Key Performance Indicator (KPI)
Product managers dedicate a lot of time to tracking and analyzing key performance indicators (KPIs).
In the world of mobile app management, KPIs play a pivotal role in measuring success, identifying areas for improvement, and making informed decisions.
Think of product KPIs as the destination you enter on your map before determining the best route to reach it. Enter the wrong destination, and you will end up at the wrong place. Track the right KPIs, and you will know exactly where your product is and where to go to achieve the next level of success.
What Is a KPI?
A KPI is a quantifiable metric that reflects performance and progress toward a specific goal or objective. KPIs provide a clear and measurable way to assess whether an app is achieving its intended outcomes. Product KPIs help product managers measure the success of different aspects and features of the app.
Benefits of Measuring KPIs for Product Managers
Product managers can reap numerous benefits from actively measuring and analyzing KPIs.
- KPIs offer real-time insights into how well the app is performing, enabling product managers to track progress and assess whether objectives are being met.
- With KPIs as a guide, product managers can make informed decisions based on quantifiable data rather than relying on assumptions or gut feelings.
- By identifying areas of underperformance or missed targets, product managers can proactively implement improvements to enhance the app's features, functionality, and overall user experience.
- KPIs help align the entire team around specific objectives, ensuring everyone is working toward common targets.
With the right KPIs, you will gain insights about user behavior that will help you improve specific features. For example, if you track screen views per session, you will know if there's a subtle decline in user activity well before your daily active users start to decrease. This will give you enough time to take corrective action.
Essential KPIs for Mobile App Product Managers
There are two major categories of product KPIs. One has to do with the software side of things, such as app load time, crashes, and resource utilization. The other is focused on user experience. Out of all the analytics to measure app performance, the following will help you learn what your users' preferences and expectations are:
1. User Engagement
User engagement reflects how actively users interact with your app. It's a strong indicator of app success, user satisfaction, and potential monetization. User engagement is measured through such metrics as:
- Daily Active Users (DAU): The number of unique users who interact with a mobile app within a 24-hour period
- Monthly Active Users (MAU): The number of unique users who engage with a mobile app over the course of a month
- Session Duration: The amount of time a user spends actively engaged with the app in a single session
- Screen Views per Session: The average number of different screens or pages a user views during a single app session
- Interactions per Session: The total number of interactions (such as clicks, taps, and swipes) a user performs within a single app session
Compare your product's user engagement with industry benchmarks. If user engagement is low, you might introduce personalized notifications or incentives to encourage more frequent interactions. To further improve user engagement and keep people coming back to your app, integrate in-app chat, implement gamification elements to incentivize app usage, and personalize the content on your app to cater to individual interests.
2. User Retention
User retention reveals the app's ability to retain users over time, indicating its long-term value and user satisfaction. It is calculated by tracking the percentage of users who continue using the app over specific time intervals, such as seven, 30, or 90 days.
The standard user retention rate varies significantly based on the industry. It is slightly over 11% for news apps and 2.4% for gaming apps. If your user retention is low, you might do the following:
- Analyze the user onboarding experience and identify pain points.
- Send personalized re-engagement campaigns to inactive users.
- Continuously enhance app features to maintain user interest.
If user retention drops significantly after an update, investigate the changes made and gather user feedback to rectify issues.
3. Customer Satisfaction (CSAT)
CSAT gauges user satisfaction and helps product managers understand how well the app meets users' expectations. It is usually measured through surveys or feedback forms that ask users to rate their satisfaction on a scale of one to five. After that, it is calculated in terms of the average or average converted into a percentage. For example, if your average rating was four out of five stars, your CSAT score is 80 (4/5 x 100).
The industry benchmark for ecommerce apps is 80, and for social media apps, it's 71. While comparing your CSAT score with the industry standards is a good idea, you should generally aim for a score of 70 or above. Here's what you can do to improve your CSAT score:
- Regularly collect user feedback through surveys or in-app prompts.
- Prioritize addressing pain points highlighted in low CSAT scores.
- Communicate improvements made based on user feedback through in-app notifications.
If your CSAT scores drop after a new feature release, analyze user comments to identify specific pain points and iterate on the feature. The customer support team and sales teams are also good sources of information when it comes to identifying issues that affect customer satisfaction.
4. User Adoption Rate
User adoption rate indicates how quickly users adopt new features or updates, reflecting how successful the implementation was. It is calculated by dividing the number of users who have adopted the new feature by the total number of users expressed as a percentage.
Improving the rate of adoption for new features starts before the feature release, as you work with the marketing team to create excitement about the feature. A comprehensive user adoption strategy involves a well-defined plan that combines effective onboarding processes, targeted communication, user education, and continuous feedback loops to ensure users understand, embrace, and make the most of the app's features. When introducing new features:
- Implement user onboarding tutorials for new features.
- Highlight new features through in-app notifications.
- Monitor user interactions with the feature and adjust based on usage patterns.
If a new feature's adoption rate is low, analyze user behavior within the app to identify barriers and adjust the feature's visibility or usability.
5. Conversion Rate
Conversion rate measures the percentage of users who complete a specific action, providing insights into the effectiveness of the app's features. It is calculated by dividing the number of users who completed the desired action by the total number of users who had the opportunity to do so.
To improve your conversion rate:
- Optimize user flows to reduce friction in completing actions.
- A/B test variations of call-to-action buttons to identify best-performing options.
- Provide personalized incentives or recommendations to drive conversions.
If the conversion rate for in-app purchases drops, a product manager might analyze the checkout process, simplify it, or offer limited-time discounts.
FAQs About KPIs for Mobile App Product Managers
Are there universal KPIs that apply to all mobile apps?
While some KPIs, like user engagement and retention, are generally applicable across all apps, the choice of KPIs should align with the specific goals and the nature of the app.
How often should I review KPIs?
Regular reviews are recommended, but the frequency can vary based on the app's lifecycle stage. For instance, newly launched apps might require more frequent monitoring.
What if my app is performing poorly in a particular KPI?
Analyze the factors contributing to the poor performance and consider adjustments to app features, marketing strategies, or user experience to address the issue.
Can KPIs help with feature prioritization?
Absolutely. KPIs provide data-driven insights into which features are resonating with users, allowing product managers to prioritize those that align with user preferences.