Citrusbyte: Data Driven Design
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This document discusses strategies for using metrics effectively. It recommends: 1. Avoiding "vanity metrics" that don't reflect business progress, like page views or followers, and instead using "actionable metrics" tied to specific actions and results, like customer lifetime value or churn. 2. Analyzing "unit economics" like acquisition, activation, retention, revenue and referral rates for customer cohorts over time to understand business fundamentals. 3. Giving metrics "power" by creating a continuous feedback loop, focusing on customer needs over features, and making metrics actionable, accessible and auditable.
Citrusbyte: Data Driven Design
- 2. MOST PRODUCTS FAIL RAISED LOTS OF MONEY TONS OF USERS HIGH TRANSACTION VOLUME
- 5. On September 22nd, 2015 Quirky Declared Bankruptcy
- 6. What can we learn from looking at companies like Quirky?
- 7. How can you chart the unknown territory of innovation?
- 8. How do todays growth companies use metrics to stay ahead?
- 9. DATA STRATEGIES The right data strategy is transformative for your product, people, and business
- 10. 1. Avoid “Vanity” Metrics DATA STRATEGY
- 11. SYMPTOM 1 VANITY METRICS Vanity metrics are designed to make you feel good
- 12. SYMPTOM 2 VANITY METRICS Vanity metrics are not tied closely to business progress
- 13. SYMPTOM 3 VANITY METRICS Vanity metrics are typically defined as raw numbers
- 14. The problem with vanity metrics: Image from https://blog.kissmetrics.com/throw-away-vanity-metrics/
- 18. Vanity metrics examples: • Pageview count • Website hit count • Total registered users • Number of unique visitors • Number of followers/friends/likes • Time on site/number of pages • Emails collected • Total downloads
- 19. Who do we measure meaningful and actionable information?
- 20. 2. Use “Actionable” Metrics DATA STRATEGY
- 21. ACTIONABLE METRICS Actionable metrics tie specific and repeatable actions to observed results
- 22. SYMPTOM 1 ACTIONABLE METRICS Actionable metrics are commonly represented using funnels, cohorts, or A/B testing
- 23. SYMPTOM 2 ACTIONABLE METRICS Actionable metrics are high level enough to point in the direction of a problem (but not solve it)
- 25. Actionable metrics examples: Metric Types: • A/B Testing • Per-customer metrics • Cohort analysis • Funnel analysis Examples: • Customer Lifetime Value • Customer Acquisition Cost (paid/ blended) • Active Users (per time period) • Churn • Month-on-month growth
- 26. Vanity Metrics Actionable MetricsVS • Raw numbers like page views • Don’t represent business progress • Don’t represent customer value • Tie actions to results • Per-customer or cohort • Often represent value creation
- 27. How can you start small today?
- 28. 3. Unit Economics DATA STRATEGY
- 29. What are unit economics?
- 30. Pirate metrics Acquisition Activation Retention Revenue Referral How do users find you? Do users have a great first experience? Do users come back? How do you make money? Do users tell others?
- 31. Cohort Analysis Retention (50) Retention (100) Acquisition (1000) Activation (300) Revenue (10) Referral (5) Acquisition (1000) Activation (300) Revenue (20) Referral (10) Acquisit Activatio Retentio Revenu Referra Week 1 Week 2 Week
- 32. Simple & Easy to Track
- 33. 4. Give Metrics Power DATA STRATEGY
- 34. 1. Create a build-measure-learn loop Image from http://leanstack.com/how-we-use-lean-stack-for-innovation-accounting/
- 35. 2. Take a step back from features
- 36. 2. Take a step back from features Ideas to increase customer engagement
- 37. 3. Use the three “A’s” Actionable Accessible Auditable
- 38. 1. Avoid “Vanity” Metrics 2. Use “Actionable” Metrics 3. Unit Economics 4. Give Metrics Power