Metadata
- Author: Elena Dyachkova
- Full Title:: Metrics Loop: Product-Driven Approach to KPIs
- Category:: 🗞️Articles
- Document Tags:: Metric trees,
- URL:: https://dramaticanalyst.substack.com/p/metrics-loop-product-driven-approach?utm_campaign=post&utm_medium=web&triedRedirect=true
- Finished date:: 2024-03-29
Highlights
This already goes a long way in so many organizations that aren’t used to thinking this way and usually focus on just high-level trends of ARR, Net Revenue Retention, Customer Acquisition Cost (CAC) and try to guess where the trend changes come from. (View Highlight)
But then our ‘arithmetics’-based approach somewhat breaks. There is a lag between engagement change and when it manifests in a revenue ‘event (View Highlight)
How do we define metrics outside of a pure formulaic approach that relate to the product experience, and still preserve ‘leading to lagging’ relationship or maybe event causality? (View Highlight)
and this is how the ‘flywheel’ or growth loop KPI framework approach was born, in an attempt to create an organized set of metrics around product health and engagement that reflects both short- and long-term sustainable growth for the company. (View Highlight)
Map out a qualitative growth loop of the product - in other words, how does a new user transition from initial product engagement to generating initial revenue, retained revenue (the opposite of churn), expanded revenue in the short term, and help the revenue grow long term (e.g. refer friends, invite coworkers, share on social media) (View Highlight)
For each ‘stage’ or ‘transition of the loop - define (qualitatively, for now) - what are the 2-3 key ‘enablers’ and ‘constraints’ of this transition: • Constraints: what are some aspects of product that make this transition challenging to improve/optimize, what puts it at risk? • Enablers: what is something special/differentiating about the product that makes this transition successful and defensible? (View Highlight)