical Significance

Statistical significance is the probability that a result is real and not due to random chance.

Attribution

Attribution is the process of assigning credit for a conversion to one or more marketing touchpoints.

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