Monday, 2 August 2021

Measure the effectiveness of a product?

 There are 5 Product Indicators that you Need to Measure to Ensure Business Success. The customer success indicator is the primary indicator of customer success. Below are the key customer success metrics on how to measure the success of SaaS tools. In order for a business to operate successfully, business owners must evaluate their business from multiple perspectives through measurable and quantifiable numbers. These numbers are called indicators. Product success indicators are key parameters for measuring company performance in the real world. E.g. Each user of the product is just a number of the supplier. This is only the most basic information or indicators relates to the product. The more companies dig into information, the more they can diversify the types of indicators derived from customer availability patterns. These metrics are similar to the different dimensions of the business that can be viewed. Based on this multi-dimensional digital view, various functions of the company can be adjusted to improve specific areas of the company. The importance of indicators in a company can range from high priority to low priority, and actions can be taken to respond to them accordingly. For example, high-priority indicators may require a company to respond as quickly as possible within 24 hours to have an urgent impact on its performance.

Following are the indicators that a company need to take care of in order to measure the effectiveness of the products:

Customer Conversion Rate

Depending on your product marketing strategy, you may use different methods to generate potential customers for your product. Potential customers must provide their email ID to subscribe to your blog or download your e-book. The most effective and widely used strategy is to allow users to try out the demo version of your product for a limited time. This is a clear way to measure the success of the product. If the correct number of customers choose to subscribe to your product after the trial period ends, this clearly shows that your product is being developed on the right track. Therefore, the customer conversion rate can be measured as:

customer conversion rate = (conversions/total number of qualified potential customers) x 100 Although there is no fixed number that can define a good conversion rate for all types of businesses, you can define it according to your product The popularity of the category, or whether it is a B2B or B2C product, for your own niche market. However, a high conversion rate indicates that your product is easy to adapt and will soon be loved by users.

Daily active users/monthly active users

It is possible that the customer has downloaded the application but did not actively use it. To understand how often the application is used in a day or a month, use this indicator for daily active users (DAU) Yes Those who log in to your application at least once a day, and monthly active users (MAU) are those who log in at least once a month.  subscribers-total MAU percentage of healthy accounts = (total number of MAUs/total number of subscribers) x 100 Yes Health The score is low, so this clearly shows that you need to design new strategies for your users to increase the use of your product to avoid the risk of being abandoned.

Product usage

Product usage or stickinessis another term commonly used in these lines to measure the level of interaction displayed by users with your application. Its calculation method is: Stickiness = (DAU / MAU) x 100 The higher the percentage, the greater the users commitment to your product. This metric can also be used to determine the features that users use the most to understand the popularity of your application. And you can compare these data with the features used by the users that have changed to get a comprehensive view, so you can adjust your product design accordingly to better suit your customers. This indicator is a clear indicator of the degree of engagement or interaction between users and your product. Based on the number of times they log into your application during working hours, you can easily estimate how well your product integrates with your business ecosystem.

Net Promoter Score

This is one of the most commonly used product success indicators. You can use it to calculate the probability that users will promote your product to others. Its calculation method is very simple, that is, subtract the percentage of opponents (people who dont like your product) from the percentage of promoters. With short customer surveys, you can ask your users to rate your products on a scale of 1 to 10. People who give it a score of 0 to 6 are usually critics; those with a score of 7 to 8 are neutral, and the promoters are the last ones, who generally give it a score of 9 to 10. (Product Index-Promoter Net Score) Source: Altexsoft It can be said that the Net Promoter Score (NPS) is a quantifiable measure of word-of-mouth marketing. According to Nielsen’s research, “More than eight in ten global respondents (83%) said they trust the suggestions of friends and family members completely or partially. But trust is not limited to those in our inner circle. In fact, two-thirds (66%) said they believe in consumer opinions posted online. “The same goes for negative NPS. If an opponent publishes a negative review of your product online, it may have an adverse effect on your brand and may eventually lead to financial penalties. (Adoption rate) Product adoption is a process that crosses the customer journey, from the first time they learn about your product to when they become ordinary users. The adoption rate is calculated as the percentage of new users to the total number of users. For example, if you have a total of 150 users, 30 of which are new users, your adoption rate is 20%. A high adoption rate means that your product can not only identify solutions to attract customers, but also has a perfect on-boarding process. You can also measure the adoption rate based on new features to understand how long it takes for users to use a feature regularly, and based on this, you can predict changes in product design.

Product indicators are the core of the business

Although these indicators do not reveal the commercial value of products like other income-related indicators (such as monthly recurring revenue (MRR) or customer lifetime value (LTV)), the most important It is very useful in the kernel. This is why, product success is the most basic criterion for measuring the success of any business. Until you know how to use these metrics to measure product success, you won’t be able to get feedback to improve your product development strategy. Only when your product is flawless, can you take its place and stay in this rapidly changing business environment.

 

The bottom line

These are some methods to measure the effectiveness of the product!

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