What Are Monthly Active Users (MAU)?




Many product teams swear by monthly active users (MAU) as a metric to measure the health of their overall product strategy. Others say it’s just a vanity metric that you should ignore. Which of these is closer to the truth? Can any valuable information be gleaned from this KPI, or should it be abandoned for more fine-grained metrics? 

In this article, we’ll look at MAU as a metric and discuss how to calculate it.  

What Does MAU Mean? 

Monthly active user or MAU is a term that refers to the number of unique customers who interacted with a service or product of a business within a month. 

Essentially, MAU is a key performance indicator (KPI) that measures online user engagement. Many online businesses use this metric, including online gaming, social networking, and mobile app companies. But other types of companies use MAU as well.

Investors generally look closely at the number of MAUs of a business. Why? Because the metric provides a quick overview of the business’s user growth. Furthermore, MAU delivers some crucial insights into the business’s ability to attract new customers and retain the existing ones. 

Although this helpful metric is a measure that is not recognized by current accounting standards, it’s still reported by public companies in their financial reports. For instance, social network titans such as Twitter and Facebook both devote a substantial amount of time to discussing the trends of MAUs in their quarterly reports. 

What Can Measuring MAU Tell Me? 

From a business standpoint, it’s helpful to know how users interact with your brand’s website or landing pages, and MAU is an accurate metric to determine this. A high MAU number indicates that customers are frequently interacting with your product. It’s an indication that your product receives good customer engagement and retention over a certain period. 

By measuring, you can better position your company to assess the efficacy of its marketing strategies and customer experience. Thus, monthly active users come in handy to provide a rough overview of your company’s general health and act as the basis for calculating other essential metrics.

How To Calculate Monthly Active Users 

Even though almost all online businesses calculate and report the number of MAUs, there’s still no industry standard regarding the definition of ‘active users.’ Because there is no standard, calculating MAU is not as straightforward as it may seem.

For instance, some businesses define active users as those who just visited their site, while others include only actual users of their product in their MAU figures. Thus, each company uses its methodologies to identify the monthly active users. Twitter’s definition of MAU is the following:

Twitter Monthly Active Users: A Twitter user who logged in or was otherwise authenticated and accessed Twitter through the website, SMS, mobile website, mobile, or desktop apps, or registered third-party applications or websites in the 30 days ending on the date of measurement. 

Facebook, on the other hand, defines this metric slightly different:

Facebook Monthly Active Users: A registered active user who logged in and visited Facebook through the website, messenger application, or mobile app in the last 30 days as of the date of measurement. 

Generally, the number of MAU is calculated using a business’s internal data. The recognition of unique users is executed using an identifier such as an email or even a username. Additionally, companies must carefully monitor the number of false, duplicate, and spam accounts that can substantially distort MAU data to ensure they are getting accurate information. 

Many businesses adjust their MAU figures for such items to prevent the artificial inflation of the metric. 

Issues with MAU by Itself 

As we’ve mentioned, there are no uniform standards for the individual components of monthly active users. Other metrics used to qualify trends in social media can be highly inaccurate and myopic. You simply won’t get the whole picture. 

In 2015 Facebook revised its MAU definition as a response to skepticism about its monthly active users’ accuracy. It would no longer include “third-party pings” — that is, individuals who are not active Facebook users but who share content only via another website integrated within the Facebook login.

Did the other social media sites also make this change in their monthly active user calculation?

For years, social media giant Twitter has asked investors to judge its daily active user (DAU) — not its monthly active user — growth. On its 2015 fourth-quarter earnings call, investors asked Twitter to explain why it had lost a whopping four million monthly active users during the previous quarter. 

The reason? It turned out that most of those four million “users” did not use Twitter at all. It turned out that Apples’ Safari web browser counted them when it performed an automatic Twitter data pull. 

However, Twitter only began sharing its daily active user data back in February 2019. Switching from MAU to daily active user counts showed that the brand was gaining — not losing.

It’s up to you whether MAU is the best way to measure the number of users on your website. But you should be aware of the pitfalls of using MAU on its own without the insight of other KPIs. 

But what other KPIs can you use in conjunction with MAU to more accurately measure user engagement, and ultimately, a successful product? 

Key Performance Indicators (KPIs): The Basics 

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. By now, we know that MAU is a powerful KPI — but are there others that go hand-in-hand that are just as important? 

  • Daily Active Users. We touched on this metric a little earlier. Rather than calculating the monthly active users, DAU calculates active users daily.
  • Customer Churn Rate. This crucial KPI is the percentage of customers lost during a given period. For eCommerce, that means customers who fail to make repeat purchases within a time frame established by the company, such as 30 or 90 days. For Saas or mobile apps, that means customers who end or cancel their subscription.
  • Customer Acquisition Cost (CAC). CAC is your company’s average expense of gaining a single customer.
  • Customer Lifetime Value (CLV). Sometimes referred to as LTV, this critical KPI is the average revenue a single customer is predicted to generate throughout the time they hold an account with your business.
  • User Cohort Retention. A cohort is simply a group of users that share a common characteristic. Cohort analysis looks at the retention analytics of those users over time. This metric is so critical because growth distorts MAU and DAU counts — if your app is rapidly growing, new user signups will mask where your existing users are dropping off in your MAU and DAU numbers. And if you only look at MAU and DAU, you’ll be blind to retention issues that’ll kill your app if left unaddressed.  

Best Practices for Analyzing and Utilizing KPIs 

Like any tool, KPIs — including MAU — are most useful when they’re used and analyzed properly. Any metric is meaningless unless you know what you want it to tell you. Some KPI best practices include:

  1. Setting KPIs that are aligned with business goals.
  2. Tracking only the metrics that help answer questions, prove, or disprove hypotheses you have about your business goals. 
  3. Ensuring that key performance indicators are achievable.
  4. Determining how frequently you will measure each KPI.
  5. Setting short and long-term goals for the performance indicator.
  6. Sharing KPIs with the company and stakeholders.

For KPIs to be helpful, you might also consider developing key performance questions (KPQs) or the questions that determine whether you have met the objective. 

When crafting these questions, try to avoid simple yes-or-no questions such as, “Have I met my sales quota?” and try to come up with open questions that are thought-provoking such as, “How well am I marketing my product or service portfolio?”

The answers to your KPQs will provide you with the information you need to make well-informed decisions and set more productive goals.

The Bottom Line 

The ability to segment your audience is valuable. You can discern between groups of active users — those who are prospects and those that are clients. 

When using a powerful analytics marketing tool, you’ll know details of everyone that has visited your site, what they browsed — from the very first time to the last — and you’ll gain a grasp of why the return users keep coming back and why your lost users leave. 



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Top of the Funnel Marketing Explained




We have all been in various stages of a marketing funnel. All of us — every consumer — is likely engaging with different sets of multiple brands’ marketing funnels at this very moment. Each time you click on a post, fill out a form field, engage with an advertisement, open an email, begin a free trial, and eventually click buy — you’re taking action within a funnel. 

Marketers are tasked with bringing in new qualified leads and pushing potential customers from awareness to consideration, intent, evaluation, and ultimately purchasing. They must also maintain customer engagement and interest during each stage.

While converting prospects into buyers is the ultimate goal, marketers first feed leads into a brand’s lead sequence — also known as top-of-funnel marketing. 

What is Top of the Funnel Marketing? 

When marketers refer to the top, middle, and bottom of the sales and marketing funnel, they are referencing the concept of pulling in a large pool of individuals that may be eventually interested in your services or products. They might sign up for a newsletter or demo or simply visit your website. 

As these consumers move down the funnel, the pool gets smaller — like the neck of a funnel. Those interested in buying your products or services continue to engage with your company and learn more about your offerings. Those not interested simply leave the funnel. 

Marketers maximize content output at the top of the funnel to reach a vast pool of potential customers. They do this by pushing great content through many different channels and tactics, such as:

  • Social media
  • SEO
  • Influencer outreach
  • Blogs and websites
  • Video marketing
  • White papers
  • Free trials
  • Paid advertising

The top of the marketing funnel has very little to do with services and products and has everything to do with your buyer’s needs and interests. 

What Are the Goals of Top of the Funnel Marketing? 

There are two primary goals at this stage:

  • Drive brand awareness
  • Generate leads

You’re trying to get your target market’s attention and convince them that your brand provides value. Once your buyers begin to think of your brand as a thought leader (i.e., a resource for interesting and helpful information on topics they care about), they will be more willing to opt into communications to access your insights. 

This opt-in is a value exchange — and the goal of top-of-the-funnel marketing is to facilitate that exchange.

How To Use Top of the Funnel Marketing To Drive Sales

Top-of-the-funnel marketing is all about content. If content is king, then the top of the funnel is where it truly reigns supreme. 

A crucial aspect to recognize about top-of-the-funnel marketing is that it’s consumer-centric, meaning it needs to address how your target customers and your company are a good fit for each other. What interests your customers? What kind of information might they need, and how can you help?

Top-of-the-funnel marketing should aim to inform your target audience about topics related to your company rather than trying to sell them. Research what kind of content your target audience wants, either by conducting your market research or using a website analytics tool like Kissmetrics to give you insight into your website visitors. 

For example, an online clothing boutique might produce entertaining content on the latest fashion trends. In contrast, a financial services company might have educational content on how to save money for retirement or information about how 401(s)s work. Both qualify as top-of-the-funnel content.

At the top of the funnel, you also collect website visitor information to develop prospective leads. To do this, you can ask for an email in exchange for a valuable whitepaper or even a free ebook that they couldn’t find elsewhere — you need to demonstrate that you are a thought leader that will add value to your customers’ lives.  

You should also include a great call-to-action (CTA) at the bottom of your content, like whitepapers and blogs that compel readers to visit one of your product landing pages. In that case, it’s their choice to click your CTA, and you’re not trying to sell them on anything until they get to your landing page.  

Examples of Top of the Funnel Marketing and the Real-Life Audiences They Reach 

If you want to grasp how to create great top-of-the-funnel content, you need to see it in action. 

Here are a couple of examples of top of the funnel marketing and the real-life audiences they reach:

MINDBODY targets small business owners in the health and wellness industries such as fitness, spa, and beauty. Their clients share a familiar story that starts with passion and then evolves into a dream and grows into a business. Tapping into that deep, emotional experience creates brilliant and engaging buyer-centric content. 

EA Sports introduced a brilliant NFL Draft promotion called “Free to Play” weekend, which allowed Madden gamers to download and then play the game for free for a short promotional period.

EA Sports created an influencer marketing campaign by partnering with nearly half of the first-round Draft picks to promote Madden on their personal social media channels targeting sports fans from all around the world. In total, the posts shared by these athletes earned almost a whopping two million social media engagements.  

How To Improve Your Top of the Funnel Marketing Strategy 

Here are a few tips to help you improve your top of the funnel marketing strategy:

Analyze Your Own Customer Data

Many valuable tools can help you mine your existing customer data to find patterns and provide you with target companies and contacts that are look-alikes. Some refer to this process as “predictive analytics” or “predictive lead generation.” 

Predictive analytics uses a combination of machine learning, statistics, and data repositories to help identify your ideal customer profile. Although you have many predictive technology choices, the best ones analyze your customers on three levels: digital footprint, firmographics, and tech stack. 

All predictive lead generation is based on a simple premise: You are much more likely to succeed in the market sectors where you have had success in the past. 

Use Social Data to Improve Targeting

If you already know a good amount about your users, you can enlist other methods to learn outside data connected to them, ultimately improving targeting precision. 

For instance, if you know what topics your top consumers are likely to discuss on their social media feeds, you can employ social listening tools to identify other prospects discussing these topics. This tactic is a clever and effective way to harvest candidates relevant to your service or product. 

Reach Your Customers By Testing Channels

Most brands fail not because of product failure but rather because of traction failure, which stems from working in the wrong channels. Double down on a few traction channels that show the most promise — based on your tests. Once you’ve identified your key targets and the optimal channels, reach out on all platforms that have proven to create traction. Evidence suggests that the confluence of multiple touches moves a prospect to action. 

So be tenacious no matter what channel you’re using, as most sales reps give up too early. 

The Bottom Line 

Streamlining your marketing tactics throughout the funnel will cut costs while improving retention and conversion rates, especially for your top-of-the-funnel marketing efforts. 

You’ll see a knock-on effect as you pick up better leads, leading to a more effortless nurturing stream and better conversion and retention rates. You’ll also see more interested first-time customers who are more likely to become happy repeat patrons and brand advocates for your business in the future.

Thankfully, the tools you need to make that happen are easily accessible and, more importantly, more accurate than they were just a couple of years ago. Kissmetrics is a tremendous behavioral analytics tool that consolidates your audience data into valuable buyer personas. 

Within minutes, your marketing campaigns can personalize your advertising with pinpoint accuracy so you can reach the audience that’s interested in what your brand has to offer.



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The Complete Guide to Website Visitor Tracking




When website visitor tracking first came on the scene it was an online revolution. Suddenly businesses had information on their current and would-be customers that allowed them to transform their sites, marketing and products to be more profitable.

What Does It Mean To Track Website Visitors?

Website visitor tracking is when you use an analytics tool to record all of the activity taking place on your site. But not every analytics tool records the same activity, the same way. Some are very simple and track basic actions like visitor count, time on site and bounce rate. 

Behavioral analytics tools like Kissmetrics will tell you a lot more. They’ll reveal who’s visiting your site, where they came from, what they engage with, and where they drop out of the sales funnel. You’ll be able to identify behaviors like:

  • Viewing websites and landing pages
  • Viewing videos
  • Reading blog posts
  • Clicking on your sales pricing, links, and offers
  • Signing up for email notifications
  • Signing up newsletters
  • Viewing blog posts
  • Adding items to cart
  • Completing a purchase
  • And more

You’ll be able to segment your data any way you like so you’re getting the information that’s most meaningful to you. Kissmetrics also tracks visitors across devices. So you’ll know if they first clicked on an ad on their phone to arrive on a landing page, then opened an email on their computer, and finally purchased from their iPad. These insights give you in-depth information about your customer’s journey.

What Are the Benefits of Website Visitor Tracking?

Did you know that just a measly 2.35 percent of people who visit your website will convert to purchasing customers? Those statistics can be quite disheartening for marketing and sales teams. Especially when you’re working so hard to drive eyeballs to your site in the first place.

This is where analyzing your website traffic can help you optimize your site for flow and messaging, and possibly lead to a higher conversion rate. 

Here are some additional benefits of website visitor tracking:

Benefit #1: Website visitor tracking can help improve lead generation and quality

We all know that qualified leads are the bread and butter of sales quotas. And meeting those benchmarks hinges on having a consistent, steady flow of leads progressing stage-to-stage through the sales pipeline. If you use a behavioral analytics tool to track your website visitors, you’ll get better information on who’s most likely to purchase and the messaging that’s most likely to speak to them. You’ll see: 

  • The marketing campaigns that brought in the most leads. 
  • The pages your qualified leads most visit and the links they click.
  • Who converted and/or purchased and who didn’t.
  • Where they fell out of the sales funnel.

This critical knowledge will allow your marketing team to better target quality leads,optimize marketing campaigns, content plans, and sales messaging.

Benefit #2: You can use website visitor tracking to improve your sales process

Website visitor trackers provide additional website metrics that help your sales team understand how customers find your website. Is it through Google? A social media website? An online forum? Whilst this is intensely useful for marketers for promotional purposes — helping them understand the success of varying campaigns so they can properly design their next — this information is equally useful for sales teams. The more information sales teams have about their potential customers, the easier it is for them to communicate on an intimate level and overcome any roadblocks their targets have. 

Sales teams can also use visitor tracking data to prioritize leads. By knowing the types of customers most likely to become big spenders and power users, i.e. those likely to be the most valuable to your business, your sales team can prioritize communication and on-boarding for these cohorts. This is especially effective for small sales teams fielding a high volume of leads. 

Benefit #3: You can close more sales with website visitor tracking

The capabilities in website visitor tracking work seamlessly together to get you the payoff you’re after. Here’s a quick example to illustrate what is possible:

A returning user comes to your site for the 5th time in as many days. The system recognizes the user, who is already set up in your company’s CRM system, and automatically sends an alert to the sales rep, informing them that this specific user is very interested in Product A.

The system also applies the lead scoring algorithm to the user’s record based on past and current engagement behavior with site content and interest. The current visit puts the user’s score above the ‘sales-ready’ threshold for Product A, automatically triggering a sales alert email and auto-enrolls the user into a nurture campaign. 

When the user later opens and then clicks on the sales alert email, another alert is automatically sent to the sales rep who — after reviewing the user’s activities in the CRM record — calls to follow up with the user and is successful at setting up a product demo the following day. After attending the demonstration, the user purchases Product A.

From this example, you can easily see how beneficial website visitor tracking can be for your growing company. 

What Are the Most Common Factors That Affect Website Visitor Behavior? 

If it doesn’t convert, it doesn’t work. Here are the most common factors that affect website visitor behavior:

  • Your offer is not appealing. Do you feel like your offer is attractive? If you were a new visitor on your website, would your offer make you want to buy your product? Having a poor offer can greatly affect website visitor behavior — and not in a good way. 
  • Your website takes too long to load. The average consumer spends just 30 seconds on each site before navigating to another. If your website takes too long to load, you could be losing valuable customers. 
  • The layout of your website is confusing. Keep your website’s length short and sweet, with easy access to the content that consumers want to see. If you bog your site down with ads and pop-up windows, people may be less likely to return to your site. 
  • No clear CTA. Visitors need to be told what to do. Buy now. Schedule a demo. Contact us. Sign up. These are all clear call-to-actions linked to a desired conversion that tell the visitor what they should do next. If your CTA isn’t clear: both visually (i.e. highlighted with a brightly colored button) and verbally, you’ll get fewer conversions.
  • The content on your website is outdated and/or not useful.  Consumers who come to your website search for certain information or content, so keep things fresh and be sure to update often. Keep your blog posts relevant to the service or product that you offer, and share new and relevant content as often as possible.    

Tips for Boosting Website Traffic 

If you’ve struggled with driving traffic to your website or landing page, don’t worry — you’re not alone. According to recent research, 61 percent of content professionals are challenged with knowing what’s most important to their target audiences, 50 percent are challenged with understanding the goal of the target audience at a particular stage of the customer’s journey, and 49 percent struggle with knowing the steps in the customer’s journey. 

Between posting on social media, writing a new post for your blog, and strategizing for a new email campaign, it’s tough to look back and see what’s driving traffic to your site — and what isn’t.

Here are a few quick tips to help you boost website traffic:

  • Optimize your website for organic search.
  • Greet visitors with an eye-catching and targeted landing page.
  • Promote your website with great digital ads.
  • Use email marketing to direct traffic.
  • Engage your audience on social media.

With this many different avenues for boosting website traffic, you’re sure to find a channel that works for your brand and your customers. Now it’s just a matter of finding the right tools to help you do it.

The Bottom Line 

If you’re not currently tracking your visitors, an effective website visitor tracking software like Kissmetrics will show you who is doing what on your website. It’ll show you how they got there and the steps your most valuable customers or power users take on the road to becoming your VIPs. This will give your marketing, sales, UX, and product teams valuable and in-depth information to better hone their efforts.

Your marketing teams will be able to see which campaigns brought in your best customers so they can create more of them. Your sales teams will see the types of customers they should be targeting to build better leads. Your UX team will know where the customers and users get stuck and what works to make adjustments. And your product team will see what’s popular and what’s not so they can better plan your products.

We’ve seen how website visitor tracking is an indispensable tool for finding out who your visitors are, how they engage with your site, and who’s most valuable. Now it’s time to put that newfound knowledge to work improving your sales and marketing activities. 

For the best behavioral analytics tool to help take your business to the next level, check out Kissmetrics — request a demo with us today and see for yourself. Trust us—you’ll be glad you did.



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E-Commerce Conversion Rates – Where Should Yours Be?




Since COVID forced the world inside their homes, the online shopping market has grown at record speeds, and it shows no sign of slowing. With the exponential growth of e-commerce, online businesses and brands need to be vigilant about their actions and strategies, which means focusing on conversion rate optimization (CRO).

To determine your optimal conversion rate, you’ll need to understand what a conversion rate is, why it’s essential, and which factors affect e-commerce conversion rates. 

What is an eCommerce Conversion Rate? 

A conversion is any desired action taken by the customer and a conversion rate is the rate or percentage of potential or existing customers that take said action within a specified period of time. An eCommerce conversion rate is just the conversion rate on an eCommerce site or platform.

An e-commerce site might designate any of the following as conversions:

  • A sale of a product or service.
  • Add products to a wishlist or cart.
  • Signup by a user on the e-commerce platform.
  • Any other user action that makes sense for your company.

Generally speaking, the more traffic you drive to your site, the higher your chances of converting visitors — but this isn’t always true. Countless factors can affect a user’s journey from the first visit to conversion. That’s why it’s imperative to use conversion rate in conjunction with other critical metrics to gauge what’s working and what isn’t. 

Why is My Conversion Rate Important?

Conversion rate measures what happens once users are actually on your site. It can be used to test the effectiveness of certain initiatives like marketing campaigns and tweaks to the UI/UX and the attractiveness of your offer and overall product quality. The reason conversion rate is a more accurate indicator of performance than conversion count is that a robust marketing campaign could send more potential customers to your site, increasing the number of overall conversions. But if the marketing effort wasn’t well-targeted or your UI/UX leaves the customer confused or doesn’t present your product attractively, you could actually convert a lower percentage of visitors. And the lower your conversion rate, the more money you have to spend to make a sale.

Conversely, if both your conversion rates and conversion counts are higher, you know your UX design is working, and your marketing message is reaching the right kind of customers. 

Perhaps the biggest reason to increase your conversion rate(s) is important is: increasing your conversion rate can increase your profit.

If you can make more sales off of existing marketing efforts by tweaking your UI/UX, or by retargeting your marketing to reach people more likely to purchase, then you will have to spend less to make each sale. And the less you spend on each sale, the more profit you turn.

What are the Biggest Factors that Affect Conversion Rate? 

Now that you understand what e-commerce conversion rates are and why they’re so important let’s explore some of the most significant factors that affect conversion rates. 

Poor UI/UX Design

No doubt about it: design decides whether a web page is going to convert or not. When working on UI and UX, designers should think about user engagement, usability, and the overarching conversion goal; specifically, what are you trying to get visitors to do? Based on input data like buyer persona profiles and conversion goals, designers can start developing an effective UI/UX design. 

Here are a few quick tips that can help designers to come up with effective UI/UX solutions:

  • Know the goal.
  • Make the design responsive.
  • Know what users expect. 
  • Balance brand and user goals.
  • Test.
  • Iterate, then test again. 

Traffic that isn’t Relevant

What’s better: Getting more traffic in hopes of more leads or increasing the conversion rate with current traffic?

Answer: It doesn’t matter unless you’re driving the right (i.e. relevant) traffic to your site. 

If you’re trying to increase conversions, first check the quality of the traffic your web pages are getting. If the traffic is targeted, meaning you’re attracting people who belong to desirable cohorts, focus on optimizing your site and customer journeys for conversion. On the other hand, if your conversion rate is high and you can’t think of any changes that can improve it, look at your PPC campaigns to drive more traffic. 

Your chances to convert users into customers are pretty high if those users are potentially interested in your service or product. Wasting your marketing spend on fake or irrelevant traffic will only cause a high bounce rate. So, as a rule, always check the traffic quality and relevance consistently. 

Having a Poor Offer 

Do you feel like your product or service offer is attractive? Today, when the marketplace is saturated with different services and goods, it’s harder than ever to find something truly unique and exceptional. So if the offer your company makes isn’t valuable to your target audience, then all the marketing and design efforts made towards CRO will be useless. 

From the very start, list the benefits your users get from your service or product and define the advantages that distinguish you from your competitors. In other words, establish your value proposition. Then make it obvious.  

Ask someone to look at your web pages to see if they effectively communicate your unique value proposition (USP). If people can’t tell you in just a few words what you’re offering and what they can gain from your specific offer, then you should revise your site. 

Make sure your value proposition touches on the following:

  • What your service or product does.
  • The value you can bring.
  • What makes your offer different from competitors.
  • Who will benefit from your offer?

Your promise should be precise and manageable, especially since it determines the potential of your conversion rate. 

No Security At All

If your website has no security for customers they would be afraid of sharing their personal details on your website. As a result, it will bring the conversion rate drastically down. To avert this situation, you need ideal security for your website like an SSL certificate. You may wonder which SSL cert would fit with your site? The answer is the number of domain/subdomains. For example, if you run an eCommerce website then, a wildcard SSL like Globalsign wildcard, rapidssl wildcard, comodo positivessl wildcard, Thawte wildcard are a few well-known certificates in the industry.

How To Calculate Conversion Rate

So, how exactly do you calculate your conversion rate? Here are three simple conversion rate formulas to use:

  • Conversion Rate = (Total number of conversions / Total number of leads) X 100
  • Conversion Rate = (Total number of conversions / Total number of sessions) X 100
  • Conversion Rate = (Total number of conversions / Total number of unique visitors) X 100

All three of these conversion rate formulas are valid. The best way to calculate your conversion rate depends on what exactly you are defining as your conversion event and how you plan on measuring your traffic. The numerator is the number of conversions (i.e. the action you’re measuring), and the denominator is your total pool of traffic (which is generally leads, session count, or unique visitors). 

Here is a quick example for calculating conversion rate:

If your online store receives 5,000 visitors and 50 conversions for a set period, that means your store’s conversion rate is 1%.

Simple as that — divide conversion into visitors, and you have your conversion rate. 

The Bottom Line

Tracking your eCommerce conversion rates is essential to understanding  health, the quality of your product, your UI/UX design, and the effectiveness of your marketing campaigns for your e-commerce site and business. Kissmetrics is an analytics tool that makes it easy for you to not only track conversions, but also understand who your customer is, where they come from, what they buy and the most effective customer journey for your site. 

Ready to see for yourself? Request a demo with us today.



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Bounce Rate vs. Exit Rate: What’s the Difference




Most companies with an online presence have learned to be wary of a high bounce rate, but most analytics tools also give you information about your exit rate. Although many people tend to use the terms ‘bounce rate’ and ‘exit rate’ interchangeably, they measure different customer behaviors. 

Here we show you the difference between the terms, how to calculate the rates, and what you can do to reduce them.

What is Bounce Rate?

A bounce refers to when a user visits a single page on your website and subsequently navigates away from your website without clicking on any other elements on the page. That means the visitor doesn’t click any of the links to another page, leave a comment, or take any of the pathways to an affiliate partner. 

What is Exit Rate?

An exit rate refers to when a user visits a page on your website and then navigates away from your website. Exit rate doesn’t care which page they were on or how many other pages they looked at on your website. It just measures the percentage of people who exit your website after viewing a specific page. 

What is the Difference and Why is it Important?

Although the definitions of the terms are similar, there is a distinction between the two. Bounce rate measures the percentage of visitors who leave your website before visiting any of your other content. This can be a serious problem if visitors aren’t willing to give the rest of your website a chance and often indicates that your content or product isn’t what they were looking for. 

A high bounce rate might suggest that you should look more closely at your content and search engine optimization (SEO) to ensure that your website appears in relevant search results. Visitors may accidentally click on your website looking for an answer to a specific question or for a type of product that you don’t offer.

Focus on targeting the right audience of potential customers: people likely to be interested in your products or services and your company. 

On the other hand, the exit rate can help single out pages with irrelevant or poorly created content or poor UX. If a user has been navigating to multiple pages throughout their session and then they leave when they hit a specific page, that’s an indicator that something is frustrating about that page. 

Which is More Important?

One rate isn’t more important than another. Product analytics tools can measure both; just remember the metrics tell you different things. They both provide information, as long as you know how to combine these metrics with others to develop actionable goals.

Some companies prefer to focus on exit rate, instead of bounce rate, for deeper insights into why users are leaving their website. High exit rates on product description pages indicate an issue with the product description, graphics, or the product itself. For some reason, interested buyers have seen the page and decided they no longer want your product and left.

That kind of insight can’t come out of bounce rate since it focuses solely on customers who land on your home page or blog and then leave. If your webpage is meant to continue funneling potential customers toward your product pages or check-out, there is likely an issue. Many times, this is due to pathing complications where the user isn’t sure where to click or how to proceed down the conversion funnel. 

How to Collect and Use the Data on Your Bounce and Exit Rates

Kissmetrics can help you record bounce and exit rates on your website. The tool will gather the information and generate specific reports based on the timeframe and other parameters you enter.

Analyzing the data requires you to think critically about the page’s content, your website’s goals, and why users are leaving your website after visiting. Websites with blogs usually see a higher bounce rate on average because people will visit, get the information they need, and then leave to continue their business. 

How to Calculate Bounce Rate and Exit Rate

The bounce rate is calculated by dividing your total single-page visits by the total number of entrance visits. Exit rate is calculated by dividing your total exits from a page by the total number of visits to a page. This means that every bounce counts as an exit, but not every exit is a bounce. 

How Do You Reduce Bounce Rate?

Although bounces are a subset of exits, many websites find that their bounce rate is significantly higher than their exit rate. Considering it’s a piece of the overall exit rate, it seems strange that it would be larger, but it does make sense once you understand the two. Many people will follow links or click-through advertisements that don’t have enough information out of curiosity before deciding they aren’t interested.

A high bounce rate typically indicates some kind of dissatisfaction with the landing page. This isn’t always the case, as is generally not the case with blogs, but there are a few ways to improve a user’s experience with a specific webpage.

One way is to improve the content on the page. You could add more interesting elements to catch the reader’s eye, break up the text into smaller chunks with headers, add clearer calls-to-action, or place graphics throughout the page. 

Another way to improve the UX is to quicken the page’s load time. If you have too many visual elements on a page, this can slow down page load time, so try stripping some of the larger files like video from the page to see if that helps. You can also check the code to make sure it’s efficient. 

If you suspect your high bounce rate is related to visits from the wrong type of audience, try advertising your website or product to a smaller, more specific audience. Our cohort report looks at page visitors who complete multiple designated events or perform the same events repeatedly. This report allows you to group your customers according to when they first completed an event. This allows you to analyze your customers to see which cohorts are most likely to follow through your sales funnel to purchase and market to them specifically. 

How Do You Reduce Exit Rate?

A high exit rate is often a sign of an issue within your sales funnel. The user is visiting multiple pages on your website but, for some reason, is leaving the site before converting. The issue might be one of content. Your product descriptions might be confusing or they might not sufficiently highlight the benefits it brings to the customer. You could also consider lengthening blog posts. Posts that have 300 words or less typically lead to higher exit rates because a person can read them so quickly or they may not contain enough information for the reader. 

If your pages have strong content, the problem may lie in your calls-to-action, or lack of them, a complex purchasing process, or something else that is frustrating your would-be customers. 

Is There an Acceptable Bounce Rate or Exit Rate?

All companies will have a bounce rate and exit rate. Even the best-structured websites will receive visitors who click out of their pages. It’s essential to consider the content and type of page before deciding that a high bounce or exit rate is necessarily a bad thing.

For example, if you have a sign-up page that requires users to access an email and click on the link you provided there, you would expect the page to have a high exit rate; people need to exit to go to their email. Similarly, the confirmation page that the link takes you to may signify the end of their session for the day.

If a user navigates away to the email, that will be recorded as an exit. By opening the link in the email and getting to the confirmation landing page, that counts as the start of a new session on your website, so if the user then leaves, it will count as a bounce. 


Both bounce rates and exit rates for your website’s pages provide information about how your users are experiencing your company. When combined with other metrics, you can use this information to determine which pages need some improvement or where you need to rethink your sales funnel to turn more visitors into customers. 



Bounce Rate vs. Exit Rate: What’s the Difference?

Bounce Rate vs. Exit Rate

Bounce Rate Vs Exit Rate: 7 Things You Need To Know in 2019

A Beginner’s Guide To Cohort Analysis





Whether you’re doing it on purpose or subconsciously, it’s human nature to put things into categories. Maybe you organize your shoes based on color or your glassware according to their size. Whatever the case may be, by organizing your personal items into groups — also referred to as cohorts— you’re doing your very own cohort analysis.

Interested in learning more? Kissmetrics can help. Read on for our beginner’s guide to cohort analysis. 

What is Cohort Analysis, and What Is It Used For?

A cohort is a group of individuals with shared characteristics.

Therefore, cohort analysis is a type of behavioral analytics in which users are grouped based on shared traits so you can better track and understand their actions. This allows you to ask more targeted, specific questions, and make informed decisions that will help to reduce churn and drastically increase revenue. 

No matter your industry, cohort analysis could arguably be one of the most effective ways to gather information regarding your customers’ behavior and how they interact with your service or product. 

Okay, but what exactly is a cohort analysis good for?

Great question. 

Cohort analysis allows you to compare variables and changes between your digital marketing campaigns. You can test traffic, engagement and conversion rates of different cohorts; how one ad performs against another, which marketing channel is the most effective for which cohort, and more.

Even brick-and-mortar stores can test the effect of a website modification on user behavior. 

Here are some of the things you can test using a cohort analysis:

  • Ad content
  • Target audience
  • Channels
  • Experiments/campaigns
  • New product lines and service offerings
  • Website redesigns
  • Discounts, sales, promotion campaigns 

Understanding the Different Pieces of a Cohort Analysis

Cohort analysis allows you to segment your customers by the time and channel they were acquired and analyze the retention rate of each. You can then put your resources behind the channels that produce better retention as well as increase retention rates in poor performing channels

To optimize retention rates in this fashion, you’ll want to segment your users in either of the two following ways:

Cohorts by Acquisition

Divide up your users by how and when they first signed up for services or purchased your product. You can get as specific as creating unique cohorts by the week, month, or even the particular day they first converted. Your level of specificity may be determined by the number of users you have buying or signing up on each day.

In the case of an app or software, this will allow you to determine exactly how long customers use your services or product before their engagement drops off. It also helps you to focus your efforts on optimizing user engagement well before the dropoff point. 

Cohorts by Behavior

In addition to cohorts by acquisition, you also have the option to segment users by the behaviors they have or have not taken within a specific period of time. For instance, in an app, this could be anything from a launch, uninstall, or install to a combo of behaviors or transactions taken from within the app. 

Your behavioral cohort would be made up of consumers who performed the same action within the same time frame. 

Using the app example we mentioned above, this could be anyone who initiated an in-app purchase within the first seven days of download. You could easily use this and other unique distinctions to identify which segments of your users are most likely to stay and become long-term users. 

From this point on, you can work to optimize your users’ experience and increase their likelihood of long-term engagement.

How To Perform a Cohort Analysis

Now that we’ve covered exactly what a cohort analysis is and how it’s used, you’re probably wondering how to perform one.

Identifying Your Cohort

First things first, accurately identify the cohort you’ll be tracking. Here are a few steps to determine which cohort you will need to track:

Decide on the correct question to answer.

The point of your cohort analysis is to return actionable information which you can use to improve your own and your user’s end result. With this in mind, it’s easy to see how crucial it is that you ask the correct questions like: 

What do I want to learn? 

How will I use this information to increase revenue, prevent churn, improve the user experience, etc.? 

If you’re unsure how you’ll use the information on your cohorts, you might be tracking the wrong thing.

Choose the metrics that will best help answer your question.

Effective cohort analysis requires you to establish which event you’ll be tracking, as well as the specific properties related to that event. Ask yourself, what event will I be tracking and what insights will this help me to gather about my cohorts? 

Define your metrics once you have the questions you’ll be asking, and this will help you to better define your cohorts.

To create a specific cohort, it’s important to decide on whether to target all users who took a particular action within a specific timeframe, or to distinguish a defining characteristic among them, such as those who purchased less than or more than a certain amount — creating two or more cohorts. 

For instance, in gaming, one might choose to segment their lowest engagement users from their highest who signed up during the same timeframe. This way, they can identify how each cohorts’ actions, usage level, and purchasing behavior differs. 

Basic Cohort Analysis With Excel

One of the most popular methods to perform a basic cohort analysis is in Microsoft Excel. Given that you’ve been tracking the data needed to answer the questions you’re asking, Excel allows you to manually segment your cohorts, import the information, crunch the numbers, and answer many basic questions. 

Basic Cohort Analysis in Google Sheets

Another popular method to perform a basic cohort analysis is through Google Sheets. If you don’t currently have an effective behavioral analysis system in place and are looking for a way to crunch the numbers manually to perform your own cohort analysis, Google Sheets may be a good fit for you to help answer some basic questions. 

Okay, but is there an easier and more effective approach?  

As a matter of fact, there is. If you happened to look into Excel and Google Sheets, you’d find that cohort analysis without the help of a marketing analytics tool like Kissmetrics can be a bit cumbersome. Unless you have a data scientist on your team, answering anything but your simpler questions may be a challenge. 

Sure, it’s possible, but it all boils down to preference. Ask yourself: do you have the resources and time to perform regular cohort analyses with Google Sheets or Excel? 

Or would it be easier and more efficient to have a tool like Kissmetrics doing the work for you?  That way you can answer virtually any question with very little resource expenditure.

The Takeaway

The power of identifying trends in your users’ behavior is obvious, but it’s up to you to start implementing this powerful solution in your business. 

Always keep in mind that the key to effective cohort analysis is your ability to accurately collect information. 

While the basic cohort analysis through Google Sheets and Excel allows product managers, marketers and others to better understand the habits of their specific users and the patterns that appear in their actions, a powerful behavioral analytics tool like Kissmetrics is necessary to make the most of this revelatory analytics system.







8 Customer Success Metrics and KPIs To Track




Measuring customer success is an effective way to figure out how well your customers understand the full value of your specific product or service such as a paper writing service. In the end, it doesn’t make a difference what kind of product you promote – it should draw the attention of the target audience.

Are they using every facet of your product or service possible, and are they satisfied with how it works? Are they underutilizing key areas of your product or service? Or perhaps unaware of a certain functionality? Or are they just flat out unhappy with the results they’ve seen?

These crucial insights can provide you invaluable information about how satisfied and successful your customers are with your product or service, which can guide your roadmap going forward, helping to prevent future churn. 

But we know hat you’re thinking: There are countless ways to measure and track customer success — how are you supposed to know which is best for you and your brand? 

Read on for 8 customer success metrics and KPIs that you should track. 

What Are Customer Success KPIs and Why Do They Matter?

First things first, what exactly are customer success KPIs, anyway? 

Good analytics software will provide you with plenty of important data to help you make informed decisions about how to market your product and who to market it to. 

The key to making the best use of analytics software is to have a good understanding of which data points can best help you with each business goal. The customer success KPIs and metrics listed below will help to give you information about your product throughout the customer lifecycle. By focusing on these metrics, you will have happier customers that stick around longer.

#1: Net Promoter Score (NPS) 

Arguably one of the easiest and most straightforward ways to measure your customer satisfaction is by collecting Net Promoter Score, or NPS. 

NPS asks your customers to rate on a scale from 1 to 10 how likely they are to recommend your specific product or service to a friend. Typically, those who rated 1 to 6 are considered “Detractors,” those who rated 7 to 8 are considered “Neutrals,” and those who give the best ratings, 9 to 10, are considered “Promoters.” 

NPS = % Promoters – % Detractors 

For example, if you have 72% “Promoters” and 14% “Detractors,” then you have an NPS score of 58.

NPS can be extremely helpful in measuring your customer success because it helps to provide an insight into how happy your customers are and how much value they are deriving from your product or service. The drawback, however, is that without context NPS is only a numerical value, and you don’t always fully understand why a customer would give you a low NPS rating. 

#2: Churn Rate

Customer churn is the percentage of your customers that leave your service over a given time period. 

For example, if you have 500 customers at the start of the month and end up losing 5 of them, you have a churn rate of 1% for that month. This might be good, this might be bad — it just depends on what the average churn rate is for your specific industry.

When calculating churn rate, don’t count new customers that you’ve acquired in that time period unless those customers churn within the period. Churn rate is supposed to help you get a feel of what your customer retention rate is. It is not intended to tell you if you are bringing in more business than you are losing. 

Also, it’s important to keep in mind that there are two ways to view customer churn rate:

  • Customer churn: the number of your customers who have churned in a specific timeframe.
  • Gross value churn: the amount of money that has churned in a specific timeframe.

We always recommend looking at both since it’ll better help you figure out how well you’re retaining low-spend vs. high-spend customers. Gross value churn can also let you know if the customers you retain are spending enough money to offset losses from the customers that you’ve lost. 

#3: Customer Satisfaction Score

If you’ve ever bought a product or service and were then asked how satisfied you were, you’ve provided a Customer Satisfaction Score, or CSAT. 

CSAT is a super easy way to understand a customer’s overall discontent or content with your product. 

To calculate CSAT, simply ask your customers to rank your product or service on some kind of numerical scale, and then take the sum of the scores and divide by the number of respondents. 

While NPS measures the overall satisfaction of your customers, CSAT typically measures a customer’s satisfaction with a specific feature inside of your product or service. 

This metric is most effective when you use it at the exact moment your customer has finished using that specific feature during their journey through your product. 

#4: Monthly Recurring Revenue (MRR) 

MRR stands for monthly recurring revenue and is a normalized measure of a business’s predictable revenue that it expects to earn every month. 

Watching your MRR can provide you with a nice overview of how your product or service is being perceived. 

Although different tiers can complicate the equation, generally speaking, keeping this number growing rather than shrinking is a great indicator of your overall customer satisfaction rate. It’s sometimes helpful to use these “big picture” metrics as a simple way of giving you an at-a-glance look at your company’s overall health. 

To calculate, multiply your total number of active users by your average revenue per user. This should give you a pretty good idea of how much revenue you’re generating each month. 

#5: Renewal Rate

Customer loyalty is the most prized of all customer success goals, and there is arguably no better metric to measure it — particularly for B2B service providers (e.g., a SaaS company) — than renewal rate.

To calculate this metric, divide the number of customers who renew by the number up for renewal in a given time period. Then multiply that number by 100 to get your renewal rate as a percentage. 

Having a strong customer renewal rate indicates that customers have had enough success working with your product or service to commit to another contract. 

But it’s important to weigh your renewal rate against other factors, such as MRR. Just because a high percentage of your customers are renewing doesn’t necessarily mean they’re spending as much money or even more. 

#6: Customer Retention Cost

Customer retention cost (CRC), another crucial metric, will give you an estimate of how cost-effective you are in achieving customer success, and will help you determine where to invest in your customer success programs. 

While you may be over-the-moon with excitement to roll out new initiatives, you want to first make sure that you’re spending your funds in a cost-effective way. 

By measuring CRC, your business can make smart investment decisions by comparing the potential cost of retaining customers vs. the potential revenue you’ll generate from a new feature or service.  

Calculating this important metric is quite the chore. First, you have to add up all expenses tied to your customer success program over a given time period. Next, you’ll need to divide your customer success costs by the total number of customers within that time frame. The goal here is to figure out how much money you are spending on each customer in your attempt to retain them.

Example: $100,000 spent over one year / 200 customers = $500 per customer to retain them. 

The best way to think about customer retention cost is as a relative metric. Focus on period-over-period improvements in retention cost. One period’s worth of CRC is just data. Comparing this metric against specific customer success initiatives over time, on the other hand, is actionable information. 

The Takeaway

Quality metrics can help you increase customer satisfaction and set yourself apart from your competition, all while reducing customer churn rate so that you can grow your SaaS business faster than ever before. 

To keep track of these important metrics, consider using an in-depth product and marketing analytics tool like Kissmetrics. Our powerful analytic solution was founded on the principle that data isn’t just a set of numbers. Each number represents a customer, a user, or a significant action that contributes to your key marketing strategy and the overall growth of your business. 

Ready to see for yourself? Request a demo with us today.





How To Create Your Product Positioning




Without smart positioning, the most well-researched and well-developed product can lose its competitive edge in the marketplace.

Product positioning is one of the strategies in the arsenal of the long and happy existence of your product — but what exactly is it, and why does it matter? 

What is Product Positioning, and Why Does It Matter?

Product positioning is the name for how consumers think about a brand. . It enables you to present your product to your target market under the best possible circumstances and is an essential element of your marketing plan. 

Product positioning assists advertisers, product developers, and product teams with many aspects of product marketing, such as:

  • Explaining the value of your product to your customers
  • Defining what makes your product or service stand out from your competitors
  • Identifying your target audience and how your product or service can address their needs
  • Establishing and maintaining awareness around your product or service

Information You’ll Need To Know About Your Product and Your Market

It’s important to know your product and your target market inside and out when developing your product positioning strategy. Luckily, many of the core building blocks of your existing marketing strategy will contribute to developing an effective product positioning strategy and will help highlight the unique value of your product or service.


This is your “why” — why does your product or service exist? What is the problem it’s solving and how do you envision your customers using it? Defining your mission will also help you to think more clearly about how to bring your market.

Market Category

Your market category is your competition zone. What kind of product or service are you offering? Whether you are entering an established or emerging market, or creating an entirely new market category, this is your opportunity to determine who you’re up against.

Customer Pain Points

Do you know what your customers’ primary pain points are? Does your product or service address one or, better yet, all of them? How can you more expertly position your product or service as a solution to these challenges? 

As you consider your customers’ journey and how your product can solve their common pain points, you can create a user persona card for the entire product team to reference. 

Company and Product Differentiators
Depending on your target market, someone else has probably already tried to address the same problem. So the key is to clearly define why and how your product or service provides a better solution for the problem. In a saturated marketplace, it’s crucial to differentiate your product from the competition. 

Brand Identity

Stop for a moment to think about today’s most recognizable brands. The green Starbucks mermaid, the Nike swoop, the Target bullseye, the golden McDonalds arches, and Redbulls’ red bulls

For each of these brands, the company name doesn’t need to be present within the logo for someone to know exactly what the brand is. In fact, the logo may evoke some kind of emotion in you. This is the unrivaled test of a strong brand identity. 

To create an effective logo, think about what you would like your brand to be known for. This process may take some time because it requires collective introspection, vision, and creativity. 


Consider your overall product vision as part of your product positioning. Tapping into your motivations for creating your product will help you clearly define your service or product’s immediate value and growth potential. 

Product Positioning Statement

With these foundational marketing elements, you will be ready to begin developing a solid product positioning statement. This will be the heart of your strategic marketing and customer messaging. 

A successful product positioning statement will describe your service or product and its value to your target viewers. 

Once the entire product team agrees on the product positioning statement, you can draft a creative customer-facing tagline. 

Common Mistakes and Oversights To Avoid

Most products and services that are not correctly positioned within the target marketplace ultimately end up failing before they have a chance to get in consumers’ hands. If you want to formulate a product positioning strategy for a new product or service, there are three common mistakes and oversights to avoid:

>> Mistake #1: Failing to Do Primary Research

Without conducting primary research on your target audience, you won’t uncover any useful customer insights. Understanding your customers’ motivations, wants, and needs is crucial to the development of your product positioning strategy, so talk to as many of them as you possibly can. 

Study your customer’s problems and explore the different ways that you can help solve them. The more time you spend understanding their problems, the better. 

>>Mistake #2: Product Launch When the Market isn’t Ready

Prematurely introducing a poorly positioned product or service into the market is, needless to say, another mistake to avoid. 

Take, for example, Apple’s Newton PDA, introduced to the electronics marketplace in 1993. The consumers of the early 1990s were not yet accustomed to mobile phones, and consumer pagers, or “beepers”, were the key tools used for mobile networking and communication. Additionally, the Newton PDA was highly criticized for its poor handwriting recognition and, what many considered, its exorbitant price tag. 

>> Mistake #3: Trusting Your Gut

Your product positioning strategy is not a marketing model you want to develop on “gut instinct.” Primary research is a much more reliable and accurate way to determine if your product positioning strategy is resonating directly with your audience. 

Take note of how your customers respond when you present your product positioning strategy — if they seem excited and want to hear more, you’re on the right track. If not, then your “gut” might be wrong, and it’s time to revisit your assumptions and conduct more research. 

Executing Your Product Positioning Strategy

Executing your product positioning strategy is not a one-person job. It requires the expertise of both the product management and product marketing teams. You’ll need to bring together your knowledge of the following areas:

Understand who your customers are.

Your product positioning should succinctly capture who your customers are and what they need. Describe attributes of your target audience, including demographic, psychographic, behavioral, and geographic details. You’ll also want to provide insights into the main problems the customer is trying to solve. 

Analyze the market.

You need to know the alternative products available to your customers so you can highlight what sets you apart. Research your direct and indirect competitors to get a sense of how they serve your customers’ needs. This will help you to differentiate your product or service from the competition and help your potential customers understand why your product is the best solution for their needs. 

Assess the product.

Lastly, to execute your product positioning strategy, it must be built on the unique value your brand and product provides. Conducting a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is a useful way to objectively analyze what your product or service does well and where it can do better. This ensures that your marketing message aligns with the product experience.

Not sure how to conduct a SWOT analysis? Kissmetrics can help. Our product and marketing analytics solution is one-of-a-kind and will make it much easier to understand who your most valuable customers are and where they are coming from to help you execute an amazing product positioning strategy. 

The Takeaway

In today’s highly commoditized and saturated markets, effective product positioning is critical for standing out. 

To get your product positioning right, use an analytics tool like Kissmetrics to understand who your most valuable customers are and where they come from. Interview your customers and study their problems. Keep your product positioning strategy to a single page, and be sure to wrap it around why customers buy and why they should buy from you. 

With great product positioning and the help of Kissmetrics, you are sure to set your brand apart in the marketplace. 






Market Positioning – Creating an Effective Positioning Strategy





Consider this: There are thousands of different companies offering the same products or services as you and promising, if not delivering, similar results. And they are probably well-positioned in your target market. 

So, why exactly would a consumer pick you over your competitor?

The answer lies with your target audience: They don’t want to purchase a product because it can solve all of their problems. They’ll purchase a product because it solves one specific problem over and over again. 

This is why market positioning is important. A clear, concise positioning statement is at the heart of every effective marketing strategy and influences your brand identity. 

Market positioning requires focus and a strong commitment to a specific niche or target audience.  

Marketing Positioning: Definition and Importance

Your brand’s market positioning strategy is affected by plenty of variables related to consumers’ motivations and requirements, as well as by your competitor’s actions.  

The purpose of market positioning is to create an image that consumers recognize for representing a specific characteristic, idea, or concept to more effectively position your product within a target market.

Developing a sound strategic positioning can:

  • Reduce churn
  • Heighten brand awareness
  • Give you the ability to charge premium pricing
  • Increase brand equity
  • Improve market and customer-centricity
  • Increase recall
  • Increase revenue per customer

These are just a few of the advantages of an effective and brand-centric market positioning strategy.

The Different Positioning Strategies

Researchers discovered that positioning in marketing is predominantly determined by hard criteria and relationship-building factors. Some other considerations, such as company structures and degree of integration, also play a part. The study also noted that a high level of brand awareness is a contributing factor to perceptions of the pursued positioning in marketing strategies. 

Here are just a few of the most common types of positioning in marketing:

  • Product price: Associating your product, service, or brand with competitive pricing.
  • Product attributes and benefits: Associating your product, service, or brand with certain characteristics or with certain beneficial value. 
  • Product quality: Associating your product, service, or brand with high quality.
  • Product use and application: Associating your product, service, or brand with a specific use.
  • Competitors: Making potential customers think that your product, service, or brand is better than that of your competitors. 

Examples of Big Brands’ Market Positioning Strategies

Need a few examples? We’ve got you covered. Here are some great examples of big brands’ marketing positioning strategies to inspire you:

  • McDonald’s, Burger King, and Wendy’s position themselves as a place to get quick and cheap meals
  • Starbucks positions itself as a source of upscale, top-notch coffee and beverages.
  • Tesla and Audi position themselves as a luxury status symbol.
  • Microsoft and Apple both like to establish and position themselves as a tech company that offers user-friendly and innovative products
  • Dove positions itself as a simple yet good-quality soap, appealing to women’s natural beauty. 

To Start Creating Your Own Marketing Positioning Strategy: Conduct a Competitive Analysis

In order to create a unique and effective marketing position that will lead to a higher conversion rate, you must first compare yourself to your competitors. 

This can be achieved through strategic competitive intelligence, which assists you with understanding important aspects of your competitors within your target market. Some of the questions you should consider include:

  • Who are your primary competitors?
  • How much influence does each one of your competitors have on each other?
  • Are certain competitors thought of more favorably? What about unfavorably?
  • How is the industry performing?
  • Where do the opportunities lie? Where do the threats lie?
  • How does your company compare and contrast amongst others in your category?

Once you have the answers to the questions listed above, your competitive positioning will become much clearer. 

Explore Who Your Target Audience Is, and Who You Want To Be To Them

Now, you need to learn who your target audience is. By analyzing their characteristics, you can easily separate one customer from another. You can accomplish this by creating user persona cards that help you narrow your target market even further. 

Start by looking at different target audience demographics like location and gender to define some of the most important factors you need to know about your potential customers. 

By understanding things like who your customers are, where they come from, and what their problems are, you can get ahead of your competition by creating a top-notch marketing positioning to show consumers that you are the best solution for their needs. 

Common Mistakes and Oversights To Avoid

Products that aren’t positioned properly in the target market can end up struggling to generate revenue with customers who don’t have the problems you’re looking to solve. If you want to formulate a good product positioning strategy, here are a few of the most common mistakes that you should avoid:

>> Mistake #1: Diversifying products in unrelated markets.

When a new product or service is launched, always keep your target audience in mind. Make sure your product or service is related to what customers associate your brand with. 

For example, a popular high-end women’s skincare company venturing into the fast-food industry may struggle to connect with fast-food consumers. Your brand positioning strategy should reassure that customers can trust you to offer best-in-class products.

>>Mistake #2: Adopting a cheap strategy.

Adopting cheap marketing strategies that don’t prioritize the customer journey is not sustainable in the long term. When you decide to market your product as having the “lowest prices”, you hardly need any marketing. Most revenue generation is fueled by purchasing power. However, you’ll always find a competitor who is selling for less. 

Using the lowest priced route can be your quickest way to failure. So whatever you do, stay away from adopting a cheap strategy. Take your time to put together a strong, effective marketing positioning strategy that will truly take your brand to unimaginable heights. 

>>Mistake #3: A lack of insight and a lack of an “idea” in your brand positioning statement.

A great brand positioning statement captures an idea that is either based on a unique insight or that resolves an inherent tension. Weak positioning statements, on the other hand, usually capture an “ideal” but a rather boring summary of everything the consumer desires. 

Yes, moms want their little ones to be happy and eat all of their veggies. Yes, parents have chaotic lives. And yes, Millennials want to “do good” — these are not insights. These are generally accepted truths marketing researchers have known for years. 

The concept of “insights” in many cases is often misunderstood.  

Executing Your Product Positioning Strategy

Executing your own marketing positioning strategy involves digging deep into the details of your brand and discovering what you do better than anyone else. 

These steps listed below will help you to create a product positioning strategy that’s unique to your business: 

  1. Determine your current product positioning.
  2. Identify your competitors.
  3. Conduct competitor research.
  4. Identify what makes your product, service, or brand unique. 
  5. Create your positioning.
  6. Evaluate if your positioning statement works. 
  7. Establish an emotional connection with both your prospects and customers. 
  8. Reinforce your products’ differentiating qualities during the sales process.
  9. Create value.
  10. Ensure that customer-facing employees embody your brand. 

The Takeaway

Understanding how to market your brand will become much clearer once you know where you stand and where you want to go. By implementing an effective and well-researched marketing positioning strategy, you position your product for reduced churn, more conversions, and repeat customers. 

Need help? Kissmetrics makes it easier than ever to track your customer conversion process and discover areas where you’re losing potential customers. It can help you identify data and trends which directly contribute to your bottom line — like which marketing channels produce the most valuable customers. 

All of this information is crucial to the success of your business — request a demo with us today and see for yourself.






A Step-By-Step Guide for Conducting Better Product Discovery





Whether you’re at a start-up or an established company, your product team is probably more focused on how they’re building what they’re building. Which makes sense. You want your new feature and overall product to work well for the user. But when so much focus is put on the “how”, the “why” of what you’re building is often taken for granted.

Until recently, many product teams have been focused on how to build products the right way, i.e. the “how” of product development, rather than figuring out which are the correct products to build in the first place, i.e. the “what” of product development. 

In the past few years, “what” frameworks have advanced, but the tools to support them still tend to lag behind quite a bit. That means that product teams have managed the intricate process of making a decision on what to build next using hacked-together spreadsheets, task management tools, shared documents, and systems for managing sales, engineering, support data, as well as marketing. 

Which means teams have collectively wasted an infinite amount of hours and potentially millions of dollars developing underutilized products and features that fail to live up to their ultimate potential. 

So, how might one go about deciding what to build at the same time as they’re optimizing how they build their products? 

Answer:product discovery. 

Interested in learning more? Read on for Kissmetrics’ step-by-step guide for conducting better product discovery. 

Step 1: First Things First, Understand What Product Discovery Really Means and What You’re Trying To Do

Product discovery simply refers to the process of determining the market need for your product idea. That is, it answers the question: what should we build? Product discovery plays a key role in idea generation, yet it is often overlooked. 

When making the decision of what to build, teams tend to emphasize the usability of the product instead of its utility (i.e.how useful it is). The result is an unfortunate multitude of tools, products, and applications that — while simple to use — have no real reason for existing. 

So, what exactly is product discovery, you ask? 

Product discovery is a way to make sure the product you want to build is useful. It ensures that your program solves a true need or smooths an existing pain point. It uses evidence to prove you aren’t falling foul of wrong assumptions about consumer needs and wants. 

Step 2: Realize That Product Discovery Isn’t a Linear Process

If things were simple, businesses would all have the dream product that every user loves, but the truth is that it’s much more complicated than that. Although product discovery may appear to be linear and pretty straightforward, in reality — it’s not.

Product discovery is unstructured and unpredictable. It’s quite difficult to know in advance when you’re going to learn something or how long it’s going to take. Depending on the level of uncertainty and risk associated with the business idea you’re looking to develop, there will be a lot of back-and-forth between exploration and validation.

Some of the tasks will require a couple of days to develop and test, while others will require weeks to develop and some more weeks after that to validate. In addition, you must recruit customers for interviewing or testing on a frequent basis.

Many businesses struggle to put a strong and effective product discovery process in place, reinventing the wheel every week or desperately throwing things against the wall to see if they stick. This creates quite a bit of frustration amongst teams and distrust from stakeholders — which could undermine your product development.

To prevent this from happening, consider an analytics system like Kissmetrics to help bring structure to the creative process of discovering what to build. 

Step 3: Keep These Common Product Discovery Mistakes In Mind So You Can Avoid Them

To help you and your team build products that truly matter — products that actually solve real-world problems — here are a few of the most common product discovery mistakes so you can avoid them:

Jumping to Solutions Before Nailing Down Real User Problems

“If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and 5 minutes thinking about solutions.”Albert Einstein

While this time allocation may be a bit on the extreme side of things, understanding user problems is the most crucial step when it comes to building a product. Yet, a common mistake that product teams make is being so incredibly eager to jump to a solution that they don’t hammer down and define user problems first. 

When teams don’t spend enough time unearthing user problems, they’re not able to deliver real value, wasting time and valuable resources solving the wrong problem, building the wrong solution.

Underestimating the Importance of Working With Stakeholders

It can be pretty tempting for your product team to plow directly ahead with the discovery process without involving stakeholders from both in and outside the organization. 

This can cause major problems down the road for a few reasons:

  • Product affects everyone
  • Stakeholders have valuable insights to offer
  • Product teams need stakeholder buy-in

Ideally, all stakeholders should have their requests considered during the discovery process, so when it comes time for delivery, they know exactly why their ask was included or not. 

Not Involving Engineers Early in The Process

In many cases, engineers are only brought into the fold during the delivery phase — after all, that is when their skills are needed to turn great ideas into real-life features and products. However, this is problematic for three reasons:

First, engineers won’t fully understand the problem they’re trying to solve because they weren’t included in the process of defining it. They may question why a problem was picked in the first place, and product teams end up justifying their decisions rather than getting things done. 

Second, product managers will be the engineer’s only reference for understanding users. So when it comes to identifying solutions, engineers may come to totally different conclusions than the product team because they didn’t play a hands-on role in getting to the bottom of user insights. Essentially, your product team will always be two steps ahead while your engineers are two steps behind. 

And lastly, the product team risks missing out on exceptional ideas if engineers aren’t looped in. Engineers have a specific expertise and are usually among the smartest people in the room. They provide valuable technical insights, understand how to utilize existing functionality, and reduce effort, and can help to quickly build proof of a concept. 

Step 4: Come Up With Multiple Solutions To User Needs and Start Testing Their Viability

Really explore user needs. Go beyond identifying them and try to really understand the demand of the space. Yes, this is definitely easier said than done — that’s why it’s so beneficial to incorporate an effective analytics product into your business.

Kissmetrics is a product and marketing analytics tool founded on the principle that data isn’t just a set of numbers that you simply plop into a graph. Each number represents a user, a customer, or a significant action that contributes to the overall growth of your business. It can help you and your product team to effectively come up with multiple solutions so you can start developing and testing a product with a true need. 

Step 5: Don’t Be Afraid To Go Back To The Drawing Board To Add or Change Your Ideas and Plans

It takes time to create a product with a true need. If you find that your idea doesn’t work, don’t be afraid to go back to the drawing board. Brainstorm with your product team and engineers, talk to your stakeholders, and consider chatting with users. You can even implement an analytics tool like ours to really help you identify, understand, and improve the metrics that drive your business, to ultimately help develop a new product idea with a true need.  

The Takeaway 

Product discovery might feel a little intimidating, but it doesn’t have to be. Keep in mind that for many product teams, adopting a product discovery process is an ongoing process, so getting started is what matters most. 

Not sure where to start? Kissmetrics can help with a demo — request one today here. 






Sales Funnel Stages, Definition, Process & Examples




As a sales rep, you’re constantly fighting an uphill battle for attention from prospects and leads. It can seem as if the harder you try to sell, the harder the job becomes. 

But there’s a process that can help sales reps convert cold prospects into hot leads, whether those leads are taken from landing pages, social media, or a piece of content. Being aware of key outreach techniques along the buyer’s journey can significantly influence the purchasing decisions of prospective customers.

This is known as the sales funnel.

You need to create a sales funnel in order to convert your website visitors into new paying customers. If you don’t, you could struggle to generate new customer revenue. 

What is a Sales Funnel and Why Do I Need To Know About It?

A sales funnel is an extremely useful visual representation of the customer journey from start to finish, from their first contact with you and your brand all the way through the buying process until a completed purchase has been made. 

Just like the name implies, a sales funnel is the narrowest at its bottom and widest at the top. 

Each stage of the sales funnel pushes your most qualified prospects into the next stage and drops those that are not ideal customers for your specific offer or marketing strategy. 

Your sales funnel is directly connected to your target customers’ journey phases, which can be sorted into three parts: top, middle, and bottom.

A sales funnel will help you to better understand what your customers are thinking and doing at each stage of the sales journey, especially when it comes to pain points or buyer persona behaviors. These valuable insights allow you to invest in the right marketing channels and activities, create relevant messaging during each stage, and convert more prospects into paying customers. 

What Are the Stages of a Sales Funnel?

From the exact moment prospects hear about your product or service until the moment they make a purchase (or don’t), they pass through different stages of the sales funnel

That journey may change from prospect to prospect, but in the end, they will evaluate whether your product or service is the best solution for them and their specific needs Each stage of the sales funnel requires a different approach. Why? Simply because you don’t want to send the wrong message at the wrong time. Think about it this way: it’s kind of like a waiter asking you what you want for dessert before you’ve even put in an order for appetizers and drinks. 

Let’s break down exactly what happens during each stage of the sales funnel:

Top of the Funnel: Awareness, Discovery, and Interest

Early in their journey, your potential customers are going through a specific problem and are determining how they can go about solving it. 

Customers tend to have many questions and thoughts about their problem as they likely haven’t named the problem itself — they just know the symptoms. They’re trying to verbalize the specific issue at hand and are looking for a trusted source of information. 

At the top of the sales funnel, your potential new customer wants to feel educated, and not to mention confident to be able to talk about their problems when the time comes. 

From a marketing perspective, they want content that’ll guide them through the topic that matters to them, including videos, blog posts, and even quizzes. Product and market content through infographics and case studies that give your target audience the valuable info they’re looking for.
In this important stage, your untouched prospects convert into contact-made prospects, and you’ve got yourself some lead generation.  It’s time for the salespeople to ask relevant questions and qualify your lead, which is what takes us to the next stage: the middle of the sales funnel. 

Middle of the Funnel: Exploration and Decision-Making

In the middle stage of the funnel, you’re no longer dealing with faceless and nameless contacts. They now have a name for their problem and have defined it. They’re looking into all available solutions such as products and services — specifically, your products and services.

Questions at this stage are no longer generic. Rather than asking “why” questions, your leads are diving into a wide range of opportunities to remedy their struggle. They have a good understanding of their pain points and want to know the possible solutions. 

At this point, they might not necessarily be evaluating specific solution providers and their unique products just yet. Instead, they’re searching for the types of solutions available to them so they can  make the best decision possible.

Bottom of the Funnel: Taking Action and Making a Purchase

The bottom of your sales funnel is when your lead now knows everything about their specific problem and the best type of solution for them. They are ready to take action and make a purchase. 

The role of the sales team is to get the purchase, but your goal shouldn’t be just to get your almost-customer to point-of-sale (PoS). You should also set them up for long-term customer success with your unique product or service. 

This means providing them with information that will help introduce and incorporate the new solution into their everyday lives. 

Consider including these types of content in the final stage of the sales funnel:

  • Customer or insider success tips
  • Training webinars or product implementation
  • Special offers
  • Follow-up email campaigns
  • Bundled packages

Common Leaks in Your Funnel Where You May Be Losing Sales

Whether you’re a coffee shop owner or an online beauty store, having an effective sales funnel to push cold prospects into hot leads and then into happy customers is of the utmost importance. But if you have leaks in your funnel, you could be losing sales.

Some of the most common signs that your sales funnel has a leak include:

  • Your leads don’t consistently follow the path of your funnel.
  • The quality of your leads have declined, or lead quality is pretty inconsistent.
  • You are generating a lot of qualified leads, but very few are moving on.
  • Your leads have dried up entirely. 
  • Qualified leads are getting lost during the handoff between internal teams. 

It’s critical to your growing brand that you’re able to determine where these problems are happening and how to repair them at every stage of your sales funnel. Learning how to do so — in the most efficient way — will bring you the highest return on your marketing dollar. 

Showing any of the signs listed above? These reasons below could be why:

User experience problems: For example, slow loading times, poor mobile optimization, or compatibility issues. 

Conversion killers: Aside from user experience problems, also pay attention to web forms, interruptions such as notifications or popups, and page visits that suddenly kill your chances of converting. 

Weak CTAs: If your call-to-action is not compelling enough, or confusing, your leads are always going to leak. 

Inactivity after conversions: New leads will drop off if you’re not following up quickly or effectively. This means you’re not sending email confirmations, promotional offers, loyalty programs, reminders, etc. 

​Low customer retention rate: Your work isn’t complete once you convert a new lead; your next mission is to turn this happy customer into a repeat buyer.

Low email engagement: It’s challenging to nurture leads if your primary source of getting in contact with them directly isn’t getting the engagement you are hoping for. 

As sales funnels become longer and more complex, it takes a little bit more work to fill the gaps and stop those leads from slipping away. You’re going to need access to the right data to help you spot these problems from the get-go and solid automation platforms like Kissmetrics, so you can respond to issues at scale instantly. 

The Takeaway

Developing and optimizing an effective sales funnel takes time. But it’s the best way to compete in any online marketplace. Take time to create a sales funnel that represents what you want and your audience wants. Cultivate it over time using analytic tools like Kissmetrics to adjust your approach as needed and find out what works and what doesn’t.

With Kissmetrics, you can take your customers to the next stage in their journey — request a demo with us.







How To Calculate Conversion Rate | Explained With Examples





Conversion rate is one of the best behavioral analytics benchmarks you can use to measure the performance of your marketing campaigns

Unlike cost-per-click (CPC) or click-through rate, conversion rate describes how good your marketing strategies are at turning consumers into customers, i.e. “converting” them. Generally speaking, the higher your conversion rate, the better your marketing.

In this article, we’ll dive into everything you need to know about conversion rates, how to calculate them, and the types of insights you can gain from conversion analytics data. 

What is Conversion Rate, and Why Does It Matter?

To define conversion rate, it’s important to first understand what a conversion is. 

A conversion is an action that a user takes on your site that turns them into a potential or paying customer. Common examples would include clicking on a call-to-action (CTA), signing up for a monthly email newsletter, or making a purchase. 

With that in mind, a conversion rate is the percentage of visitors that complete a conversion on your website. It may sound simple but understanding conversion rate is the best way to analyze whether your campaigns and website are contributing to your business objectives.

>> Here’s why conversion rates are important.

For starters, increasing the conversion rate of your campaign is usually the quickest and most affordable way to generate customer revenue. Would you rather get more customers from Google Ads by doubling your ad budget, or by optimizing your marketing approach for increased long-term conversion rates? Optimizing for higher conversion rates means more revenue per visitor to your site. Which means every customer or user you get from your campaigns will be worth more.

>> Conversion rates can predict failure or success. 

Do you want to know whether or not your product or service is on the right track? Conversion rates provide a high-level benchmark of your company’s overall health. 

High conversion rates indicate your marketing campaigns are working, your product is popular with users, and your website is easy for users to navigate. Conversely, weaker conversion rates can indicate problems in your marketing campaign, target audience, UI/UX, or the product itself. 

If you see weaker conversions or you had high conversion rates that decreased, you can use behavioral analytics reports to diagnose the problem and make adjustments where needed. 

>> Better conversion rates can save you money. 

A marketing campaign that converts more users is more effective than a campaign that converts fewer users. And, a more effective campaign costs less money. For example: If the goal is 100 users or conversions, and you could get those users or conversions with one or two ads instead of paying for 10 ads, then you’ve spent less money to get those users. This means more money left in your budget for project allocation. 

>> Focusing on your conversion rates will help improve your website. 

A memorable marketing campaign is just the initial stage of increasing conversion rates. Your campaign website is equally important. If customers get to your website and don’t know what to do next, i.e. the CTA isn’t clear or checkout is confusing to navigate, you’re not going to convert them.

When you use a behavioral analytics tool to analyze your conversions, you’ll see where customers seem to get lost in your campaign. You can then use that information to improve your campaign website’s UI/UX and increase the number of conversions. 

Conversation Rate Formulas

Calculating your conversion rate is a straightforward process. Just divide the number of conversions in a given time frame by the total number of individuals who visited your website or landing page, then multiply it by 100%.

Conversion rate = (conversions/total visitors) * 100%

For example: If your website had 20,219 visitors and 3,325 conversions last month, your conversion rate is 16.44%. 

In fact, if you set up your tracking correctly, most advertising and analytics tools like Kissmetrics can conveniently show your conversion rate directly on the dashboard.

Let’s check out two more examples of simple formulas to find the conversion rate.

Example 1: Calculating Conversion Rate for a Paid Ad

A basic formula for calculating how many conversions come from paid ads is as follows:

Number of conversions/number of total ad interactions = Ad conversion rate

You can make this formula more insightful by applying more specific criteria to it. For example, you could calculate the number of conversions from a specific cohort or compare conversions to paid ad interactions that happened within a specific time frame (e.g. after a sale is announced). 

Example 2: Calculating Conversion Rate for Social Media Posts

To calculate the conversion rate for your social media posts, follow the formula below:

Number of conversions/number of total social media post interactions = social media post conversion rate 

Approximately 2.1 billion people have social media accounts, so it’s quickly becoming one of the most effective ways to advertise. But that’s only if your messaging is optimized to reach the most potential customers as possible. 

What Factors Affect Conversion Rate?

Converting prospects into paying customers will be a challenge without the foundations of a good marketing strategy, a well-thought-out sales funnel, compelling online content, impactful landing pages, and search engine optimization (SEO) that bring leads to your site. 

However, there are internal and external factors that can affect your conversion rate. Here are the ones you should know about:

Undefined or Wrongly-Defined Goals

Before potential customers can begin their journey with your product or service, you need a clear definition of what your goals are for customer conversion. 

If you’re trying to get new leads to commit to purchasing the product, but you’re seeing poor results, it might be more effective to capture their email addresses on a landing page, then target them with email marketing. 

You also want to make sure you’re not trying to get too much done at once. Like, capturing emails for a monthly newsletter subscription as well as having leads purchase a certain product while pushing existing customers to upgrade their services. Focus on pulling one lever at a time.

You’re Telling the Wrong Story, a Boring Story, or No Story At All 

Storytelling is a marketing buzzword for a reason — 92% of consumers today prefer brand-made ads that feel like a story. 

Beyond giving consumers what they want in a marketing campaign, a good story helps to set you and your business apart from your competitors and retain loyal customers. 

This is why your conversion rates are intimately tied to the way you deliver your content. 

Complexity of Transaction

How difficult or simple you make it for your potential customers to commit to the next step of your sales funnel can greatly impact your conversion rates either positively or negatively.

You only have a few seconds to capture your leads’ attention, so why throw them off-guard with unnecessary distractions such as fly-by ads and blinking banners? 

Moreover, if you make the process too intricate or time-consuming, you may end up losing your new lead before they complete that last important step.

How Can I Improve My Conversion Rate?

Now that we’ve discussed what conversion rates are and why they are important, let’s explore a few simple ways to improve your conversion rates.

  • Use a marketing analytics tool. Use a marketing analytics tool like Kissmetrics to help you assess your current conversion rate, determine who’s converting and who isn’t, and identify user retention roadblocks.    
  • Sharpen your ads. Use the conversion and cohort information you get from your marketing analytics tool to develop more effective targeted ads. 
  • Optimize your landing pages. Use short and memorable headlines that immediately engage viewers with a clear CTA. 
  • Test new ad funnels. Create new ads and a few different variations of your landing pages. See how conversion rates change with different marketing approaches. 

The Takeaway

Analyzing your conversion rates is crucial to optimizing your marketing campaigns. Not only does conversion rate indicate whether your marketing efforts have contributed to revenue generation or reduced churn, but it can reveal technical problems with your website, communication flaws in your sales funnel, or holes in your marketing strategy. Getting the best out of your conversion data will help you get the core of your customers’ needs and help solve their problems.

Not sure where to start? Kissmetrics can help. 

Click here to Request a Demo and increase conversions, make smarter decisions, and generate more customer revenue today. 






What is Statistical Significance?





Imagine you read a far-fetched news headline about a recently published study. The headline reads: “Study Shows Running in Circles Prevents Cancer”. You’d probably scratch your head in disbelief. 

Then you read on to discover the sample size was five people. And of those five people who ran in circles, one person didn’t get cancer. So was this coincidence or does the study indicate that running in circles prevents cancer? Probably the former.   

The study for such a conclusion doesn’t have statistical significance — though the study was indeed performed, its conclusions don’t exactly mean anything because the sample size was so incredibly small. 

This Kissmetrics guide will take you through everything you need to know about statistical significance and how to calculate it.

What is Statistical Significance and How Is It Calculated?

As we mentioned above, the fake study about spinning in circles isn’t statistically significant. This means that the conclusion reached isn’t valid because there’s simply not enough evidence to support that what happened was not random chance or due to luck. 

A statistically significant result occurs when you reach a certain degree of confidence in the results after rigorous testing; we call that degree of confidence the confidence level, which demonstrates how certain we are that our data was not skewed by random chance or luck. 

More specifically, the confidence level is the likelihood that an interval will hold values for the parameter we’re testing. 

Statistical significance helps quantify whether the result is likely due to chance or some factor of interest. When a new finding is significant, it means you can feel confident that it’s real — not that you just got lucky (or unlucky) in choosing that specific sample.

Calculating statistical significance accurately by hand can be a pretty complicated task that requires a solid understanding of calculus and statistics. When you calculate by hand, however, it’ll help you more fully to understand the concept. 

Follow these steps for calculating statistical significance:

  • Create a null hypothesis.

The very first step in calculating statistical significance is to determine your null hypothesis. This should state that there’s no significant difference between the sets of data you are using. Keep in mind that you don’t need to believe the null hypothesis. 

  • Create an alternative hypothesis.

Next, you’ll need to create an alternative hypothesis. Typically, this is the opposite of your null hypothesis since it will state that there is, in fact, a statistically significant relationship between your data sets. 

  • Determine the significance level.

The next step involves determining the significance level, or rather, the alpha. This refers to the likelihood of rejecting your null hypothesis even when it is true. A common alpha is five percent (i.e., .05). 

  • Decide on the type of test you will use.

Once you’ve created both hypotheses and have determined the significance level, you’ll need to determine if you’ll use a one-tailed test or a two-tailed test. Whereas the vital area of distribution is one-sided in a one-tailed test, it is two-sided in a two-tailed test. In simpler terms, one-tailed tests analyze the relationship between two variables in one direction, while two-tailed tests analyze the relationship between two variables in two directions. If the sample you happen to be using lands within the one-sided critical area, the alternative hypothesis is considered to be true.

  • Perform a power analysis to find out your sample size.

Next, you will need to do a quick power analysis to determine your sample size. This involves the sample size, effect size, statistical power, as well as significance level. For this important step, it might be best to use a calculator.   You’re going  to see how big a sample size you’ll need in order to learn the effect of a given test within a degree of confidence. In other words, it will let you know what sample size is best to determine statistical significance. If your sample size ends up being a bit too small, it won’t give you the accurate result you’re looking for. 

  • Calculate the standard deviation.

Now it’s time to calculate the standard deviation. To do this, you will need to use the following formula:

standard deviation = √((∑|x−μ|^ 2) / (N-1))


∑ = the sum of the data

x = individual data

μ = the data’s mean for each group

N = the total sample

  • Use the standard error formula.

Next, you’ll need to use the standard error formula. For our purposes, let’s just say that you have two standard deviations for your two groups. The standard error formula would look as follows:

standard error = √((s1/N1) + (s2/N2))


s1 = the standard deviation of the first group

N1 = group one’s sample size

s2 = the standard deviation of the second group

N2 = group two’s sample size

  • Determine the t-score.

For your next step, you will need to locate the t-score. Here is the equation:

t = ((µ1–µ2) / (sd))


t = the t-score

µ1 = group one’s average

µ2 = group two’s average

sd = standard error

  • Find the degrees of freedom.

Once you’ve determined the t-score, it’s time to find the degrees of freedom:

degrees of freedom = (s1 + s2) – 2


s1 = samples of group 1

s2 = samples of group 2

  • Lastly, use a t-table.

Once you’ve completed all the steps listed above, you’ll calculate the statistical significance using a t-table. Begin by looking at the left side of your degrees of freedom and find your variance. Then, go upward to see the p-values. Compare the p-value to the significance level (aka, the alpha). 

Keep in mind that a p-value less than 5 percent is considered statistically significant — this is where you’ll often see the famous (p=.05) or (p=.01) in whatever study you’re looking at. 

Don’t worry, you can easily determine the statistical significance of experiments — without any math (or headaches) — using an analytics tool like Kissmetrics

Where Does Statistical Significance Factor Into Data Analysis, and How Can It Help My Company?

Statistical significance plays a huge factor in data analysis because brands use it to understand how strongly the results of an experiment, poll, or survey they’ve conducted should influence the decisions they make. 

To give you a quick example, if a marketing manager runs a pricing study to understand how best to price a new product or service, she will calculate the statistical significance so that she knows whether the findings should affect the final price. 

Statistical significance can help you and your company immensely — and it’s pretty easy to see why. Think about it: would you rather make a critical business decision based on a study with a small sample size, or would you prefer to make that same crucial decision based on accurate statistics and testing?  

At the end of the day, data is not valid if it’s not statistically significant.

 Real Life Example: Trying to Determine the Correlation Between a New Ad Campaign and Sales

Now that you understand exactly what statistical significance is and how to calculate it, let’s take a look at a real-life example:

Let’s say you want to increase sales by attracting more customers to your growing business — so, you decide to run a new ad campaign. In doing so, you take into account how many advertisements should be made in print, and many should be made digitally. 

You rely on your past marketing campaigns using ads to forecast how many you will need of each. If you determine that your p-value is about 5%, you will end up with a result that is not statistically significant. This means that there is a greater than 5% chance that the relationship between the two ads was left up to chance. 

Therefore, this result would indicate that it’s not reasonable to use the previous ad campaign as a guide to drive in new sales. 

The Takeaway

Statistical significance is an extremely useful tool for marketers to validate their insights and provides credibility to their research. Although calculating statistical significance by hand is cumbersome, there are some incredible analytic tools like Kissmetrics that can help. 

With the click of a button, Kissmetrics can help managers and researchers alike have confidence in their business decisions by providing them with the tools they need to run accurate tests and gain valuable insight into product and marketing campaigns.  

Statistical significance is a powerful tool — are you using it? 

Check out Kissmetrics today to add the power of p-values to your arsenal to increase your product’s ROI. 





Powerful Behavioral Segmentation Methods to Understand





Whether we all like to admit it or not, our habits, emotions, and even our backgrounds play a large part in predicting our behavior. 

Many individuals have daily habits that compel them to do the same thing day in and day out. If you’re a caffeine drinker, for example, you know firsthand the impulse and daily requisite of having that morning cup.

In marketing, we want to understand who our metaphorical daily coffee drinkers are, and separate them from those who consume less regularly. 

Behavioral segmentation isn’t only about recognizing that people have different habits — it’s about optimizing marketing campaigns to match these unique behavioral patterns with a particular and eye-catching message. 

But what exactly is behavioral segmentation?

What is a Behavioral Segmentation Method?

In a nutshell, behavioral segmentation is a form of marketing segmentation that divides individuals into various groups who have a specific behavioral pattern in common. Consumers may share the very same lifecycle stage, previously purchased particular services or products, or even have similar reactions or attitudes to your messages. 

The objective is to identify customer segments to help you understand how to address the particular needs of a target audience, discover opportunities to optimize their customer journeys, and quantify their potential value to your business.

Once users are identified by their specific behavior, you can target messages and campaigns specifically tailored to these audiences. 

A few of the top benefits of behavioral segmentation include:

  • Personalization: Behavioral segmentation helps you to better understand what channels your customers and potential customers frequently visit and what type of messaging they respond to most so you can increase the number of conversions. 
  • Saves money: Behavioral segmentation helps prioritize marketing campaigns to help make your advertising efforts more cost-effective. It allows you to spend less of your time and fewer resources to generate leads in an attempt to communicate with an audience that’s not interested.
  • Makes it much easier to track success: You can easily track metrics inside each segment with an analytics tool like Kissmetrics to improve your results.
  • Forecasting: Looking at each segment’s patterns, you can identify trends to help you effectively plan marketing strategies for the future. 

Let’s take a look at some powerful methods of behavioral segmentation that you can use in your own business:

#1: Purchase and Usage Behavior

Purchase and usage behavior — or purchasing habits — refers to how customers approach the buying process. 

While there are many different ways we can classify purchasing habits, there are primarily four types of buying behavior:

  1. Complex: When a consumer is actively shopping and searching for the best solution to their problem. 
  2. Variety Seeking: When a consumer is satisfied with their brand and purchase but are open to other options. 
  3. Dissonance Reducing: When a consumer is satisfied with their purchase and despite some anxious feeling about making a change, think there is something a little better out there. 
  4. Habitual: When a consumer is loyal to their brand and isn’t considering other options. 

Purchasing behavior can help us to understand many things, such as the complexity and difficulty of the buying process, the role the customer plays in the buying process, as well as which behaviors are most and least predictive of a consumer making a purchase.

#2: Benefits Sought

Benefits sought refers to consumers picking products based on the features and solutions that are most significant to them. You can see which benefits are significant to consumers by simply viewing the types of products and services they choose. 

For instance, if customers consistently pick a low-cost option of a product or service, you might conclude that the price is important to them. If customers are engaged with a webinar about how a product or service can save them time but aren’t interested in a webinar about how the same exact product or service can help them improve performance, you could reason that saving time and workflow efficiency are more important to them. 

#3: Occasion and Timing

Some occasions are universal, like booking a suite for New Year’s Eve. Others are personal, like buying a monthly makeup subscription box. 

Occasion-based segmentation is more common than you may think. Take a look at some of the emails you’ve received in the past week. Chances are, you’ll see quite a few “occasional” emails from marketers. For instance, you might see that your beloved pizza delivery service sends out coupons or flash sale emails on Thursdays because people are more likely to order takeout over the weekends.

#4: Customer Loyalty

Keep in mind that just because a customer keeps purchasing your product or service doesn’t mean that they are a loyal customer. Customers that are constantly in need of the product or service you offer are habitual buyers, whereas loyal customers purchase only your products and services. This is a significant barrier to your competition. 

Loyal customers are important because they tend to generate most of your business revenue and are, generally, are less expensive to market to. As a result, it’s crucial to be able to identify who your loyal customers are from your regular customers. That way, you can focus your energy on building your relationship with them. 

#5: Engagement Level

Customer engagement is a valuable metric in both pre-and-post-purchase realms of the customer journey. To give you a quick example, you can use engagement-based segmentation to discover how engaged different consumers are in your pre-purchase funnel or how active existing customers are in your user community.

If a customer has a great experience with your brand, and as a result, is willing to interact more frequently and spend a little more time engaging with your company, this is usually a good sign of positive outcomes to follow. 

The more a customer spends engaging with your brand, the more likely:

  • A positive perception of the business’ brand is developing. 
  • Trust is increasing. 
  • They’re considering making a purchase
  • Their brand relationship is strengthening. 

#6: Customer Satisfaction

Are you accurately capturing how satisfied and happy your customers are at every stage of their buying journey? Doing this will give you a much better gauge of their behaviors and will help you increase conversion rate. 

Some brands make effective use of their social media channels as a customer support platform. They infuse their unique personality into each answer while also obtaining data on brand satisfaction, brand perception, and more. Others use CRM platforms or chat-based tech to create a real-time, always-open line of communication with their customers. 

By first segmenting your customers by satisfaction, you can decide on the best set of actions for each segment and then prioritize them by their potential impact on your business. 

#7: Customer Status 

Customer status, or user status, is another great way to behaviorally classify different customers by their unique relationship to your business. 

Below are a handful of the most common customer status examples:

  • Prospects
  • Non-users
  • Regular users
  • First-time buyers
  • Defectors (i.e., ex-customers who have switched to a competitor)

Besides the ones listed above, there are many other customer statuses that could be applicable to your product or service. For instance, a brand with a free-trial model might have a status for “free trial” users. 

The Takeaway 

Behavioral segmentation is an effective method for segmenting your customers by their behavior, so you can understand them better and engage with them in a more optimal way along their customer journeys. 

Using the powerful behavioral segmentation methods listed above, you can maximize your ROI, enable customers to reach their unique goals, and increase customer lifetime value. You’ll be well-positioned to build a deeper knowledge of your customer base. 

You might be asking yourself what kind of tool you can use to gather and analyze behavioral segmentation data. Kissmetrics has you covered.

Kissmetric provides advanced product and marketing analytics that can help you to get more customers, make smarter decisions, and generate more customer revenue. Don’t waste your time measuring data that won’t get you results — Kissmetrics helps you focus on the things that matter and the things that grow your business, like conversions, revenue, and, most importantly, people. 

Schedule a demo with us today and see how behavioral segmentation can help you.