What metrics should you track to assess the success of your market validation efforts?
Herklos
4 replies
I've been struggling to determine the right metrics to track for assessing the success of my market validation efforts.
What key indicators should I focus on to ensure I'm on the right path, and how have you effectively measured these in your own experience?
Replies
Narmina Balabayli@narminablb
Hi. It's a continuous process, and I don't think you should follow metrics to see if you've found your PMF. You need to talk hella lots of people, gather feedback and refine your approach. If you've got your first 5 customers then you can expand it.
But are some key metrics you should track.
First, determine your NSM (North Star Metric) - what is the 'VALUE' your product offer? This is the primary metric that captures the core value your product gives to your customers. Famous examples of NSM: monthly active users (MAU) for Facebook, the number of nights booked for Airbnb, etc.
Next, consider these:
CAC (customer acquisition cost): how much it costs to acquire a new customer.
CLTV (customer lifetime value): the total revenue expected from a customer over their relationship with your product.
Churn rate: the percentage of customers who stop using your product within a certain period.
Engagement metrics: Such as daily active users (DAU) or MAU. Actually, engagement depend on your product nature for some products engagement rate might not be necessary to track unless you're messaging app for example.
Net promoter score (NPS): this can help you measure customer satisfaction and how likely your customers will recommend your product
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@narminablb Thanks for these details. Are you using a tool to calculate these metrics?
Simple how many people feel the pain of that problem and are willing to pay for it.
Launching soon!
Tracking metrics like conversion rates, customer feedback sentiment, and validated problem-solution fit can be as tricky as debugging code written by a caffeinated squirrel! How do you usually tackle the analytics jungle in your market validation quest?