As a follow up to our article about what Growth Marketing is, we next take a peek into the metrics that every growth marketer must measure. (Depending on your exact industry, there will be other metrics as well, which we will cover in later articles.) As a refresher, we defined Growth Marketing:
“Growth marketing drives increased user engagement, by extending the boundaries of the product into marketing channels.”
We’ll focus on the first half of the definition that states “Growth marketing drives increased user engagement”. This statement is all about measurable results. In order to measure the results, we must first understand what KPIs and metrics we will use to gauge success. To say that growth marketers are numbers oriented is an understatement. Growth marketers are obsessed with metrics — they must look at deltas across time and cohorts to show growth in customer acquisition, customer retention, and customer win-backs.
How are we trending? What is our engagement looking like? How many users are we churning? How long does it take us to be profitable for each new user/customer? Am I really growing the business?
The metrics in this article will build the foundation for any Growth Marketer to be able to answer these questions. To provide order to the metrics, we will categorize the metrics through a simple series of lifecycle stages:
Activation is a stage reached when a user completes an action that’s indicative of getting value out of a product. What constitutes activation might be different for different services; e.g. a social app like Twitter might consider a user activated when they follow a certain number of other users within a given time-period; an e-commerce company might consider a user to be activated when they make their first purchase, or on a rolling basis, consider someone to be active if they have made a purchase in the last 6 months.
1-day & 7-day activation rates:
This metric gives a quick leading indication of how activation rates from a channel are trending. Marketers know that activation could often take months after acquiring a user, but they want a quick indicator of activation for new or recent sources of traffic. 1 & 7-day activation rates, coupled with simple data science models, can help forecast long term activation from the given cohort of users, and can be used to quickly estimate time-to-payback.
Time to payback by channel:
The amount of time it takes to recoup the cost of customer acquisition (CAC), through profits from customers. This is a measure not only of the efficacy of activation, but also of retention & monetization efforts.
Abandonment rate:
The percentage of customers who fail to complete a “conversion” event inside a single session.
Abandoner retargeting conversion rate:
The percentage of abandoners who are successfully converted based on retargeting efforts across multiple channels. Typically measured within a well-defined window of time, like 7 or 30 days.
User retention is about continuing to engage activated customers so that they stay active. Customer engagement is the most important area that Growth Marketers must focus on when users/customers are in this stage. Always provide value. How do you know if you are providing value or that your users see value in what you provide? A savvy marketer will start with these two metrics:
Users who were once active, but have since lapsed, can be won-back into becoming active customers again. This is one of the hardest ways to gain active users, since these users potentially lapsed due to the product losing some relevance for them. It’s like raising the dead, however, it must be a part of a Growth Marketer’s strategy. To measure the success of Win-Back campaigns, there is on metric in particular to focus on:
This is not an exhaustive list. It is meant to give Growth Marketers the metrics they need to identify success and address areas of improvement. These are the foundation to being successful as a growth marketer and owning these metrics for your organization gives you tremendous insight into the health of your business, marketing strategy, and customer base.
Watch out for more posts about growth marketing, and check out our comprehensive guide here for everything you need to know about the subject.
