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Top Metrics To Monitor For Your Startup

Launching a successful startup requires hard work, determination, and a solid understanding of which top metrics are most important. Find out more on our blog.

kokou adzo



Top Metrics To Monitor For Your Startup

Launching your own startup is no doubt exciting, but it can be nerve wracking for first-time entrepreneurs.

The statistics can be confronting. The failure rate for startups in 2019 was 90%. Recent studies show that 21.5% of startups fail in their first year, 30% in their second year, and 50% by their fifth year. (1)

Startups fail for many reasons. Owners cite lack of industry experience as a key factor in startup failure, so it’s clear that understanding your key metrics and goals is critical in the success of your business. (1)

There are many key startup metrics to consider as a business owner, however focusing your efforts on a handful of key customer-focused metrics will provide you with a solid view of your startup’s success.

1. Customer Acquisition Rate

Resources such as this online course can provide a refresher on the building blocks of creating a business; however, the first step in launching a startup is understanding who your target audience is, and how you plan to win their business.

Your customer acquisition rate tells you how quickly you’re attracting clients, and where they’re coming from.

A majority of businesses report that their most successful customer acquisition channels are through websites (89%), email (81%) and social media platforms (72%). (2)

Take note of where your most successful competitors are advertising, and consider implementing those avenues into your customer acquisition strategies to improve your rate.

2. Customer Activation Rate

Now that you’ve attracted some customers, it’s time to work out your activation rate.

Your activation rate refers to the number of customers who perform a “key action” in a predetermined amount of time; this action and time period should be set by each startup owner. As an example, you could measure the number of users who watch a video on your app within two days of download, which would indicate that they’re using your product as planned. (3)

If you’re seeing a low activation rate for your product, that could indicate barriers in user access, or that customers are not recognizing the intended value of your offering quickly enough.

Activation rates are a great way to see if users are experiencing technical issues, or not understanding the functionality of your product, allowing you to fix these issues for future customers. (3)

 3. Customer Retention Rate

Your retention rate allows you to see how many of your customers give you repeat business.

Customer retention is particularly valuable as studies indicate that 80% of your future profits will come from 20% of your existing customer base, and even a 5% increase in customer retention can improve your bottom line by 25 to 95%. (4)

It is five times more expensive to obtain a new customer than to retain a current one, so finding ways to improve your customer retention rate can significantly impact your profits. (2)

You can improve your retention rate by investigating any complaints or exit surveys from customers, and rectifying the issues that caused them to leave.

One “set and forget” way to retain customers is to implement a payment solution for subscription services which automatically retries payments and alerts customers to account issues.

Only 30% of customers are retained after a failed payment, doing everything within your power to prevent the payment failure can help improve your retention rate. (4)

 4. Customer Referral Rate

Never underestimate the power of customer referrals. Your customer referral rate can show you how word of mouth is impacting your business.

All the marketing outreach in the world can’t beat the effectiveness of peer-to-peer referrals. Neilsen reports on global trust in advertising have found that up to 93% of consumers trust suggestions from their friends and families, which is much higher than any other group they receive recommendations from. (5)

Your customers’ friends and family are likely to be in the same or similar demographic as your target customer; referral campaigns such as those offering personalized referral codes and rewards can increase your future profits.

5. Revenue

No discussion of startup success metrics would be complete without revenue.

At the end of the day, the success of your startup can be measured by whether or not it’s making money, and whether your revenue is increasing incrementally.

There are four key revenue measurement techniques which assess whether your revenue is headed in the right direction:

  • Direct tracking can be used to measure the sales increases after an email marketing campaign for a specific customer base or product.
  • Trend analysis can be used to compare sales before and after a general marketing campaign.
  • Market testing with experimental design can be used where different campaigns are used for different groups, to determine which is more successful.
  • Modeling such as marketing mix modeling can be used to determine which channels are providing better incremental sales increases. (6)

If your revenue is increasing each quarter, that is a solid sign that your startup is a success.


Diligently monitoring the right business metrics is critical to ensure you’re positioning your startup for success.

By placing a focus on your revenue and customer-based metrics, you can keep your customer at the heart of your business, increase the chances of positive customer retention, and peer-to-peer referrals improving your bottom line.


Kokou Adzo is the editor and author of He is passionate about business and tech, and brings you the latest Startup news and information. He graduated from university of Siena (Italy) and Rennes (France) in Communications and Political Science with a Master's Degree. He manages the editorial operations at

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