Metrics for paid products
The cost of customer acquisition is the basic cost of marketing to get customers. For example, if it takes U $ 1000 that 500 people visited the site through advertising on Google, and five of these people buy your product, then your customer acquisition cost is $ 200 (to U $ 1000/5). The cost of customer acquisition is a derivative of the cost per click (CPC) or cost to drive visitors to your product and to your conversion rate.
In many cases, before a sale is completed, you also have to measure the cost per lead (CPL) when the purchasing process to collect data about users so that you can market your product back to them.
The conversion rate is to measure the percentage of people who interact with your products and ultimately buy your product. The key is you have to explain every step of the channel conversion. As an example:
- What percentage of your site’s visitors who went before exploring your site more deeply?
- What percentage of visitors who sign your application?
- What percentage of registered users who add items to their shopping cart, or sign up for a free trial subscription you?
- What percentage of people who have added the product to the shopping cart or try a free trial that ultimately pay for your product?
Life Time Value
Lifetime Value is the sum of all payments that you would expect to obtain from the customer as long as they continue to use your product or continue shopping at your site. LTV is usually attributed to the business model of subscription with predictable income. However, LTV also serves as the average order value (AOV), where your online store selling items one by one; in this case the LTV is the expected total number of AOV (average order value).
Net Promoter Score
Net Promoter Score is the value to measure the quality of the product experience. By asking this question: “what is the likelihood that you would recommend to your friends” this way you will be able to assess the negative or positive score that describes how nice the people on your service.
Metrics for free products
KPI basis of free digital products usually consist of:
- Traffic: the number of unique visitors who use your product within specified time
- Registered Users: the number of people who sign up to use your services in which you continue to market your products to these people on an ongoing basis
- Engagement: a measure of how large and often involved the use of your product, typically measured by “the amount of time they are browsing on the site / application” and “the average number of visits”.
This is the most important metrics and the actual size of how fast your product will grow. Viral co-efficient assessed from the number (usually a decimal number) on a product to determine how many users encourage others to use the application. Viral co-Efficient with a value of 0.5 means that each user encourages others to use that application. So the first 100 users, will encourage other users to use the application (100 first users will encourage the addition of 50 new users and 50 users will encourage the use of new 25, so it goes). Viral co-Efficient with the value of one or more will have enormous power because, in theory, users will continue to grow. This metric is very important because this metric is the best predictors for measuring growth.
Cost Per Visitor
Cost per visitor is similar to the CPC (cost per click). CPV is a simple way to find the cost of the drive visitors to your free product (search engine marketing, email, social media). In many cases, you will not have the budget to constantly push thousands or even millions of visitors to a product that does not generate revenue directly. But the first thing to spend money on marketing like this had to be done because you also have to validate the value of your product. Make sure you have a low cost way to drive traffic to your website as this is an important thing in your first launch.
Continue to monitor these metrics every day or every week and look at the trend leads business, eventually you will know where you run your business.
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