Definitions of common KPIs and where they sit in a KPI tree.
Activation Rate: Activation rate measures the share of signups that reach a defined value moment. Learn how activation drives retention in a KPI tree.
Annual Recurring Revenue (ARR): ARR is the annualized value of recurring subscription revenue. Learn how ARR decomposes into the New, Expansion, Contraction and Churn waterfall.
Average Order Value (AOV): Average Order Value measures the average dollar amount spent per transaction. Learn how AOV fits into an e-commerce KPI tree.
Average Revenue Per User (ARPU): ARPU measures the average revenue generated per user. Learn how ARPU fits into SaaS and e-commerce KPI trees.
Bounce Rate: Bounce rate measures the share of single-page sessions on a site. Learn how to interpret bounce rate inside a conversion KPI tree.
Burn Rate: Burn rate is the rate at which a company consumes cash. Learn how gross and net burn fit into a financial KPI tree.
CAC Payback Period: CAC payback is the number of months needed to recover customer acquisition cost. Learn how it fits into a SaaS efficiency KPI tree.
Churn Rate: Churn rate measures the percentage of customers or revenue lost in a period. Learn how churn fits into SaaS KPI trees and ARR decomposition.
Click-Through Rate (CTR): CTR measures the percentage of impressions that result in a click. Learn how CTR sits in a marketing funnel KPI tree.
Cohort Analysis: Cohort analysis tracks behavior of user groups over time. Learn how cohorts make KPI tree retention metrics actionable.
Contribution Margin: Contribution margin is the revenue left after variable costs. Learn how contribution margin drives unit economics decisions.
Conversion Rate: Conversion rate measures the percentage of users who complete a desired action. Learn how to decompose conversion rate in a KPI tree.
Cost Per Acquisition (CPA): CPA measures the cost of acquiring a defined conversion event. Learn how CPA relates to CAC in a marketing KPI tree.
Cost Per Click (CPC): CPC is the average cost paid for each ad click. Learn how CPC drives acquisition cost in a marketing KPI tree.
Customer Acquisition Cost (CAC): Customer Acquisition Cost measures the total cost to acquire one new customer. Learn how CAC relates to LTV and where it sits in a KPI tree.
Customer Lifetime Value (LTV): Customer Lifetime Value estimates the total revenue a customer generates over their entire relationship. Learn how LTV fits into KPI tree analysis.
DAU/MAU Ratio: The DAU/MAU ratio measures daily engagement relative to monthly active users. Learn how this stickiness metric fits into a KPI tree.
Driver Tree: A driver tree is a hierarchical model showing cause-and-effect between business metrics. Learn how it compares to a KPI tree.
EBITDA: EBITDA measures operating profitability before interest, tax, depreciation and amortization. Learn how EBITDA decomposes in a KPI tree.
Funnel: A funnel models the stages users pass through from awareness to conversion. Learn how funnel metrics integrate with KPI trees.
Gross Margin: Gross margin is the percentage of revenue left after cost of goods sold. Learn how gross margin sits inside a profit KPI tree.
Gross Revenue Retention (GRR): GRR measures revenue retained from existing customers, excluding expansion. Learn how GRR and NRR differ in a SaaS KPI tree.
KPI Tree: A KPI tree is a hierarchical framework that decomposes a top-level metric into its drivers. The definitive glossary entry with links to our complete guide.
Leading vs Lagging Indicators: Leading indicators predict future performance. Lagging indicators report past results. Learn how to balance both in your KPI tree.
LTV:CAC Ratio: The LTV:CAC ratio compares customer lifetime value to acquisition cost. Learn the 3:1 benchmark and where it sits in a KPI tree.
Metric Decomposition: Metric decomposition is the process of breaking a high-level metric into its component parts. Learn how decomposition creates KPI trees.
Monthly Recurring Revenue (MRR): Monthly Recurring Revenue is the predictable revenue a SaaS business earns each month. Learn how MRR decomposes in a KPI tree.
Net Promoter Score (NPS): Net Promoter Score measures customer loyalty by asking how likely they are to recommend a product. Learn where NPS fits in a KPI tree.
Net Revenue Retention (NRR): Net Revenue Retention measures revenue retained from existing customers including expansion. Learn how NRR fits into SaaS KPI trees.
North Star Metric: A North Star metric is the single metric that best captures the value your product delivers. Learn how to identify yours.
Pipeline Coverage Ratio: Pipeline coverage compares open pipeline to the quota target. Learn the 3x rule and where coverage sits in a KPI tree.
Retention Rate: Retention rate measures the percentage of customers who continue using a product over time. Learn how retention fits into KPI tree analysis.
Return on Ad Spend (ROAS): ROAS measures revenue generated per dollar of advertising spend. Learn how ROAS decomposes in a marketing KPI tree.
Revenue Per User: Revenue per user measures how effectively a business monetizes its user base. Learn how this metric decomposes in a KPI tree.
Root Cause Analysis (RCA): Root cause analysis identifies why a metric changed. Learn how KPI trees make RCA systematic and fast.
Rule of 40: The Rule of 40 says revenue growth plus profit margin should exceed 40%. Learn how it summarizes a SaaS KPI tree.
Sales Velocity: Sales velocity measures how fast a pipeline generates revenue. Learn the four-driver decomposition that fits cleanly into a KPI tree.
Time to Value (TTV): Time to value measures how quickly a new user reaches the first meaningful outcome. Learn how TTV connects to activation and retention.
Win Rate: Win rate is the percentage of qualified opportunities that close as won. Learn how win rate fits into pipeline KPI trees.