Understanding which metric to measure can be a very daunting task. New and old don’t know where to start because there is so much data that goes through your company every day. It’s important to understand what is going to create the most value for the customer and start with that.
Think of the value of a person like a totem pole. The bottom of the totem pole is something that has no value. The top of the totem pole is the necessities to survive such as water, food, and shelter.
If you don’t achieve what this article will teach you, it does not matter how many “growth hacking” tricks or tips you try to do, you will not grow.
The goal with your product is to get to the highest part of the totem pole as you can. The best products out there are the ones that it is the first thing people think of when they wake up in the morning. People nowadays wake up to their phone before even saying hello to their spouse or loved ones. That’s crazy, and Samsung and Apple loves it.
The number one most important metric for any product is engagement.
When you have a high engaging product and something that people rely on, on a daily basis. You have a product market fit. The more time they spend with your product, the higher the chance they will tell someone about it.
It doesn’t even need to be a product, and it’s anything that you are giving something of value. The more times a person comes back to a rock concert, the higher the chance they will tell more of their friends about an upcoming rock concert or how about an open source git project, the metric to measure is the frequency of git commits if you are an engineer. For an e-commerce company, the metric to measure is all about repeat customers, the more products a single customer has, the higher the chance they will tell someone else about it.
Let’s think about a messaging app for example, like WhatsApp. If you have a person logging in every day, that does not mean they are active, and that doesn’t provide any value. The metric to measure is messages sent per day. That’s the only metric that should matter. When you measure how many messages sent per day, you are sending out a notification per message and the other person is notified about a social interaction bringing them back into the application and the loop is started. The more time the person stays in the application, you are creating that much higher value for them.
They are going to tell their friends about it because they care about their friends and want them to have as much value as they are getting.
This blog is all about you reading these articles repeatedly, and I need to provide that much value to you that you look forward to what I am writing. What a challenge!
I hope the concept is clicking at this point, all of this is achieving product market fit. If you fail to reach this engagement number, the stickiness of your application your product will not grow.
In a future article, I will talk about at what point your product achieved product market fit and how you should target your customers.