Metadata
- Author: Olga
- Full Title:: Introduction to Proxy Metrics - Issue 204
- Category:: 🗞️Articles
- Document Tags:: proxy metrics, Proxy metrics,
- Finished date:: 2024-05-27
Highlights
KPIs (and North Star) are business ecosystem metrics (which are the opposite of being sensitive), so you should not use them to measure the impact. (View Highlight)
How to determine if your proxy metric is effective
- The proxy metric should be sensitive so that you can affect it in the short term - e.g., screen views, button clicks, session time, number of transactions, etc.
- Good proxy metrics are simple and don’t involve many complex filters or calculations.
- If possible, try to avoid using averages. The danger of averages is real. Remember, you can change the experience of a small subset of users (and significantly increase the average) but not improve the overall experience for the vast majority of customers.
- It should be independent of other product features, marketing initiatives, or similar factors. (View Highlight)
referencing Gibson Biddle one last time, “you’re generally better off structuring the metric as a threshold”: • % of (new/existing customers) who do at least (X) of (new feature) • % of (new/existing customers) who do at least (minimum threshold of value) by (X period in time). (View Highlight)
• DAU —> Unique screen views, logins or app opens, median time spent per user per day, total views or clicks. • Activation —> Onboarding CVR, % users doing X activity in their first day • Retention —> Total screen views, logins or app opens, total number of days using the product/feature. • Install-to-Paid —> Signup to trial, Total trials, number of initial transactions • New subscriptions —> Total number of transactions. • Subscription retention —> Total number of transactions, unique paid customers, % paid customers from DAU. • Churn rate —> % of users who canceled, total cancelations, the median time spent per user per day. • LTV —> DAU-to-Paid, in some cases, average transactions or orders per user, % paid customers from DAU. • Revenue —> Total transactions, unique paid customers, upsell-to-trial CVR, average revenue per user (View Highlight)