Product-Led Growth has become the default growth strategy for modern SaaS companies. The premise is simple: let the product itself be the primary driver of customer acquisition, activation, expansion, and retention. Instead of relying on sales teams to convert prospects, let users experience the product's value firsthand and convert themselves.
But PLG without measurement is just giving away free product and hoping for the best. The metrics you track determine whether your PLG motion is working, where it is breaking down, and what to fix. Unfortunately, most teams either track too many metrics (drowning in dashboards) or too few (flying blind).
This guide covers the PLG metrics that matter, organized by the stage of the user journey they measure. For each metric, we explain what it tells you, how to calculate it, what benchmarks to target, and what levers you can pull to improve it.
The PLG Metrics Framework
PLG metrics map to five stages of the user lifecycle. Each stage has a primary metric and supporting metrics that provide diagnostic depth.
1. Acquisition: How are users finding and signing up for the product?
2. Activation: Are new users reaching the product's core value quickly enough?
3. Engagement: Are activated users building the product into their workflow?
4. Monetization: Are engaged users converting to paid plans and expanding?
5. Retention: Are paying users staying and renewing?
This framework is not original. It draws on the pirate metrics (AARRR) model that Dave McClure popularized. What is different here is the depth of each metric and the specific guidance on benchmarking and improvement, tailored for product leaders managing PLG motions at scale.
Acquisition Metrics
Primary Metric: Signup Rate
Signup rate measures the percentage of website visitors who create an account. It is the top of your PLG funnel and the first indicator of whether your value proposition resonates.
Calculation: (New signups in period / Unique website visitors in period) x 100
Benchmark: 2-5% for freemium products, 8-15% for free trial products with clear use cases. These ranges vary significantly by industry and product complexity.
Improvement levers: Simplify the signup flow. Reduce form fields to the absolute minimum. Offer social login. Make the value proposition specific and outcome-oriented on landing pages. Test different calls to action.
Supporting Metric: Time to Signup
How long does it take from first website visit to account creation? If visitors are spending 10 minutes reading documentation before signing up, your value proposition is not immediately clear. If they are signing up in under 60 seconds, your messaging is working.
Activation Metrics
Primary Metric: Activation Rate
Activation rate is the single most important PLG metric. It measures the percentage of new signups who reach the product's "aha moment": the point where they experience the core value proposition for the first time.
Calculation: (Users who complete activation milestone in first X days / Total new signups in period) x 100
The challenge is defining the activation milestone correctly. It should be the earliest behavior that strongly correlates with long-term retention. For a project management tool, it might be "created a project and invited one team member." For an analytics platform, it might be "connected a data source and viewed a dashboard." For a communication tool, it might be "sent and received messages in a channel."
Benchmark: 20-40% for complex B2B products, 40-70% for simpler products with quick time-to-value.
Improvement levers: Optimize the onboarding flow to guide users to the activation milestone with the fewest possible steps. Remove friction between signup and first value. Use progressive onboarding that reveals complexity gradually rather than overwhelming users upfront.
Supporting Metric: Time to Activate
How long does it take activated users to reach the aha moment? The shorter this is, the more likely users are to convert. Best-in-class PLG products achieve activation within the first session. If your median time to activate is measured in days, you have an onboarding problem.
Activation rate is the metric that most separates successful PLG companies from unsuccessful ones. A 10% improvement in activation rate typically produces a larger downstream impact on revenue than a 10% improvement in any other PLG metric.
Engagement Metrics
Primary Metric: DAU/MAU Ratio
The ratio of daily active users to monthly active users measures how deeply the product is embedded in users' routines. A DAU/MAU of 50% means that, on average, half your monthly users use the product every day. A DAU/MAU of 10% means most users check in only occasionally.
Calculation: (Daily Active Users / Monthly Active Users) x 100
Benchmark: 15-25% for B2B products is healthy. Above 30% indicates strong daily habit formation. Below 10% suggests the product is not part of users' core workflow.
Improvement levers: Identify the workflows that drive daily usage and make them more efficient. Create notification and reminder systems that bring users back for legitimate reasons, not dark patterns. Build integrations with tools users already use daily.
Supporting Metric: Feature Adoption Depth
How many of the product's key features does the average user engage with? Shallow adoption, where users rely on only one or two features, creates churn risk because the switching cost is low. Deep adoption, where users rely on five or six features, creates stickiness.
Map your features into tiers: core features that everyone should use, power features that differentiate your product, and advanced features that serve specific use cases. Track the percentage of users who adopt features from each tier. If power features have less than 20% adoption, you have either a discoverability problem or a value problem.
Supporting Metric: Expansion Signals
Engagement metrics should surface users who are outgrowing their current plan. Track behaviors that indicate expansion readiness: hitting usage limits, inviting new team members, requesting features available only on higher tiers, or using the product for new use cases beyond their initial adoption.
These expansion signals feed directly into your monetization strategy. When you can identify users who are ready to expand before they ask, you can proactively offer them the right upgrade at the right moment.
Monetization Metrics
Primary Metric: Free-to-Paid Conversion Rate
The percentage of free users (freemium or trial) who convert to a paid plan. This is where PLG generates revenue.
Calculation: (Users converting to paid in period / Free users eligible for conversion in period) x 100
Benchmark: 2-5% for freemium models, 15-25% for time-limited free trials. These benchmarks vary significantly by price point, product category, and whether you have a sales-assist motion alongside the self-serve path.
Improvement levers: Ensure the free experience provides genuine value while creating natural friction that paid plans resolve. Make the upgrade path contextual: present the upgrade option at the moment users encounter a limitation, not as a generic banner. Use value-based pricing that scales with usage.
Supporting Metric: Revenue Per User (RPU)
Average revenue generated per user across the entire user base, including free users. RPU is a more holistic metric than ARPU (average revenue per account) because it accounts for the cost of serving free users who never convert.
Calculation: Total revenue / Total users (including free)
RPU helps you evaluate whether your freemium model is sustainable. If free users cost more to serve than the revenue generated by the users they eventually help convert, your freemium economics are broken.
Supporting Metric: Net Revenue Retention (NRR)
NRR measures the percentage of revenue retained from existing customers, including expansion revenue (upgrades) and contraction (downgrades, churn). An NRR above 100% means you are growing revenue from existing customers even without acquiring new ones.
Benchmark: 100-110% is healthy. 110-130% is excellent. Best-in-class PLG companies achieve 130%+ NRR through strong expansion motions.
NRR is the metric that investors and boards care about most because it indicates the efficiency and sustainability of your growth engine. A company with 150% NRR and 0% new customer growth would still double revenue in about 18 months.
Retention Metrics
Primary Metric: Logo Retention Rate
The percentage of paying customers who renew or remain active at the end of each period. Logo retention focuses on customer count rather than revenue, which ensures you are not masking churn with expansion from remaining customers.
Calculation: (Customers at end of period - New customers acquired during period) / Customers at start of period x 100
Benchmark: 85-90% annual retention for SMB products, 90-95% for mid-market, 95%+ for enterprise. Monthly retention should be 95%+ for any healthy SaaS product.
Improvement levers: Identify churn predictors: declining usage, decreasing logins, support ticket patterns, or failure to adopt key features. Build intervention playbooks for each churn signal. Invest in customer success for high-value accounts.
Supporting Metric: Cohort Retention Curves
Cohort analysis tracks retention by signup month, showing you how different groups of users retain over time. The critical signal is the shape of the curve. A curve that flattens (stops declining) at a healthy level indicates product-market fit for that cohort. A curve that continues declining without flattening indicates a fundamental value problem.
Compare cohort curves over time. If newer cohorts retain better than older cohorts, your product improvements are working. If older cohorts retain better, you may have a quality regression or an onboarding degradation.
Building Your PLG Metrics Dashboard
With all these metrics, the temptation is to build a 50-metric dashboard that nobody looks at. Resist that temptation. The most effective PLG dashboards follow a tiered approach.
Tier 1: Executive Dashboard (5 metrics)
These metrics are reviewed weekly by product leadership and monthly by the executive team. They provide the high-level health check of the PLG motion.
1. Signup rate (acquisition health)
2. Activation rate (onboarding health)
3. Free-to-paid conversion rate (monetization health)
4. NRR (expansion and retention health)
5. DAU/MAU ratio (engagement health)
Tier 2: Product Team Dashboard (10-15 metrics)
These include the Tier 1 metrics plus supporting metrics for each stage. The product team reviews them weekly to diagnose issues and identify improvement opportunities.
Tier 3: Feature-Level Metrics (variable)
Each feature or experiment has its own metrics tied to the PLG stage it targets. These are reviewed by the team working on that feature and rolled up into the Tier 2 dashboard as supporting evidence.
PLG Metrics and Product Strategy
PLG metrics do not exist in isolation. They should directly inform your product strategy and roadmap. When activation rate drops, that is a strategic signal to invest in onboarding. When NRR exceeds 120%, that is a signal to invest more in expansion features.
The connection between metrics and strategy is where many PLG teams struggle. They track the metrics but do not have a systematic process for turning metric signals into strategic decisions. The solution is to embed PLG metrics into your regular strategy reviews and OKR planning.
Each quarter, review the PLG funnel metrics and ask: which stage is the biggest constraint on growth? That constraint should receive the majority of your engineering investment for the quarter. If activation is 15% and free-to-paid conversion is 25%, improving activation from 15% to 30% will have a much larger revenue impact than improving conversion from 25% to 30%.
This constraint-based approach to PLG investment ensures that your product roadmap is directly driven by your growth metrics, not by stakeholder opinions or competitive anxiety. For more on building roadmaps grounded in data, see our guide on evidence-based product roadmaps.
Common PLG Metric Mistakes
Mistake 1: Vanity Metrics
Total signups, page views, and registered users are vanity metrics in a PLG context. They feel good but tell you nothing about whether users are finding value. A product with 100,000 signups and 2% activation is in far worse shape than one with 10,000 signups and 40% activation.
Mistake 2: Measuring Too Late
Many teams focus on lagging indicators like churn rate and NRR while ignoring leading indicators like activation rate and engagement depth. By the time churn shows up in the numbers, the problem occurred weeks or months ago. Build your dashboard around leading indicators that let you intervene before problems become permanent.
Mistake 3: Ignoring Segmentation
Aggregate metrics hide important patterns. Your overall activation rate might be 30%, but if enterprise users activate at 50% and SMB users activate at 15%, you have very different problems to solve for each segment. Always segment PLG metrics by customer tier, use case, acquisition channel, and geography.
Mistake 4: Confusing Correlation with Causation
If users who invite three team members retain 80% better than those who do not, it is tempting to conclude that "inviting team members causes retention" and then force every user through an invite flow. But the causation might run the other way: users who find the product valuable naturally invite others. Forcing invitations without addressing the underlying value problem will not improve retention.
The best PLG metrics are not just numbers on a dashboard. They are signals that connect directly to product decisions. If a metric does not change what you build or how you build it, stop tracking it.
How Fygurs Applies PLG Thinking to Transformation
While Fygurs operates in the enterprise transformation space rather than traditional B2B SaaS, PLG principles deeply inform our product design. Our readiness assessment is designed to deliver immediate value: product leaders get actionable maturity insights from their first assessment, not after months of consulting engagement.
We track our own activation metrics rigorously. When a user completes their first assessment and sees their maturity scores benchmarked against industry peers, that is our activation milestone. When they use those scores to generate prioritized initiatives, they have reached deep engagement. When they bring the results to their leadership team, they have become an internal champion.
The PLG metrics framework applies regardless of your product category. The specific metrics will differ, but the underlying principle is universal: measure value delivery at every stage of the user journey, and invest where the biggest constraints are.
See how Fygurs measures and delivers value through every stage of the transformation assessment workflow.
