1. Acquisition

   Acquisition refers to all of the channels you use to introduce people to your product. This could include:

   • SEO
   • Social media
   • Marketing campaigns
   • Apps and widgets
   • Advertising

2. Activation

   Activation refers to users taking the desired actions, or next steps, after their first encounter with your company’s product, website, or content. For example:

   • Visiting additional pages
   • Experimenting with additional features
   • Spending a given amount of time on your site or app
   • Signing up for your newsletter
   • Signing up for your free trial

3. Retention

   After you’ve “activated” new users by persuading them to take action, you’ll want to monitor how many of these users are continuing to show interest in your product. They might do this by:

   • Returning to your product repeatedly over a given timeframe
   • Returning to your website
   • Opening your company’s emails
   • Signing up for your RSS feed

4. Referral

   This refers to users introducing your company or product to friends and coworkers. These are some of the most difficult metrics to track because people use all sorts of ways to tell others about apps and businesses. But you can set up tools and campaigns to track referrals, such as:

   • Emails with referral promotions embedded
   • Referral contests
   • Other marketing campaigns designed to make it easy to share the product with others

5. Revenue

What’s the best way to increase revenue? By increasing your Customer Lifetime Value (CLV) and decreasing your Customer Acquisition Cost (CAC). A good ratio of CLV to CAC for growth is 3:1

It will help you understand whether or not your costs for acquisition, activation, and other efforts result in profitable growth. You’ll want to know, for example, how to define users who are generating:

• Minimum revenue
• Break-even revenue
• Revenue that exceeds the customer acquisition cost.