Home / Phase-6 / Defining Success Metrics (Activation, Retention, LTV, Churn)
Phase 6
Defining Success Metrics (Activation, Retention, LTV, Churn)
Defining success in product management goes beyond shipping features or driving top-line growth—it requires tracking the metrics that truly reflect customer value and business sustainability. This module focuses on four foundational metrics: Activation, Retention, Lifetime Value (LTV), and Churn. Together, they provide a full picture of whether customers are reaching value, staying engaged, generating profit over time, or leaving the product altogether. You’ll learn what each metric means, how to calculate it, and how PMs can use them to diagnose health, prioritize improvements, and tell a compelling growth story to stakeholders.
Why Success Metrics Matter
Metrics provide clarity for teams, reveal friction points in the customer journey, balance growth with efficiency, and offer proof of sustainable growth to executives and investors.
The Core Success Metrics
Activation
The moment users first experience the core value of your product (“aha!” moment). It's a leading indicator of retention and revenue.
Retention
The ability to keep customers engaged and paying over time. High retention compounds revenue and reduces reliance on new acquisition.
Customer Lifetime Value (LTV)
The total net revenue a customer is expected to generate. It indicates long-term profitability and which segments deserve prioritization.
Churn
The percentage of customers or revenue lost in a given period. Churn erodes growth and is often the clearest sign of weak product-market fit.
Putting the Metrics Together
Activation, Retention, LTV, and Churn form a connected chain. Weak activation drags down retention, low retention reduces LTV, and high churn suppresses growth. Success requires optimizing the entire system, not just one metric in isolation.