define success through actionable metrics
DESCRIPTION
You can't know what failure looks like unless you know how you're defining success. This short workshop will help you figure out if your product is having the effect that you want it to have by defining the core metrics you need to track. Actionable metrics help you to focus on the right things, know whether you're making progress, and see how your product can be improved. We'll take a look at a popular metrics framework (AARRR) and focus on the metrics that help you validate your core value proposition.TRANSCRIPT
LUXR.CO © October 2013
Define Success through Actionable Metrics
Jason Fraser
FailCon 2013
LUXR.CO © October 2013
Co-Founder VP Operations
@luxrco
itemize
LUXR.CO © October 2013
1. How many founders at the table?
2. Tell us about your product.
3. Are you tracking metrics now?
4. If so, what are you tracking?
LUXR.CO © October 2013
Metrics Frameworks
Dave McClure’s Metrics for Pirates
Luxr’s Key Product Metrics
LUXR.CO © October 2013
AARRR!
Acquisition
Activation
Retention
Referral
Revenue
http://igniteshow.com/videos/startup-metrics-pirates-aarrr
LUXR.CO © October 2013
Acquisition: How do People get to Your Product?
High volume channels
Low cost channels
High converting channels
LUXR.CO © October 2013
Activation: Are User’s Doing something with it?
Engagement with key features
Time on site
LUXR.CO © October 2013
Retention: Are They Coming Back?
Frequency of visits
Duration of visits
Increasing depth of engagement
LUXR.CO © October 2013
Referral: Are they telling others?
Discount codes
LUXR.CO © October 2013
Revenue: Are You Making Money?
Revenue per user
Cost per user (acquisition)
LUXR.CO © October 2013
Find the product and begin using it
Use it
Get something out of it
Use it again
Tell others about it
OtherAs in: Q.このさしみはなんですか。
A. ふぐとおもいます。
Luxr’s Key Product Metrics
LUXR.CO © October 2013
Acquisition
Activation
Retention
Referral
Revenue
Find the product and begin using it
Use it
Get something out of it
Use it again
Tell others about it
Other
Pirate Metrics
Luxr Key Product Metrics
LUXR.CO © October 2013
Activation
Retention
Use it
Get something out of it
Use it again
Pirate Metrics
Luxr Key Product Metrics
Focus on validating core functionality/value proposition.
LUXR.CO © October 2013
If you nail these, you know that when you put people into the funnel, they won’t just fall out the bottom.
LUXR.CO © October 2013
Write down ten things that you can measure that will tell you that your customers are using your product and experiencing its value.
Examples:
Average revenue per user
Number of shares per week
Average time on site
Prompt:
(5 Mins)
LUXR.CO © October 2013
Find your product and begin to use
it
Use itGet value from it
Use it again
Tell Others about it
Other
Set up your categories:
LUXR.CO © October 2013
Sort into categories
Choose categories based on the most important role the metric plays in your business
Throw away the outer categoriesThey don’t really tell you if you’re having the impact you want to have
LUXR.CO © October 2013
You’re left with:
Use itGet value from it
Use it again
LUXR.CO © October 2013
Choose the best metrics to focus on
Which of these metrics represent the core value of our product?
If we could drive for excellence in only 3 metrics over the next 30 days, what would those three be?
Prompt:
LUXR.CO © October 2013
Be careful of vanity metrics!
Any time you see raw numbers (rather than percentages)
Pageviews!
Context MattersWhat might be meaningless in one context, could be valuable in another
Pageviews!
LUXR.CO © October 2013
Raw numbers are meaningless
How do we turn vanity metrics into something of real value?
If the number of people who use a feature on your site goes from 200 in month 1 to 800 in month 2, that sounds great. But if the number of total users goes from 1000 to 10,000, then your actual percentage of users engaging with that feature has gone down, from 20% to only 8%.
Aggregate totals will always go up.If you look at total users for example, that will probably always grow, but looking at total new users in a given period will tell you if you’re actually growing or stalling out. Compare time periods to see the impact of your decisions over time.
LUXR.CO © October 2013
The Lessons:
Use Percentages/Ratios
Track over Time
Put it all together for the best insight:
Actions per user over time
Quantitative analysis sometimes begs Qualitative inquisition.
(quant tells you “what”, qual tells you “why”)
LUXR.CO © October 2013
Set Goals
Look at the 3 metrics you’ve chosen
What values would make you confident?
What values would cause alarm?
LUXR.CO © October 2013
Now you have some goals, and you know what success will look like. Get going!
LUXR.CO © October 2013
new.luxr.coFor workshops on stuff like this, go to