How to measure acquisition and activation
To measure how many new customers you acquire and activate, go beyond simple vanity metrics that lack context and are disconnected from concrete goals. Digital analytics platforms like Amplitude can help you capture user data at a more granular level to illuminate the path customers take before they sign up and what they do after that point.
Each customer journey stage comes with its own set of metrics. But one metric—the North Star—stands apart. The North Star is a single, crucial metric representing your product’s value to customers. It’s a good place to start your analysis and will inform your efforts to meet your other metrics. Once you’re ready to tackle those, use this cheat sheet to evaluate the success of your acquisition and activation efforts.
Product metrics cheat sheet
Acquisition metrics, including new sign-ups, measure how many new customers you acquire as well as the costs associated with acquiring them. They are essential for evaluating your acquisition strategies, channels, and campaigns.
New sign-ups reflect the moment customers are acquired, whether through sign-ups, subscriptions, or trials. For B2B companies, new sign-ups may look like highly qualified leads who are more likely to convert. New sign-ups are a more meaningful metric than simply tracking downloads or page views because they reflect a higher level of commitment.
- How to measure: Instrument each event so your digital analytics platform can count sign-ups or other events you define as a qualified lead, such as providing a business email.
- Do it in Amplitude: Use Amplitude’s event segmentation chart to see new sign-ups. Group sign-ups by acquisition channels or campaigns.
New user growth rate
The new user growth rate refers to the rate at which new users per day, week, or month changes month-over-month.
- How to measure: Divide the average new users per day (or week or month) in the current month by the average new users per day (or week or month) last month.
- Formula: New user growth rate = (Average # of new users per day this month) / (Average # of new users per day last month)
- Do it in Amplitude: Use Amplitude’s event segmentation chart to determine how new user growth changes month-over-month.
- Benchmark: 4.8% for daily new user growth rate, according to Amplitude’s benchmarking analysis of more than 2,000 companies across industries and geographies.
Customer acquisition cost (CAC)
Your customer acquisition cost measures how much your business spends to gain new customers. Costs include marketing, advertising, and sales. The lower your CAC, the less it costs to scale.
- How to measure: Divide the total amount invested in acquisition by the number of customers gained over the same period.
- Formula: CAC = Total acquisition costs / Total acquired customers
- Do it in Amplitude: Use Amplitude’s data tables chart and ad network integrations to determine how much it costs to acquire customers. Compare your CAC with your CLV—how much revenue each customer generates for your company throughout their lifetime as a customer—with Amplitude’s revenue LTV chart.
Return on ad spend (ROAS)
Return on ad spend reflects how much your business earns for every dollar spent on a marketing campaign. It’s a critical tool for prioritizing your campaigns and channels.
- How to measure: Divide the revenue generated by a campaign by the cost of the campaign.
- Calculation: ROAS = Total campaign cost / Campaign revenue generated
- Do it in Amplitude: Import ad network data and view it alongside conversion data to see your ROAS.
Activation metrics such as activation rate and time to activate indicate how well you are moving customers from acquisition through that critical aha moment where they discover why your product is valuable to them and, in turn, provide value to your business.
The activation rate is the rate at which customers find their aha moment. This metric is useful for identifying the most effective acquisition channels and onboarding flows.
- How to measure: Divide the number of customers who complete your critical activation event by the number of customers who signed up to use your product.
- Calculation: Activation rate = Customers who trigger activation / All customers
- Do it in Amplitude: Use Amplitude’s funnel analysis chart to see what percentage of your customers reached your critical event.
- Benchmark: 6.8% for day-seven activation, according to Amplitude’s benchmarking analysis.
Time to activate
Time to activate measures how long it takes to move customers through the onboarding flow from acquisition to activation. This is a critical metric; the longer it takes to activate your customers, the longer you wait to see loyalty and lifetime value. And, likely, the lower your activation rate will be.
- How to measure: Amplitude can show you which steps customers take and when on their journey from acquisition to activation.
- Do it in Amplitude: Use Amplitude’s journeys chart to see customers' most common paths through your product. Analyze the time to activate for each path, then consider what incentives could move them to activate faster.
Free-to-paid conversion rate
The free-to-paid conversion rate represents the number of users who convert from free trials to paid subscriptions. This is an important indicator for determining whether users are activating and deriving enough value from your product to pay for it—and if your business is on a profitable path.
- How to measure: Divide the number of people who converted from a free trial to a paid subscription by the total number of free trial users.
- Calculation: Free-to-paid conversion rate = Paid customers / Free trial users
- Do it in Amplitude: Use Amplitude’s funnel analysis chart to measure the conversion rate for free trial users.
Discover 15 product metrics and how to measure them in the Product Metrics Guide >
- Use Amplitude’s North Star Statement Exercise to determine the inputs that make up your North Star.
- Drill down into the metrics that matter most for acquisition and activation by exploring the charts in Amplitude’s product metrics dashboard.
- Record your key adoption metrics with the Digital Product Adoption Report Card worksheet and use the results to create a dashboard with a free Amplitude account.
- Compare your metrics with benchmarks across industries and companies of different sizes with Amplitude’s Product Benchmark Metrics.