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Metrics to Measure Success in User Success

April 17, 2017

User Success and Measurement Tools

Measuring your success in business takes many forms. The most common ones are financial: share price, earnings, return on investment, and dividend growth. One of the most overlooked aspects of measuring your achievements is user success. The loyalty of your client base is arguably the MOST important factor in your ability to survive and thrive in your industry or field. Below, we’ll help you understand some of these new measurement tools and how they can impact your analytics and decision-making. In the past two decades, marketers and business analysts developed new tools to track your success and engagement with your users. Whether you offer products or services, you can use these metrics to track and improve your brand loyalty and overall company results.

Net Revenue Growth (NRG)

It’s a simple metric, but “net revenue growth” is a powerful tool to judge your progress as an organization. Net Revenue is your Gross Sales minus your Cost of Sales (aka COGS), and the growth is the factor comparing across periods. Net Quarterly Revenue Growth is a shorter period than Net Annual Revenue Growth. You want your NRG to be a positive number – this means you are driving more sales per unit of cost of goods/services provided. If this number starts to fall or even dip into negative territory, you have a problem in your sales channel that needs immediate attention.

Net Promoter Score (NPS)

Customer loyalty is one of the most important parts of maintaining a good brand reputation. To track this subjective metric, companies often rely on survey results and focus group reports. Fred Reichheld of Bain & Company developed NPS to help quantify customer satisfaction for one of his clients at Bain. He surveyed customers by asking the question “How likely is it that you would recommend our company/product/service to a friend or colleague?” and gauged the results between 0 and 10. Respondents with scores between 0 and 6 are Detractors, 7s and 8s are Passives, and anyone with a score of 9 or 10 is a Promoter. Each grouping is usually described as a percentage of total respondents within each category (e.g. 25% Detractors + 40% Passives + 35% Promoters = 100% of Respondents) The true value in these scores is the behaviors they indicate. Detractors are just as they sound, those who would provide negative word of mouth and are at risk of reducing their usage or completely defecting from your company. Passives are neither hot nor cold, but are not doing you many favors in terms of referrals or case studies and are a moderate churn risk. While Promoters are most likely to recommend your products, participate in Case Studies and promote your brand to others. NPS is a powerful tool to help you understand your brand loyalty. When you design new products and customer support systems, NPS can guide your decisions with a focus on good customer engagement.

Customer Adoption Curve

With any product or service, there is a typical lifecycle from the first sale to the final one. It doesn’t matter if you offer products or services – this curve probably applies to your business. The basic principle is your customer are divided across time. Innovators (2% of total customers) and Early Adopters (13%) are the first people to try a new product or service. These people don’t represent the mass market, but they can explode the popularity of your products and services if you capture their attention early in your lifecycle. After the early stage, you enter the mass market of the Early Majority (35%) and the Late Majority (35%). The space between the two Majorities represents the peak of the Adoption Curve. Finally, you have the Laggards (15%) bringing up the rear. The maximum profit opportunity lies in the Early Adopter and the beginning of the Early Majority stage. Here, you have the start of mass market adoption without too much threat of competition. By the time you reach the peak of the curve between the Early and Late Majorities, you are bound to face significant competitive threats from other firms. The Customer Adoption Curve is a valuable tool to help you understand your customers and how they relate to your products. If you can’t match the lifecycle stage for your customers to each of your products and services, that’s a good place to start building your understanding of the Customer Adoption Curve.

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