Developing and successfully launching a product is indeed a huge feat. But to stay in business, determining the product’s success rate is necessary. This is where metrics or key performance indicators (KPIs) can be used.
Evaluating a product’s success through KPIs is a great way to understand your business’s performance. It will also help you determine points of improvement and make adjustments to your production line to meet your target market’s current needs.
Product Success: What It Means
Product success refers to the effectiveness or functional value of a product. When you achieve product success, your customers find the product useful and will even recommend it to others. This can be measured through various factors such as profit margins, customer feedback, and brand reputation.
How To Measure Product Success
Most businesses simply measure product success through the sales they get. When people are buying, that means they enjoy using the product, right? However, that is not the only metric you should rely on.
Product sales can increase or decrease due to many factors. For example, the hype and novelty of a new product can drive sales for a while but that will eventually die down, and sales will decrease with it.
If you want to measure product success more accurately, you also have to include the following metrics:
- Determine Active User Percentage (AUP) or Monthly Recurring Revenue (MRR)
High sales revenues can tell you many people are buying your product, but how will you know if they’re using or enjoying it? This is where your AUP comes in handy.
This metric measures the active users of your product on a daily or weekly basis. To track your AUP, you need an analytics tool to monitor how many people have logged in or interacted with your product. Unfortunately, this method doesn’t apply to all products.
User analytics rely on digital data, which is suitable for businesses offering digital-based products. If your business cannot utilize AUP, you can measure product success by monitoring your MRR.
MRR pertains to the recurring revenues you get monthly. It could be through subscription-based fees and other predictable recurring payments. Your MRR represents satisfied customers since they’re willing to repurchase your products instead of just making a one-time purchase.
- Analyze Client Retention Rates (CRR)
The metric shows the percentage of loyal clients for your business, that is, the ones who keep using your products for a long time. If you have a high CRR, it means more customers are satisfied with your products and remain loyal to your brand.
This metric can also help identify areas needing improvement to increase customer loyalty. By understanding what keeps customers returning, your business can focus on providing exceptional customer service and quality products to maintain a high CRR.
- Review Customer Feedback
Feedback and reviews will help you gauge the success rate of your products. For instance, receiving many negative reviews means the product has not met the customer’s needs. Analyzing reviews helps you understand how customers feel about your products. You’ll also understand their problems and needs, which will help improve your product in the future.
How To Improve Your Product’s Success
Measuring KPIs and identifying metrics are not enough. Your business has to convert all that data into action. Below are some ways to improve your product’s success:
- Making Changes Or Improvements To The Product
Making changes or improvements to a product is a popular way of attracting new customers or appeasing existing ones. The improvements should be made with the needs of your customers in mind. Such product changes should also be convincing enough to attract new customers.
Product improvement can be classified into the following:
- Deliberate Improvements – These are changes or improvements to a product’s popular feature. The goal here is to increase satisfaction among existing customers and brand loyalists. However, evaluating the customer’s needs and preferences is essential to avoid adding unnecessary changes and complexities to the product.
- Frequency Improvement – This change aims to encourage your customers to use the product more often. For example, customers will receive a reward or unlock a new feature in the product once they reach daily or weekly milestones.
- Evaluate Your Price Point
Prospects will be discouraged once the price point is out of their range, no matter how great a product is. Moreover, your competitor might offer a similar product at a more competitive price. Thus, evaluating your prices is crucial to maintain an upper hand in a competitive marketplace.
With reasonable prices, more people can purchase and try your product—possibly increasing your AUP, MRR, and CRR.
- Stay Updated With Market Trends
Knowing the latest market trends will help you gain insights into prospects’ and customers’ current needs and preferences. You can use these trends to make changes to your product and ensure they remain relevant.
Developing a successful product can be challenging; launching it is just the first step. To ensure your product remains relevant and successful, your business needs to use metrics and KPIs such as active user percentage and client retention rates. The work doesn’t stop there. The data gathered should be converted to concrete action to improve the product.
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