Depending on the stage that you’re in you’ll want to concentrate on different metrics. The main element message of the chart is that in the beginning you can concentrate on a small set of metrics, but as time goes on and you’re making improvements you need to include additional KPIs to your stickpit. Let’s have a closer look at each one of the three phases. User feedback: A lot of the user feedback that you gather in this phase is qualitative rather than quantitative, but if you talk to a larger variety of potential users you could also have the ability to add some quantitative elements.
For example, you could ask users to rate your prototype and see if that rating goes up over time. Waiting list signups: When you set up a website landing page to gather email addresses for your waiting around list, track how many signs you’re getting. Driving signals probably isn’t an integral priority for you at this stage but it’s an indication appealing in your product and hey, you’ll still have some space on your Geckoboard which you can fill with a nice chart!
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Once you let potential customers to try your product, the real fun begins. At that true point, you should track signups and some indicators for activation and usage, which, for obvious reasons, are precursors to your ultimate goal, paying customers. What the right indications for activation are depends on the kind of your product. Maybe it’s a profile conclusion and the setup of a personalized pipeline in case there is a CRM program, installing a tracking snippet for a Web analytics product or… you get the theory.
Similarly, use metrics are highly specific to the application, so think about what the right occasions and variables are in your particular case and ensure that you instrument your application accordingly. In case your solution is a little more enterprise and you’re dealing with a higher-touch sales model, you may even want to track certified leads along with trial signups. In order to succeed you need happy customers who do free marketing for you, otherwise customer acquisition will be an uphill fight. Therefore opt for regular Net Promoter Score (NPS) surveys. If you’re looking for the best survey tool, A suggestion is had by me for you.
As you’re gradually addressing product/market fit and beginning to get the first paying customers (yay!), your trial-to-paid conversion rate becomes one of the very most vital metrics. It’s hard to offer a benchmark, as your conversion rate not only depends on the grade of your product and the onboarding experience but also on a great many other things such as leads quality, prices, and a great many other factors. Important is your retention Equally, usually monitored by measuring churn (the inverse of retention), as your CLTV (customer lifetime value) is a primary function of how much you charge your visitors and how long they stay on board.
As an extremely rough guideline you should attempt to really get your churn rate to 1 1.5-3% per month. Make sure to track churn not only on an account basis but also on an MRR basis. Your MRR-based churn rate will ideally be significantly lower than your account-based churn rate, since smaller customers tend to have a higher churn rate and because your loyal customers will hopefully pay you more and more over time.
8, mixing up regular monthly and annual programs. Finally, if you would like to obtain a good estimate of your customer lifetime, take a look at retention on the cohort basis. If you don’t have a KPI dashboard yet that provides you an at-a-glance look at your key metrics, is enough time to construct one now. A template that I’ve created Here’s, along with some additional notes.
As you’re shifting, arguably the most crucial metric becomes MRR, each month and specifically online new MRR that you’re adding. Also keep an eye on your ARPA (average income per account). It’s an important metric at all times for obvious reasons, but as you’re nearing the next thing it’s becoming even more important. 500k MRR, the biggest problem (besides growing a bigger organization and learning all sorts of growing aches of course) is to find ways to profitably acquire customers at a much higher scale.
By this time you’ve selected all the low-hanging fruits, and you may have maxed out what you can devote to AdWords to buy traffic and leads fairly. Therefore you’ll have to focus on the relationship in the middle of your CLTV as well as your CACs (customer-acquisition costs), your CLTV/CAC ratio, which measures the ROI on your sales and marketing investments.
Another way to check out it is your CAC’s payback time, which tells you how many weeks of subscription revenue it requires recoup customer acquisition costs. If I had to choose I’d choose this one, since CLTV is an estimate which can be more or less accurate always. I have a simple and general advice because of this issue don’t, I might address it in another post. If you’re not sure which metrics to track, e.g. which events in your application, err on the side of tracking too much data if you have no immediate use for it even.