📧 ⛄️ 📺 Sweet bitterness of the product: in what metrics to work? 🙇🏻 🏇 😵

“Ah, it’s not difficult to deceive me! .. I’m glad to be deceived myself!”

In these lines of Pushkin is the pain of those who use biased analytics. Beautiful numbers do not guarantee sales, so it’s important to use true metrics. Which ones are described in detail in the article.

80,000 subscribers, 800 downloads and 700 likes - these are numbers that are pleasant to shake before the public, from leadership to customers. What is hidden behind such an analysis?

Such indicators as the number of registrations and views, the size of the group and the email database are “vanilla metrics”, self-deception metrics. Everyone likes to use them: from company executives to line managers.

"Vanilla" are any non-objective indicators. In contrast, they use Actionable Metrics - metrics that you can trust and make decisions based on them.

What is the difference between these metrics? Let's look at the main ones:

1. Trial Users shows how many people are on the service. This metric should not be seriously considered, since:

these users may not bring money,
the company’s service may not be of interest to them (“caught up” audience).

Trial Users - key indicators for platforms that earn through advertising. But now, views are beginning to recede into the background, more important is the pay-per-action. The Trial Users metric is a lack of technology that does not allow you to see real activity on the site.

Correct metric: Converting Users shows how many people have converted to a useful action or purchase.

2. Page Views - not indicative: it is not known whether bots or living people are viewing pages.

Correct metric: Conversion Rate - go to the site, purchase, etc.

If the user bought the goods only 2 days after visiting the site - Conversion Rate is measured taking into account such factors. For example, you can put a tracker on a banner and immediately see if there are any transitions from it. Brand traffic can work differently and takes longer.

The product manager must distinguish the “vanilla” metric from the real one so as not to jeopardize the money of the company and its career. “Vanilla” metrics are a great way to dust your brains and get negative.

The main enemies and friends of the product in analytics

3. Social Media Likes - everyone likes social media likes, but the product is not a Penza schoolgirl: he cares about the Social Media Engagement / Referrals indicator - how many people clicked on the referral link and how these people are involved (left a request, etc.) . The first metric is irrelevant, because likes are difficult to translate into payment.

4. Email Subscribers - the number of subscribers, of which there may be millions in the database, for which the company also pays. For the product, the Email Opt-In Conversion Rate metric is important - users who open letters and leave a request.

5. Leads in Sales Funnel - a deceptive metric with users who are “caught up” by marketers. The irony is that of the 10,000 “driven” no one makes a purchase.Cohort Analysis of Sales Funnel - as opposed to using the indicator "daily changes in the sales funnel", only a high-quality audience is taken as the basis.

6. Marketing Spend - money spent, and Return on Marketing Investment - how much money the product manager returned to the company.

You can get a lot of money from the user, but spend 2 times more on it.

How to count the "return" budget after marketing activities?

For example, a conference is held for teachers in Skyeng - the cost of attracting teachers and the payback of the event itself are known. We need to study the number of leads and the time that the teachers stayed in the company, because they don’t need those who leave Skyeng in two weeks.

How to check the Leads in Sales Funnel metric when marketing is allocated money to attract an audience, but no user buys anything?

If the marketing department leaves a request in the system, then this can be tracked. Some analytics systems may show different audience parameters. For example, if a company offers services in Moscow, then in Leads in Sales Funnel you can see that there is unnecessary traffic coming from the regions.

Tracking users in the funnel:

n people go to the landing
n people submit applications
n people agree on something.

If n has dropped dramatically - to look for a problem in traffic - most likely the marketing department is “catching up” with irrelevant users.

7. Another “vanilla” metric of Monthly Revenue per Customer is the monthly revenue from one user, useful only if you look at it by the ratio of money invested in a client and profit received. Opposes her Customer Lifetime Value - a metric that shows the "lifetime" value of the client.

How to calculate LTV (Lifetime Value) and understand that the user has become obsolete if he could just take a break?

On the dynamics: to accumulate a certain number of users, build a graph and look at the progress / regression. If the service is designed for a weekly visit, pay attention to how much time a person did not use it. If the service is more complex, for example, Aviasales or a site with the purchase of real estate, then the user can not access it for more than a year.

The LTV metric is considered long-term. You can wait a whole year to see if Lifetime has changed. The average customer lifespan (Lifetime) in Skyeng is 2-3 years. Products do leading metrics to see if the user has bought a subscription a second time or not.

- If 70% of people made repeat purchases, then their behavior will remain approximately the same.

If next month the figure dropped to 50%, then the percentage of repeat purchases will probably decrease further.

How to measure the performance of domestic products?

In money: how much the domestic product was useful to the outside and what profit it brought.
By quality indicators: how customers are satisfied with the product - for example, in NPS (Net Promoter Score).

Use the correct (Actionable) metrics and you will be happy (and money)!

Want to learn more about metrics? On Wednesday, April 29 at 19:00 (Moscow time), we conduct a free online intensive "Simple words about metrics." Together with Mikhail Morozov, Analytics Team Lead in Skyeng, we will discuss what metrics a product has.

Find out more and register!

Sweet bitterness of the product: in what metrics to work?