Find your funnel's bottleneck

Bottleneck metrics identify the specific stage in your growth funnel that most limits overall product growth. These metrics serve as your key drivers or rate-limiting steps, and often become the natural key results for product teams to tackle. Rather than trying to improve all metrics simultaneously, focus on finding and fixing the most constrained part of your funnel.

To identify your bottleneck, calculate conversion rates between each stage of the AARRR framework and look for the largest drop-offs. Compare these metrics against industry benchmarks to determine which stages underperform relative to similar products. The stage with the largest gap between current performance and potential represents your primary bottleneck. The easiest way to do this is to create a simple spreadsheet with each funnel step and color-code it green, orange, and red based on performance relative to benchmarks. For example, consider a SaaS product's funnel: 2% signup rate, 40% complete onboarding, 35% stay active, 5% refer others, and 4% convert to paid plans. Compared to benchmarks (3%, 60%, 30%, 10%, 5% respectively), the activation stage shows the largest gap, indicating the main bottleneck.

Once identified, concentrate resources on removing this constraint before moving to the next limiting factor. This ensures maximum impact for your improvement efforts rather than spreading resources thinly across multiple initiatives that may not address the core limitation.