When you have to measure the success of a product, what numbers do you look at? Recurring sales, revenue, gross profit, and some other metrics. This financial data is one way of looking at/measuring success. Another way of measuring success is via non-financial ways like user engagement and happiness! I was checking deals on the Spectrum Silver package when I stumbled upon a blog about these non-financial metrics and thought to write about them.
Even a startup can use these non-financial metrics for measuring its customer happiness and growth. Let’s look at what these metrics are and how they can help:
Happiness is a measure of understanding the attitude of your target audience towards a product or service. Happiness includes the joy a customer feels upon using your product/service or customer satisfaction after doing business.
A few ways of measuring customer happiness including measuring the product usability, how its features are working, and more. The results are based on the emotional response of the user.
NPS is Net Promoter Score, which tells if a customer would recommend your products to others. The answer to that isn’t as simple as saying Yes or No. There is an eleven-point scale where each grade represents something.
For instance, zero means the user won’t ever recommend your product to anyone. Point 10 means they are highly likely to recommend your product to others. The products with an NPS crossing 30 percent are considered successful.
Churn rate is a good indicator of how happy your customers are. This rate indicates the percentage of subscribers who discontinue doing business with an entity within a given period.
This rate is actionable because of its impact on how happy a customer is with your product. It can answer if customers like/love your product but can’t answer why they have left. If your churn rate is more than 5 percent, this means you must work on engagement.
Calculating the rate is easy. Simply subtract the number of users who left from the total number of users over a given period. If you ignore the churn rate, you are basically allowing more and more customers to find a competitor who does a better job than you.
A user engages with your product when they understand its value and how they can benefit from it. Several ways of expressing engagement exist including the number of active users, number of app downloads, session time, and so on.
Engagement tells if your customer base is likely to remain loyal to the product. By engaging with customers, you can get feedback on how to make the product better, which in turn will improve not just future product engagement but sales.
Number of Active Users
It’s one of those metrics that works well for SaaS products. The meaning of “active users” can be taken differently for different products based on parameters like frequency of visits, session length, etc. The number of active users can either be calculated daily (DAU) or monthly (MAU).
If DAU is divided by MAU and multiplied by 100%, you get a metric we call stickiness. If the stickiness ratio is higher, this means your product is sticky. Your customers are likely to stick to your product for the long haul.
Website sessions tell you a lot about the needs and preferences of your visitors. If a visitor engaged with your product and became a customer, he is likely to repeat the session again soon.
Long intervals between two different sessions could mean different things. Maybe their internet connection gave up on them. They closed the tab because they couldn’t find their credit card to complete the purpose. Or this could simply mean they weren’t happy with the product resulting in slow or low engagement.
Customer happiness and engagement metrics like these are crucial to study whether you are a startup or a large enterprise. In the present days of high competition, you must continuously measure and analyze how engaged and happy your customers are with your product. Alongside financial data, consider tapping into these metrics to make your customers fall in love with your product and continue doing business with you.