The document discusses key metrics for different types of digital businesses. It provides examples of metrics that matter for businesses involving e-commerce, two-sided markets, mobile apps, SaaS, user-generated content, and media. Examples include customer acquisition cost, customer lifetime value, engagement, downloads and churn for mobile apps, paid enrollment rates for SaaS, and time on site for user-generated content businesses. It emphasizes focusing on one metric that matters rather than many metrics.
4. A metric from the early, foolish days of the Web.
Hits
Count people instead.
Marginally better than hits. Unless you’re displaying
Page views
ad inventory, count people.
Is this one person visiting a hundred times, or are a
Visits
hundred people visiting once? Fail.
This tells you nothing about what they did, why they
Unique visitors
stuck around, or if they left.
Followers/ Count actions instead. Find out how many followers
friends/likes will do your bidding.
Time on site, or Poor version of engagement. Lots of time spent on
pages/visit support pages is actually a bad sign.
How many recipients will act on what’s in them?
Emails collected
Number of Outside app stores, downloads alone don’t lead to
downloads lifetime value. Measure activations/active accounts.
6. What mode of e-commerce are you?
How many of
your customers Then you are in Your customers You are just
Focus on
buy a second this mode will buy from you like
time in 90 days?
Low CAC,
1-15% Acquisition Once 70% high
of retailers checkout
15-30% Hybrid 2-2.5 20% Increasing
per year of retailers returns
Loyalty,
>30% Loyalty >2.5 10% inventory
per year of retailers expansion
(Thanks to Kevin Hilstrom for this.)
7. Eric Ries’
Three engines
Stickiness Virality Price
Approach Keep people Make people Spend revenue
coming back. invite friends. getting customers.
Math that Get customers How many they Customers are
matters faster than you tell, how fast worth more than
lose them. they tell them. they cost to get.
8. Dave McClure’s Pirate metrics
How do your users become aware of you?
Acquisition
AARRR
SEO, SEM, widgets, email, PR, campaigns, blogs ...
Do drive-by visitors subscribe, use, etc?
Activation Features, design, tone, compensation, affirmation ...
Does a one-time user become engaged?
Retention Notifications, alerts, reminders, emails, updates...
Do you make money from user activity?
Revenue Transactions, clicks, subscriptions, DLC, analytics...
Do users promote your product?
Referral Email, widgets, campaigns, likes, RTs, affiliates...
9. The five Stages of Lean Analytics
The business you’re in
E- 2-sided Mobile User-gen
SaaS Media
commerce market app content
Empathy
The stage you’re at
One Metric
Stickiness
Virality
Revenue That Matters.
Scale
10. What’s your OMTM?
E- 2-sided Mobile User-gen
SaaS Media
commerce market app content
Empathy Interviews; qualitative results; quantitative scoring; surveys
Loyalty, Inventory, Engagement, Downloads, Content, Traffic, visits,
Stickiness conversion listings churn churn, virality spam returns
CAC, shares, Inherent WoM, app Invites, Content
Virality reactivation
SEM, sharing
virality, CAC ratings, CAC sharing virality, SEM
(Money from transactions) (Money from active users) (Money from ad clicks)
Transaction, Transactions, Upselling, CLV, Ads, CPE, affiliate
Revenue CLV commission CAC, CLV ARPDAU donations %, eyeballs
Affiliates, Other API, magic Spinoffs, Analytics, Syndication,
Scale white-label verticals #, mktplace publishers user data licenses
11. Cost of customer acquisition
• CAC should be no more than 1/3 of CLV
• CLV is wrong: The customer lifetime value you’ve calculated is probably
wrong.
• Time kills all plans: It’ll take a long time to find out whether you’ve
underestimated churn or overestimated customer spend.
• CAC is wrong: The acquisition cost is probably wrong, too.
• Cashflow: Between the time that you spend money to acquire someone and
the time you recoup that investment, you’re basically “loaning” the customer
money.
• It keeps you honest: Limiting yourself to a Customer Acquisition Cost (CAC)
of only a third of your CLV will force you to verify your acquisition costs
sooner.
12. User-generated content:
Time on site per day
17
Reddit: 17
Techstars co’s: 17
Pinterest: 14
Tumblr: 21
Facebook: 60
minutes/day.
(No, really, it’s weird how often this comes up.)
13. SaaS:
Paid enrollment
No credit card No credit card, focus
Credit cart upfront
upfront on serious users
100 try it (2%) 500 try it (10%) 500 try it (10%)
50 become subscribers 75 become subscribers 125 become
(50%) (15%) subscribers (25%)
20 churn fast (40%) 15 churn fast (20%) 25 churn fast (20%)
30 customers remain 60 customers remain 100 customers remain
(0.6%) (1.2%) (2%)
• If you focus on serious users through profiling, and manage engagement during
trial/freemium, you can beat that with no card.
Totango analyzed data across their SaaS client base
