The Metrics That Matter: How to Track PLG Success

👋 Welcome to Inspired Momentum!

Product-Led Growth (PLG) thrives on data-driven decision-making, but not all metrics are equally valuable.

Many teams get lost in vanity metrics—signups, page views, downloads—instead of focusing on the numbers that actually drive growth.

So, which PLG metrics really matter, and how can you use them to optimize your strategy?

In this issue, we’ll cover:

1. The core PLG metrics every company should track.

2. How to measure & improve them.

3. Real-world examples of companies using data to scale.

Let’s dive in! 🚀

The 5 PLG Metrics That Drive Growth

1. Activation Rate → Are New Users Finding Value?

   What it is: The percentage of users who complete a key action that shows they’ve experienced the product’s value.

   💡 Example:

   • Slack: Sending the first 10 messages.

   • Dropbox: Uploading the first file.

   ✅ How to Improve It:

   • Simplify onboarding → Reduce friction in signup & first-use experience.

   • Guide users to “Aha!” moments → Highlight core features early.

   🔍 Tool to Track: Amplitude, Mixpanel, Heap

2. Retention Rate → Are Users Sticking Around?

   What it is: The percentage of users who return after a set period (e.g., Day 7, Day 30).

   💡 Example:

   • Duolingo’s daily streaks increase retention.

   • Netflix optimizes content recommendations to keep users engaged.

   ✅ How to Improve It:

   • Create habit loops → Encourage repeat interactions (notifications, streaks).

   • Use lifecycle emails & nudges → Bring back inactive users.

   🔍 Tool to Track: Mixpanel, Segment, Google Analytics

3. Product-Qualified Leads (PQLs) → Who’s Ready to Convert?

   What it is: Users who have engaged with the product enough to be prime upgrade candidates.

   💡 Example:

   • Zoom: Free users who hit the 40-minute call limit.

   • HubSpot: Users who track a certain number of leads before upgrading.

   ✅ How to Improve It:

   • Identify key engagement thresholds → Define what behaviors indicate high intent.

   • Use automated in-app nudges → Prompt upgrades at the right time.

   🔍 Tool to Track: HubSpot, Salesforce, Amplitude

4. Expansion Revenue → Are Existing Users Upgrading?

   What it is: Revenue growth from upsells, add-ons, and increased usage.

   💡 Example:

   • Figma’s team-based pricing scales as organizations grow.

   • Notion converts individual users into paid business accounts.

   ✅ How to Improve It:

   • Offer scalable pricing tiers → Align price with usage.

   • Introduce team-sharing features → Drive bottom-up adoption.

   🔍 Tool to Track: Stripe, ProfitWell, ChartMogul

5. Viral Coefficient → Are Users Driving Growth?

   What it is: How many new users each existing user brings in through referrals.

   💡 Example:

   • Dropbox’s referral program (give & get free storage).

   • Calendly’s viral loops (every meeting booked introduces a new user).

   ✅ How to Improve It:

   • Build sharing into the product → Encourage invites & referrals.

   • Reward referrals → Incentivize word-of-mouth growth.

   🔍 Tool to Track: ReferralCandy, Google Analytics

Case Study: How Slack Used PLG Metrics to Scale

Slack obsessed over activation & retention, ensuring teams:

✅ Sent 2000+ messages (key activation metric).
✅ Had multiple team members engaged (improving retention).
✅ Created viral growth loops (team invites).

🎯 The Result? Slack grew from zero to $1B+ ARR without a traditional sales funnel.

🚀 Your Takeaway: Define your key activation event and optimize your product around it.

💡 Quick Wins to Improve PLG Metrics Today

✅ Identify your product’s activation moment → When do users first see value?
✅ Track & reduce churn triggers → Where do users drop off?
✅ Optimize your pricing model for expansion → Are users naturally upgrading?
✅ Test referral & viral loops → How can users bring in more users?

📣 Let’s Talk!

What’s the most important PLG metric for your company? Reply to this email—I’d love to feature your insights in a future issue!

Until next time,
Filippo

P.S. Know someone who needs better PLG tracking? Share this issue with them! 🚀