Metric | Description | Stages | Business Models |
---|---|---|---|
Downloads Page Views Sessions | These do not require any explanation basically. | Prototype, MVP | All |
Note: Not actionable vanity metrics. But they are easy to measure and can be used to evaluate interest to your product at the early stages. | |||
Sign-ups | The number of users who signed up for your service (e.g., provided a piece of their personal data). | Prototype, MVP | All |
Note: Another vanity metric, but more reliable than Page Views, for example. It collects valuable data about users such as email or phone numbe, which you can use later to involve users in your funnel. | |||
New Users | The number of new users. | MVP, Scaling, Established | All |
Conversion Rate Activation Rate | Conversion rate is the percentage of visitors who take the desired action. Conversions don't have to be sales but can be any key performance indicator (KPI) that matters for your business. Activation rate is the rate at which your acquired customers become active customers by initiating an activation event. For example, a user created the first order on a platform. | All | Marketplace, IoT, Subscription-based, Aggregator |
Note: Actionable. May indicate bottlenecks in your application. Usually, Conversion Rate is measured for a sequence of actions that lead to the final desired effect (purchase in most cases), which creates a Conversion Funnel. Using Conversion Funnels is an effective way to improve the UX of your product by increasing Conversion Rates at every step.It’s important to define the desired action and activation event for your product. Some product owners define signup as their activation event which, doesn’t make a lot of sense but allows them to show impressive figures in “active users” graphs in their investor decks. | |||
Click-Through Rate (CTR) | A click-through rate (CTR) is the ratio of clicks to overall impressions. | Scaling, Established | Ad-based |
Note: Usually applied to ads like Conversion Rate of Ads. Extremely important for Ad-Based products as it reflects the actual value that Ad-Based businesses bring to their customers. Also can be measured for any other types of businesses that consider paid ads as one of their major acquisition channels. | |||
Cost per Signup | The average amount of resources you spend on a new sign-up. | Prototype,MVP | IoT, Subscription-based |
Note: Very useful in the beginning when you still validate your idea and run experiments that affect your product value assumptions. At later stages, it's better to rely on CAC or CPAU. | |||
Customer Acquisition Cost (CAC) Cost per Activated User (CPAU) | The measure of the value a customer has committed to you in contracts or orders. It does not match the revenue you get in the end though. | Scaling, Established | Marketplace, IoT, Subscription-based, Aggregator |
Note: It’s important to understand that you can measure Contracts Value if you don’t have your product ready yet. It helps to validate your business idea at the early stages. Measured vs. Revenue to see how much of contract value converts into actual revenue in the end. | |||
Virality Coefficient (K-factor) | A viral coefficient is a number that indicates how many new users a current user is referring to your business. This metric is used to measure the organic growth of a company. A viral coefficient of 0.5 means that for every 10 users you acquire (through ads, blogging, affiliates, etc.), you’re also getting another 5 on top, which lowers your cost per acquisition. So your main goal is to define a strategy on how to count the number of new users generated from the actions of your existing users. | MVP, Scaling | Ad-Based |
Note: Your growth engine to be considered viral, when your Virality Coefficient is greater than 1.0 |
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