What is Growth Analytics and How to Use It to Improve Customer Acquisition

growth analytics

Wondering how you can make the most of your growth analytics to boost average revenue per user, and retention, and drive product growth?

In this article, we cover everything you need to know about growth analytics:

  • How to perform a growth analysis using an easy five-step process.
  • The growth metrics you should be tracking.
  • How Userpilot can help you leverage your growth analytics.

Let’s get started.


  • Growth analytics looks at each pillar of growth and chooses the metrics that dictate product growth and revenue.
  • Growth analytics and product analytics go hand-in-hand but are different. Product analytics measures specific in-app actions, like feature usage. Meanwhile, growth analytics is more concerned with overall user behavior, such as average revenue, conversion rates, retention rates, and more.
  • Using growth metrics helps you make better decisions that are data-driven, reduces churn, and improves customer experience, and it helps you identify high-value cohorts.
  • Growth metrics are helpful across multiple departments, especially with product teams, marketing teams, and UI/UX designers.
  • To perform growth analysis, start by segmenting your users with similar characteristics and jobs to be done. Then, set key performance indicators (KPIs) to keep track of what you’re measuring. Then you can analyze the performance of different segments and do a cohort analysis to check for product-market fit.
  • There are three main growth metrics you should be tracking: monthly active users and daily active users, retention rate, and churn rate.
  • Leverage growth analytics with Userpilot by using advanced segmentation tools to segment customers. Then, take a look at Userpilot’s user behavior analytics to track in-app behavior. Finally, act on that data to improve product adoption. Book a demo with us today!

What are growth analytics?

Growth analytics looks at all parts of the process of growth and chooses the metrics that surround product growth, including monthly recurring revenue (MRR), annual recurring revenue (ARR), cost per acquisition (CPA), conversion rates, revenue growth, and more.

Companies that prioritize growth analytics in their product growth strategy will see sustainable revenue growth.

Growth analytics vs product analytics

Let’s break down the differences and similarities between these two analytics.

Product analytics is more concerned with how users are interacting with a product. It measures how often users sign in, use certain features, complete product milestones, etc., so it’s centered around in-app behavior.

On the other hand, growth metrics are centered around general user behavior and interactions with a brand. The key metrics include conversion rates, churn rates, revenue growth, and upsells.

As you can see, growth analytics is less concerned about specific in-app behavior, and more about the overall actions of users that can promote growth.

The benefits of using growth analytics

There are three main benefits to using growth analytics:

Understanding the underlying data and making data-driven decisions

Growth metrics help you gain valuable product usage insights. You can better understand how users are using your product.

Then, use that information to make decisions that will nurture product growth.

Reduce churn rate and improve customer experience

Tracking your growth metrics also helps you find and fix friction points. These are areas where users are experiencing issues or confusion, so they don’t naturally move on to the next step. When users experience friction like this, it leads to a higher churn rate.

On the other hand, if you use growth analytics to find and fix these friction points, you’ll give a better customer experience and grow your total revenue.

Identify high-value user cohorts to target for revenue growth

Growth analytics can help you identify your high-value cohorts to bring in valuable prospects. You’ll know exactly who your target customer is based on who spends the most money, gets the most value from your product, and sticks around the longest.

Knowing this information is valuable since you can invest more of your marketing and sales strategy into attracting similar customers.

How a cohort table can plug your leaky bucket.

Who can benefit from growth analytics?

Growth metrics are valuable for product teams, marketing teams, and UI/UX designers. Here’s how they can benefit from it:

  • Product teams: Evaluate product performance, identify functional issues, and create a better growth strategy to increase the conversion rate.
  • Marketing teams: Evaluate the campaign performance to improve customer acquisition efforts and bring in quality leads.
  • UI/UX designers: Create more user-friendly experiences by tracking user behavior during a specific period.

How to perform growth analysis with data analytics?

Follow this five-step process to perform growth analysis.

Segment your users

Segment your customers with similar characteristics and jobs to be done to have a clear picture of how each segment performs.

This will also give you a better image of how different segments interact with your product.

segmenting customers in userpilot
Segmenting customers in Userpilot.

You can use Userpilot to easily segment customers based on their user attributes or in-app behavior.

Set key performance indicators

Decide on what you want to track and what “growth” means for your product. Set KPIs that will keep you on track – these can be UX KPIs, retention KPIs, customer experience KPIs, etc.

What KPIs you choose will depend on what type of SaaS you have.

Whatever KPIs you choose, make sure they are measurable. You can also set in-app goals to track your KPIs.

Analyze the performance of different segments

Set goals for your chosen KPIs and analyze how each segment is performing.

Set goals to track KPIs.

This process will help give a complete picture of how different segments are interacting with your product.

If one segment is struggling, you can give more help with in-app guidance. If another is doing well, you can ask for reviews or survey them for additional context.

Perform cohort analysis to check your product-market fit

Cohort analysis is a type of behavioral analytics that helps you see what a segment of your users (a cohort) is doing within your product.

example of a cohort analysis
Example of a cohort analysis. Source: Baremetrics.

Cohort analysis will give you actionable insights to make informed decisions to combat churn, check the product-market fit, and grow your SaaS business.

Act on the results to improve conversion rates

Cohort analysis helps you understand what kind of features you should inspire users to adopt. It can also guide your marketing campaigns. Use that information to make the necessary changes and improve conversion rates.

Growth metrics you should be tracking

Here are the three main growth metrics you should be tracking:

Monthly active users and daily active users

The active user base is a very important metric to measure growth.

One way to measure the number of active users is to calculate monthly active users and daily active users.

Monthly active users measure how many users log in to your product every month, whereas daily active users measure how many users log in every day.

Improving these figures also helps with retention since customers who use a product regularly are more likely to experience value.

Retention rate

The retention rate is an important indicator of good business health and customer satisfaction. As you increase customer retention, your customer acquisition cost decreases because you see more long-term sales to each customer.

To calculate your retention rate, first, subtract the number of users acquired during the period from the number of paying users at the end of the period. Then, divide that number by the total number of paying users at the beginning of that period. Finally, multiply that figure by 100 to get your retention rate.

user retention rate formula
User retention rate formula.

Here’s an example from a hypothetical email marketing app:

  • Users acquired during the period: 100 users.
  • Paying users at the end of the period: 450 users.
  • Paying users at the beginning of that period: 400 users.

Retention Rate = [(450-100) divided by 400] x 100 = 87.5 %

Churn rate

Churn happens when a customer cancels their account. The churn rate gives you an overall image of your business growth.

The lower the churn rate, the higher the success of your growth strategy.

To calculate your churn rate, first, divide the number of churned customers during the period by the number of customers at the start of the period. Then, multiply that figure by 100.

customer churn rate formula
Customer churn rate formula.

Here’s an example:

  • Churned customers during the period: 50 users.
  • Number of customers at the start of the period: 1,000 users.

Churn Rate = (50/1,000) x 100 = 5 %

How to leverage growth analytics with Userpilot

Userpilot makes it easy to leverage your growth analytics and create in-app experiences that benefit product growth:

Segment customers

The first step to leveraging growth analytics is to segment your customers based on common characteristics. Userpilot has advanced segmentation features that let you group customers by a dozen criteria:

  • Group customers based on their product usage habits.
  • Organize customers based on their geographic location.
  • Segment customers based on their job role.
  • Group customers based on their jobs to be done.
segmenting highly disengaged new users in userpilot
Segmenting highly disengaged new users in Userpilot.

You can also segment customers based on their previous responses in surveys. For example, if you ran an NPS survey asking customers how likely they are to recommend your product to others, you can group the high scorers vs. the low scorers.

Use analytics to understand user behavior

Userpilot’s user behavior analytics lets you track how users are interacting with your product. You can use this information to find and fix friction points. On the other hand, you can identify your power users and reach out to them with upsells.

tracking user behavior analytics in userpilot
Tracking user behavior analytics in Userpilot.

Act on data to drive growth

You can use the data to create contextual flows, or trigger in-app surveys to collect more data.

For example, if you notice that users aren’t trying out a new high-value feature, you can create an in-app flow that walks them through how to use the feature. With a mix of interactive tooltips, you can demonstrate the value of the feature and step-by-step how to use it.

creating in-app flows in userpilot
Creating in-app flows in Userpilot.


Tracking your growth analytics is endlessly valuable for boosting your overall profits. It should be a priority for every SaaS team in 2023.

Want to get started with tracking your growth analytics? Get a Userpilot Demo and see how you can track and act on data to drive growth.

previous post next post

Leave a comment