How to Measure Success for Your Digital Product

Whether you already have a digital product in the marketplace or plan on building one, you need a plan to measure its performance. Measurements help you understand why it may be underperforming or allow you to optimize your product if it’s delivering for you.

Digital products are — and should be — ultimately measured on revenue (or attributive revenue if not sold stand-alone) and the number of customers or users. But when launching and scaling a digital product, you need faster measurements — leading indicators you can measure every day or every week instead of waiting weeks or months to look at revenue and customer trends. 

You should have a data-driven approach to guiding the early growth of that product and an accessible way to get data to understand what is happening and how to correct it. Looking ahead to how you will measure success sharpens your thinking about how you define success and what you want the product to accomplish.

It’s No Joke: A Pirate’s Take on Digital Product Measurement

Entrepreneur Dave McClure's “Startup Metrics for Pirates” concept is a good way to break down the steps to measuring digital product success. The acronym AARRR (Acquisition, Activation, Retention, Revenue, Referral) provides a framework for tracking the entire customer journey. As a result, you gain a broader understanding of your digital product's overall performance.

The AARRR concept breaks down as follows:

  • Acquisition. How do potential prospects discover we exist, and can we identify something about them? 
  • Activation. Are prospects taking steps toward becoming customers?
  • Retention. Are our customers actively using the product?
  • Revenue. Are our customers paying for the product?
  • Referral. Are our customers telling other people about the product?

These categories form a solid basis for thinking about what we want to measure as they give us a wide picture of the customer lifecycle. Good metrics help us see specifically what is working and what is not, so we can focus our efforts accordingly.

Understanding Leading vs. Lagging Measurements

When measuring your digital product, there are two types: leading measurements and lagging measurements. Both are important, but they provide different information in different timelines.

Lagging measurements are typically the things we ultimately care the most about: revenue, profit, customer renewal rates, and customer satisfaction. These measures are powerful but  broad (it is hard to tell why revenue grew or shrunk or renewal rates went up or down) and slow (you might wait months or even years to see trends). 

When measuring a digital product, you also need leading measurements: more targeted metrics that you can gather and analyze much more quickly to inform experiments and adaptation in the product, marketing, and/or business development efforts. 

The AARRR concept comprises leading metrics that work together to create a reliable measurement model. Let’s look at what they entail and how they can inform how you build, adapt, or adjust your digital product:


This measurement tells you whether your digital product has the exposure and visibility it needs to create awareness among potential customers. Acquisition metrics can vary widely based on your acquisition strategy and usually look like typical marketing metrics.

Examples include:

  • The number of unique website visits
  • The number of website visits from specific sources
  • Click through rates for search, social, and paid media

You can use this information to see whether you need to adjust your SEO, ads, campaigns, promotions, or partnerships.


Here, you are looking to measure how much your potential customers are engaging with and beginning to use your digital product. 

You should be tracking:

  • The average time on page, pages visited
  • Number of new sign-ups for newsletter
  • The number of new sign-ups for a free trial/new user accounts 

At this stage, you might expect that if you build it, they will come. But activation is the fertile middle ground between marketing and product. Without success at this step, the rest is moot. Measurements here can tell you whether you need to make tweaks to your marketing messaging (e.g. value props) or the product itself (e.g. getting started or UX).


At this stage, you gain real insights into how and whether your customers use your digital product. This can pose some of the biggest measurement challenges, including deciding what to measure and how.

Some ways you can gauge their activity include:

  • Average usage in the first 30, 60 or 90 days
  • Tracking specific behavior or usage of certain features in the product
  • Following the number of repeat visits within a certain time frame

For example, one client of ours tracked the number of videos and to-do items users completed in their first two weeks to measure retention. That helped them see if new users were engaging and think about how to build communication and UX to encourage that kind of engagement.


At this point, you should be able to see some dollars coming in the door, so you want to be able to track the trends behind them. 

Consider having the following in place to provide actionable information:

  • Conversion rate to paying customer
  • Number of new paying customers
  • Average revenue per customer

Parsing any data related to revenue can provide you with information about whether you are on track to eventually turn a profit.


Are your users telling their friends or colleagues about your digital product? Do you have a mechanism to make referrals easy or an incentive for customers to make them worthwhile? 

Try tracking the following:

  • Number of users who were referred by a user
  • Number of referred users who sign up for a trial/new account

This is an opportunity to see what kind of knock-on effect you’re getting from your existing users. You can focus on whether users are referring others and think about how to build programs and UX to encourage such referrals.

Know Where Your Digital Product Stands to Know Where It Should Be Going

Plan to measure your digital product’s success before you officially launch to make informed decisions quickly. Your digital product is too big of an investment not to know the details about how it’s performing and why. If you’d like to learn more about how Highland can set up measuring platforms and dashboards for your digital product, we’d love to hear from you.

Download “The Essential Guide to Launching a Digital Product for Experts & Expert Firms”

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