I’ve got one word for you:
Did you cringe? If you know your instant messaging app history well, then you probably did.
It was 2009 when HipChat was released, and right from the start, it seemed an instant success. Within the first four months, it managed to get 1,000 companies using the tool. It had many features that made it unique and more user-friendly for team chats.
All seemed well in the HipChat world until 2013 — the year Slack was released.
For a while there, HipChat still had more users, but by September 2014, Slack had conquered, and a search on the web will show you just how much.
HipChat is no more, crushed under the weight of Slack’s continuing success. They seemed like they’d be that unicorn, that diamond in the rough. But in the end, they didn’t keep up with what people wanted.
Slack offered what people wanted. A free version, deep integrations, and some psychological tactics that kept people returning to the app to make sure they were caught up.
What’s the lesson?
When measuring HipChat by conversion-based metrics, they seemed like an unstoppable Goliath. But much like the biblical giant, they met an untimely fate for underestimating the importance of listening well to their customer needs.
Measuring your products’ success can’t be solely founded on conversion-based metrics; they must focus on the customer too.
You and I both know that there are a lot of metrics worth tracking.
However, even when you think you’re creating the product your customers want, if you aren’t tracking the right metrics, you’re missing out on the full picture of user insights, which could point you in the wrong direction.
Customer-Centricity: It’s Harder Than You Think
Did you know the idea of customer-centricity started to gain some traction during the ’60s?
Even back in the “good ol’ days,” corporations recognized the need to create products that solve real problems and meet the needs of paying customers.
And now here we are sixty years later in a world vastly different from the 1960s, and we’ve learned two things about customer-centricity:
- It’s even more important now than it was before.
- The pace of the market is so fast that it’s hard to stay aligned with customer needs — especially if you measure the wrong metrics.
Most businesses all like to say they’re customer-focused.
But they tend to create KPIs that lead them to fall into the pattern of measuring interactions and how they relate to business health.
Companies who do this end up calculating their products’ success based mostly on business results (signups, sales, etc.), which translates into being business-centric — not customer-focused.
It’s not all bad, though. There’s an obvious need to track metrics and KPIs that are business-based.
However, to get customer-centric, we must also consider adding what Harvard Business Institute calls Customer Performance Indicators (CPIs) to the mix. These CPIs track metrics that help your company focus on an outcome important to your customers.
And to do that well, there are a few very important non-conversion-based metrics worth tracking.
The most important metrics you need to track aren’t the ones you think
If you think of conversions to your product being like getting someone to agree to go out on a date with you, then non-conversion metrics would be like the body language that you’d pick up on during that date to tell you if it was going well or not.
While it’s exciting to get someone to go on that “date” (i.e., using your product), they could be having a terrible time using that product because you didn’t pick up on the digital body language hidden in different metrics.
So if you want to pick up on the cues your customers are putting out there so that they stick around or keep singing up, you need to expand your views a bit.
Below we’ve outlined five metrics that you should definitely consider tracking to help you understand how your customers are using your products.
This metric is best for digital products or apps and is generally measured within three temporal windows:
- Daily Active Users (DAU).
- Weekly Active Users (WAU).
- Monthly Active Users (MAU).
Even if your product doesn’t have daily users, tracking how many use it weekly or monthly gives you a clearer view of the habit, needs, and/or usefulness the product has.
Studying this metric helps identify brackets of your most active users, which gives insights into your various demographics you could focus on for better growth.
When calculating user activity, it’s crucial to determine what your team defines as an “active” user. Is it when they login to your product? Is it when they click on a specific attribute or open a particular page?
Once your team has defined what an active user is for your specific product, you can find how many daily, weekly, or monthly users you have.
To better understand how your product is doing in your customers’ eyes, you could try this micro-survey template to figure out if you need to improve on meeting your customer needs.
2. Week #1 Engagement
The first week that someone signs up to use your product should be full of activity and regular use. If users are not actively engaging in the app during this timeline, then they’re most likely going to drop off into the ether of an inactive user.
If you’re getting a consistent amount of signups but low week one engagement, then your users are trying to tell you something isn’t working for them.
Getting to the bottom of just what that is takes some noodling:
- Is the onboarding process too hard?
- Is the product not living up to the claims made by marketing?
- Is the UI not intuitive enough?
To get answers to these questions, you need to understand what their expectations are versus their experience.
Tracking this metric could unveil innumerable insights, allowing you to improve the experience and keep users engaged and happy.
3. Time In-App
The number of times someone logs into your app probably seems like a good indicator of a happy and habitual user.
But how long do they stick around?
Tracking the time spent in-app helps you understand more about the value your app is giving your users. If they’re in the app for only a few minutes, when you know they need to spend at least 12-15 minutes, it means something needs your attention.
This action could also indicate that users have found another way of using your product in a useful way, but you weren’t aware of it yet.
4. Feature Usage
This metric is full of valuable customer insights you don’t want to lose.
Most products have various customer profiles they appeal too, with features designed to help all of them. However, some features will be used more by some than by others.
For example, ActiveCampaign is an email marketing tool with many features and attracts users of all business types and sizes.
The CRM feature isn’t the most popular one, but it’s frequently used by those with a dedicated sales team who are likely willing to pay more.
Tracking this metric for your product could reveal similar patterns and opportunities for other pricing tiers. It also tells you the most about who is using what feature.
And piece this data together with something like Time In-App could offer you insights on who your best customers are and if it’s worth spending more of your marketing team's efforts.
To help you gather your user’s thoughts around various features you’ve put out, we have this Gauge Feature Satisfaction template you can use in your app.
5. Customer Acquisition Cost (CAC)
CAC is more of a marketing metric rather than a product-related one, but it plays a part in what you’re doing too.
There’s a lot of money and moving parts that go into getting someone into your product. Everything from sales and marketing overlaps in more ways than one with what you’re doing.
For instance, the sales teams may find customers in a specific vertical take longer to convert into a user. Still, your data on their activity shows those specific customers are your most active users with the lowest churn.
Acquiring this customer may cost more upfront but generates more revenue annually than others. Boom — there’s your perfect customer/product fit!
Digging into marketing metrics like this one helps you understand what’s bringing people to the product. Your insights from other metrics show how well that’s paying off.
Keep an eye on this. It’s worth it — quite literally.
You may not have direct control over lowering CAC, but you can always take advantage of improving your product as new people come into your app. Try to gauge how users feel about the onboarding experience using this prebuilt template.
Not All Metrics Are Equal
Conversion-based product metrics have a significant role in the success of your product. But, as we’ve seen here, they’re not the only metric you should be tracking.
Metrics like the ones listed above help lend to the subtle nuances — a sort of digital body language — that help you understand the experiences of those onboarding and using your products.
All businesses are in the business of relationships.
And when you make a move to track other metrics like the ones listed here, you’ll be better equipped to build products that customers desire while keeping them coming back for more.
Need some help figuring out the right metrics for your customers? Contact Sprig for a complimentary working session with a survey expert.