Definition
Product-market fit means your product reliably solves a real problem for a defined segment, shown by strong retention and efficient growth.
Example
Retention curves flatten after month 3 for a core segment and expansion accelerates without heavy discounts.
How to use it
- Retention curves are one of the clearest quantitative PMF signals.
- PMF is segment-specific; measure by cohort and segment, not blended averages.
- Combine qualitative feedback with cohort retention to confirm fit.
Common mistakes
- Treating revenue growth as proof of PMF without retention proof.
- Assuming PMF in one segment means PMF in all segments.
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "Product-market Fit (PMF)" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Sanity-check with a related calculator from the same category on MetricKit.
- Read the related guide (e.g., Cohort analysis playbook: retention curves, LTV forecasting, and payback) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Gross Margin Impact Calculator: Quantify how gross margin changes affect gross profit LTV, payback, and LTV:CAC (before vs after).
- Pricing & Packaging Guardrails Calculator: Set guardrails for pricing changes by translating ARPA, margin, churn, and target payback into max discount and min price targets.
- CAC Calculator: Calculate Customer Acquisition Cost (CAC) from total acquisition spend and new customers.
- Fully-loaded CAC Calculator: Calculate fully-loaded CAC by including paid spend plus sales & marketing costs (salaries, tools, and other acquisition costs).
- LTV Calculator: Estimate customer Lifetime Value (LTV) using ARPA, gross margin, and churn rate.
Guides
- Cohort analysis playbook: retention curves, LTV forecasting, and payback: A practical cohort analysis workflow: build retention curves, forecast LTV, and translate retention quality into payback and growth decisions.
- Retention & churn hub: cohorts, GRR/NRR, and retention curves: A practical hub for retention measurement: churn rate, GRR/NRR, cohort retention curves, and how to set retention targets without getting misled by noise.