Articles

Beyond data-driven: the growth framework I use on any product

TL;DR

There is a clear growth framework I use for any product. It shows exactly where to focus.

Context

There are only 3 ways to influence revenue: acquisition, retention, monetization. Retention makes or breaks companies, and it drives both of the others.

Revenue

Acquisition

  • ICP
  • Unit-economics
  • Funnels
  • Signup-rate

Retention

  • Activation
  • Engagement
  • Resurrection

Monetization

  • Pricing and packaging
  • Conversion
  • Expansion
  • Acquisition
    • Higher retention enables higher CAC. Each customer is worth more over their lifetime, so you can pay more to acquire them.
    • Higher retention shortens payback. More of the cohort is still paying while you wait, so the acquisition spend comes back sooner.
    • Higher retention gives more referrals. Users who stay recommend the product, which brings in customers at lower cost.
  • Monetization
    • Higher retention means higher LTV.
    • Higher engagement leads to higher ARPPU.

That sets the hierarchy of priorities. The next question is how to apply it.

How to apply it

What to focus on first

  1. Is retention curve declining?Smiling curve is the target
    If yes: Create value
  2. If no, go to the next question:
  3. Is pricing value-aligned?The more engagement the higher LTV
    If no: Tie pricing to usage
  4. If yes, go to the next question:
  5. Unit-economics matches?Payback shorter than customer lifetime
    If yes: Double down on acquisition
Oleg Suvorov · Growth Product Manager
  1. Check if retention is flattening.
    1. If it isn't, focus on creating value. It is the hardest part, but you can't fake it.
    2. If the value is there, streamline time-to-value to prevent early churn.
  2. If retention is healthy, ensure the monetization baseline. Pricing must be value-aligned.
    1. The more customers use, the more they pay.
    2. The more they pay, the more we can reinvest into growth.
  3. If pricing is value-aligned, double down on acquisition.
Evergreen moves
  • Create re-engagement to prevent churn.
  • Upsell through higher engagement.
  • Increase monetization awareness through feature adoption.
  • Experiment with pricing offers.