Customer Lifetime Value: What is it and How to Calculate It




One of the most critical KPIs for your company to track is your customers’ lifetime value (CLV). Customers are key for any business and knowing what your customers are worth is critical. Customer lifetime value is a perfect metric for companies looking to understand the potential each new client brings to the table.

What is Customer Lifetime Value (CLV)?

Your CLV is the calculation of how much money the average customer contributes to your company over the duration of their relationship with your company. This KPI is helpful for seeing how much each customer spends and determining the true value of gaining and keeping a new customer. 

Why is CLV Important?

Customer lifetime value gives your company important insight into the potential value of each customer, making forecasting a much easier process.  It’s critical for any business to understand what each customer is worth from a financial perspective. Customer lifetime value gives your company a clear view of the financial value provided by each customer. 

For instance, when looking at customer retention, CLV is a perfect KPI to use for justifying a budget. CLV can also help determine customer loyalty programs. Discounts or incentives can be justified based on the value each customer will continue to bring to your business.        

How Does CLV Relate to Customer Acquisition Cost (CAC)?

Customer lifetime value is a great KPI to compare directly against customer acquisition cost.  When dividing CLV by CAC you then get the ratio of CLV to CAC, a sign of customer profitability and how efficient your marketing strategy is performing. 

Remember, attracting new customers to your business can be an expensive process, especially if you don’t have a clear understanding of what each customer can bring to your company. So, It’s also important to make sure CAC isn’t outpacing CLV. 

If your business model does not rely on many repeat customers, then you’ll need to account for the cost of acquiring new customers. CLV is a helpful KPI to use when setting budgets for attracting new customers. 

How Do I Calculate Customer Lifetime Value?

Customer lifetime value is a calculation of multiple data points. These points can vary from company to company depending on the products or services being offered. Kissmetrics can help you narrow in on the most important metrics for your situation with our Metrics tool. Some of the most popular data points to calculate CLV:

  • Average purchase value
  • Average purchase frequency rate
  • Customer value
  • Average customer lifespan
  • Final CLTV

Average Purchase Value

The average purchase value is a metric that represents the average cost of a purchase made by a customer. This metric will often be used alongside a metric that shows the average number of units per transaction. Average purchase value will vary widely depending on your products or services. Kissmetrics can help you narrow in on a good goal for your company. 

Average Purchase Frequency Rate

The average purchase frequency rate is the measure of how often customers are buying services or products from your business. The calculation for this metric is the number of goods or services sold in a period divided by the number of unique customers in the same period. The period for this measure can be set based on how far back you’d want the trends observed.

Customer Value

A metric that shows what value each customer brings to your company over a given period is customer value. When you combine the average purchase value and the average purchase frequency rate, you can then calculate the customer value metric. The customer value metric is also time-sensitive, so it will need to be calculated over set periods of time.

Average Customer Lifespan

The average length of time a person is an active user with your company is calculated as the average customer lifespan.  The parameters for what constitutes an active customer will depend on your business but should include customers that are spending money with your business on a regular basis. If a customer leaves for an extended period and then returns, they would most likely count as a new customer. Average customer lifespan is the final metric needed to calculate customer lifetime value.

Final CLV

In order to calculate the CLV, you need to have your business’s average purchase value, average purchase frequency rate, and average customer lifespan. With these metrics, you’ll know how valuable each customer is at any given time and how long they are likely to stay a customer of your business. These measures will then give you the CLV metric, which is key for projecting the long-term outlook of your business.

What Main Factors Affect My Company’s CLV?

Customer lifetime value is influenced by many factors in your business so it’s important to monitor all metrics that drive your CLV, but some are more important than others. For most businesses some of the key factors are:

  •  Churn rate
  • Customer loyalty
  • Customer satisfaction
  • Scalable sales and marketing

Churn Rate

When referencing customers, the churn rate is the number of customers that leave your business over a given period. Some churn is normal for all companies, but it’s key to monitor this metric and compare it to the new customers gained over the same period. Since churn rate measures how many customers are leaving your business, it plays a huge factor in your company’s CLV metric. Finding ways to reduce your churn rate and hold on to customers is an excellent way to increase your CLV.

Customer Loyalty

The customer loyalty metric is a measure of how likely it is that a customer does repeat business with your company. This metric is also set over a specific period, depending on your business type. Getting a new customer to your business is important, but bringing back a customer for repeat business is even better. Customer loyalty has a huge impact on your CLV KPI. Even slight increases in the number of customers that become repeat shoppers will yield big increases to the CLV number.

Customer Satisfaction

How happy your users are with your company is the customer satisfaction metric. Unlike the other metrics, feedback from customers is required to measure customer satisfaction. Tools like feedback forms, surveys, product reviews, and other rating forms can be combined to create an overall customer satisfaction metric.  Customer satisfaction has an indirect effect on many metrics, most importantly CLV. No matter what products or services your company offers, customer satisfaction should always be something a company strives to improve.

How Can I Improve My Company’s CLV?

Improving your company’s CLV is vital to the growth and success of your business. A few great ways to improve your CLV are:

  • Email and SMS retargeting
  • Loyalty programs
  • Open communication
  • Effective onboarding

Email and SMS Retargeting

Some handy tools for helping convert more sales are email and SMS retargeting. It’s important to collect existing, and if possible, new, email addresses or phone numbers from your customers in order to send them retargeting content. Emails or SMS can contain things like requests for product reviews, reminders to finish checking out a cart, sales notifications, new product alerts, and other notifications to get them back to your business. These are great ways to get more customers back to your site, increasing your CLV metric.   

Loyalty Programs

Creating a system that rewards customers for staying with your company would be considered a loyalty program. Signing up for emails or SMS could be an effective option for loyalty programs. As customers spend more money, the rewards could increase, giving increased incentives for the customer to remain loyal to your company. Rewarding top customers helps customer satisfaction and increases CLV.

Open Communication

Creating open channels of communication helps build customer trust and holds your business more accountable. Gathering customer feedback to look for improvement is a good example of open communication. Customer opinions can often provide insight on products or services that may not have been previously considered. Having a quick and responsive customer service department is a great way to achieve open communication with your customers. Better interactions with customer service improve a customer’s satisfaction which helps to increase their CLV.

Effective Onboarding

Customer onboarding is key to setting up a good relationship with new customers. Making sure customers get the proper information about your products and services maximizes the value your company delivers. The onboarding process can also be about teaching customers how to work with your business. It’s a good opportunity to establish a good line of open communication, critical for improving CLV.


While the calculation for CLV may vary slightly by company, the importance is high for all companies. When making decisions in your business, always keep CLV in mind. Kissmetrics can help you track your CLV and other important KPIs. Company growth and success depend on a strong customer base that continuously returns to your products. 



The Case for Customer Value as your Lead Metric in 2021

The Value of Open Lines of Communication with Customers

The Four Secrets Of Achieving Customer Satisfaction

Customer Analytics: What It Is and Why It Matters






Understanding customer behavior can be a challenge for some businesses. To gain a better idea of your customer’s mindset, you need data about customer behavior. This data can help shape your strategies and processes to create better customer interaction and lead to higher product satisfaction. 

Gaining customer insight through data is key to success for modern businesses. The process of gathering customer data to help make decisions in your business is called customer analytics. 

Customer analytics can be broken down further into two types of analysis: market segmentation and predictive analytics. Here, we’ll discuss how to gather your customer data

Market Segmentation

The market your company targets is likely large and diverse, but targeting all customers with the same tactics can be ineffective in increasing profits and growing your market reach. 

Market segmentation is the process of dividing your customer market into smaller segments based on customer characteristics or traits. By dividing your customers into groups, you can target these groups with specific ads based on their habits and where they are in the buying process. Market segmentation will also allow you to see which type of marketing is most effective for each segment. 

Social media may be the best form for one group, while emails may be more effective for another. The messaging in your advertisements can also be changed from segment to segment. This will help your company resonate with all customers no matter how different they may be from one another. 

Market segmentation is a vital strategy for companies looking to create efficient marketing plans to grow their customer base.

Predictive Analytics

Studying current and historical data to make predictions about future events is considered predictive analytics. Predictive analytics has many uses across many industries, and sales and marketing are no exception. 

By analyzing historical trends of customers, you can start to make predictions about future actions. Many outside factors can affect customers’ shopping habits, such as weather or stock market performance. By looking at historical trends of customers during certain events, you can start to make better predictions about future customer behavior. 

Predictive analytics can also be used on your company’s current customers. Analyzing the behavior of new customers can help recognize patterns such as how long customers spend browsing your site or what products long time customers tend to focus on. 

This can help you predict how future customers will act and allow you to tailor your site to fit their needs.  

What Is the Goal of Customer Analytics?

With customer analytics you gain greater insight into how your customers or potential customers behave which allows you to make more educated business decisions in the future. 

The goal is to move away from a hunch about how your customers will react and use data to back up your future actions. Some businesses stay with certain processes out of tradition but customer analytics can give teams the power to see if traditional lines of thinking are working for the business. 

Kissmetrics has successfully helped several businesses leverage their customer analytics.

How Do You Use Customer Analytics?

Once you’ve started gathering customer analytics data, you need to create actionable items. Some ways to use customer analytics are:

  • Direct marketing
  • Site selection
  • Customer relationship management

Direct Marketing

A marketing message sent straight to a consumer would be considered direct marketing. Forms of communication like personalized text messages, emails, or social media messages would be direct marketing. 

Messages can be tailored to users in specific situations using the data gathered from customer analytics. For example, targeting new homeowners with home improvement products will result in a higher conversion rate compared to a mass email. 

Direct marketing can also be targeted to users who have visited your site but did not make a purchase. Sending a reminder message with details about the products they viewed would be a perfect use of direct marketing.  

Site Selection

Choosing the location of a new store or site is an important process for any company. By using user analytics, your business can get a narrowed view of what sites or locations would be successful by analyzing your customer base. 

Knowing where your current customers frequent is key to selecting a good location. If you’re looking to grow your user base, it’s important to look at predictive analytics to see where your company’s best potential growth area is.

Customer Relationship Management

Customer satisfaction is a key metric for the success of all businesses. Customer relationship management is the focus of analyzing how a business interacts with its customer. Using large amounts of data gathered during user analytics makes it easier to understand what communication methods and styles work best with your customers. 

If your business caters to younger users who frequent social media, you may find it best to communicate with users via a social media platform.

Why Does Customer Analytics Matter?

Gathering and analyzing large amounts of data on your customers can be a challenge for some companies. Some of the big reasons you should be collecting customer analytics are because you can:

  • Increase sales
  • Lower customer acquisition and retention costs
  • Reduced customer churn
  • Increase customer loyalty
  • Increase marketing and promotion ROIs
  • Increase sales force effectiveness

Increase Sales

Targeted advertising using customer analytics means customers see ads tailored for their needs and wants. This more effective way of advertising leads to more customers and increased sales for your company.

Lower Customer Acquisition and Retention Costs

Gaining and keeping new customers can be costly for some businesses, so if customers are leaving, it’s important to understand why. The data provided from customer analytics can give you insights into customer dissatisfaction.  

Customer analytics can also show you what potential customers are interested in and what features would drive them to a new product. By having this information at your disposal, you can target the proper customers saving you customer acquisition and retention costs.

Reduced Customer Churn

Customer churn rate is a measure of the number of customers that leave your company over time. Gathering data on why customers leave would be part of your customer analytics dataset. 

Gathering information on what’s driving customers away is the first step to fixing customer churn.

Increased Customer Loyalty

Keeping customers loyal to your company is a great way to strengthen sales and increase your bottom line. Customer analytics can give you data on why customers choose your products and what keeps them loyal to your company. 

By understanding why some customers don’t return to your site, you can adjust your products or services to suit their needs better.

Increased Marketing and Promotions ROIs

Running marketing ads and promotions can be expensive for any business. Spending money advertising to customers who have a low chance of buying your products is not a good use of resources. So by ensuring your ads and promos are targeted to the right audience, they’ll be more effective and thus save you money and increase your ROI.  

Increased Sales Force Effectiveness

An easy way to help your sales team is to provide them with good customer analytics data. Information on what markets are performing well and what details customers are interested in is a great way to help your sales team be more effective. 

By using predictive analysis, you can give your sales team a better idea of where the market will move to allow them to plan for upcoming changes.

Conclusion: How Can I Optimize Customer Analytics for My Business?

The process of collecting and analyzing customer analytics can be a large task for businesses. 

Knowing what metrics are important to your business and how to track them is key for proper analysis. In addition, using the correct tool to gather customer data is necessary to create effective plans to improve your business strategies.

Customer Analytics is something all companies should be collecting and analyzing. Properly utilizing this data can lead to higher customer satisfaction and cost savings for your marketing campaign. By having the proper information, you can target your audience and convert more potential customers.

Visit Kissmetrics for more ideas on optimizing your user analytics. 



  1. Market Segmentation Definition | Investopedia
  2. Direct Marketing Basics | The Balances MB
  3. How To Prevent Customer Churn With A Simple Phone Call | Forbes

Role of Big Data Management and Analytics in Higher Education






Analytical skills are in high demand today. Every professional has to do some analysis at a certain point of career growth. Globalization and digitalization turn personal lives and work into massive amounts of data.

The world generates information faster than ever. To swim in this torrent of data, people need to embrace everything it offers and use it for their good. To do so, we need collection, systematization, analysis, and predictions based on this analysis. Here the big-data method takes the reins. 

What Is Big Data?

The definition of big data (BD) usually means enormous amounts of information. Its primary quality, besides the scale, is the fact that it is unsystematic. Such data usually resides in some digital medium. Yet, big data is too extensive to use traditional means of structuring and analytics.

Each time a student decides to buy concert tickets online or pay for essay, they leave a digital footprint. These actions and the user information become a part of the worldwide dataset. Search engines study their users to teach AI how to make better predictions. This digital footprint will later help show more relevant suggestions.

So, BD also means technologies for the search and processing of unstructured information. It helps get practical knowledge in all areas of human activity, including education.

Do not mistake data analysis (which is every instance of analysis) for working with BD. The latter is a much more complex structure.

Until 2011, the BD technologies were used just for scientific analysis and had no practical application. Yet, the data avalanche grew exponentially, and the problem of immense amounts of unstructured and heterogeneous information became urgent.


How Does This Technology Work?

To put it simply, imagine a supermarket where all goods are placed in an unusual order. 

For example, you find bread next to the fruit stand, and tomato paste – on the rack with detergents, avocados, and magazines. Big data is the marketing manager who puts everything in its place and helps find the food you have been looking for. Besides, it tells the price and expiration date and also who buys such products and why. The algorithms could suggest some dishes that include the ingredients in your shopping basket as well.

To add the prefix “big,” the dataset must fall under the three “V” rule.

  • Volume – data is measured by physical value and occupied space on a digital medium. When it reaches beyond 150 GB per day, then we can call it big data.
  • Velocity – it implies real-time processing and its high capacity.
  • Variety – information can come in heterogeneous formats and have little or no structure. 

Modern systems add two additional factors to this set.

  • Variability – data streams can have peaks and troughs, seasonality, and periodicity. 
  • Value – this parameter is subjective. To put it short, different types of information need different processing methods and vary by a wide margin. 

For example, messages from social networks represent a basic level of data. But secure transactions of a high-performance online paper writing service are from a much higher level. 

The task of machines is to determine the degree of importance of the incoming information to structure it as quickly as possible.

Impact on Education

Like any other sphere of life, the educational process generates data. There are five main types of data there:

  • forecasts (includes all predictions deriving from the analysis of points 2 through 5);
  • personal info (of all students and staff members);
  • administrative information;
  • data on the use of electronic learning aids like online lectures or digital textbooks;
  • reports analyzing the efficacy of the available learning materials.

Today, BD has become the language of communication for educational organizations that seek to improve their strategic and tactical approaches.

Big data technologies help improve and simplify the quality assessment of the educational environment. If done right, digital technologies simplify the process of tracking students’ grades and identifying issues of the learning process. 

This method of working with information shortens the response time of colleges and universities to the shifts in society. It prompts the scalability of educational processes and their readiness for a quick change. It also tracks changes and trends in the selected sector. BD’s capabilities are not yet sufficiently used to improve the quality of educational activities. 

As we already mentioned, the essential benefit of the big data method is the predictive analysis option. For example, analytics tools can predict the results of strategic decisions. They are essential for improving management efficiency and ensuring a customized approach to all students.

When Theory Meets Practice

In 2013, the University of Nottingham Trent, England, introduced an interactive system displaying students’ performance assessments in the form of a dashboard. It showed info on student engagement in the educational process. The dashboard was designed to reduce student dropout rates, improve attendance, and increase a sense of belonging to the community. 

The dashboard was a panel available to students, teachers, and tutors. The board displayed involvement indicators of each student. So, everyone could come up there and evaluate themselves as compared to their classmates. The dashboard featured the following parameters:

  • library visits frequency;
  • the courses taken by the students;
  • extracurricular activities;
  • volunteer work;
  • classes attendance; 
  • other educational indicators, including grades.

Thus, any student was able to see their activity in comparison with peers. So, they could determine what aspects demand extra effort.

If a student did not show signs of activity within two weeks, the platform automatically sent notifications to tutors. The latter could quickly contact the student and support them. Three years into the project, the results of the university survey showed that 72% of undergraduates used this student dashboard, and it inspired them to invest more time and effort into the educational process.

Advantages of Performance Analysis

A deep multifactor analysis helps educators better understand their students. There are so many cases describing students left behind because of a low grade in one subject. Some of those individuals suffered from depression, others had family issues, and so on. 

A quick analysis of the students’ digital will help avoid aggressive behavior and bullying.

It will be possible to overcome the concept of educational inequality to reduce the barriers to learning for people with disabilities. 

Although not every student is a prodigy, bringing them to the average level will become possible. A key is a personalized approach. A teacher will know what learning aids (visual, audio, or interactive materials) give better results.



The pandemic initiated massive shifts in education and its move online. Hopefully, in a couple of years, it will help optimize the learning process. The main aim now is to make it more suitable for both the C-grade and the A-grade students. There are a lot of dependencies when using big data that are not all discovered and used yet. More improvements are yet to come.

The 5 Most Important Onboarding Metrics to Measure





One thing all businesses have in common is that new users are required for growth and long-term success. But new users don’t often know all the details of your products and services so you have to educate them as to their benefits through a process called onboarding. The onboarding process looks different for every company and industry so you might have to iterate onboarding until you have the process that sits at the nexus of cost-effective and customer satisfaction.  

In order to make your onboarding process as efficient and effective as possible, it’s important to gather data to clarify what needs to change.

What is User Onboarding?

User onboarding is the introduction of users to your business and products. In this early phase, users will learn about your offerings and what value these products can bring to them. 

Onboarding also includes teaching the users how to navigate and implement your products and how to maximize their value. This can include helping them get products or services up and running or helping them transfer over from a competitor’s set of products or services.

Because this is the first phase in which users will start to interact with your business, it’s crucial that your onboarding process is well thought out, as it sets the foundation for their relationship with your business. The user onboarding phase will also consist of answering any questions or concerns your users may have while you guide them through the process of adopting your product or services. 

In a nutshell, user onboarding is the process of taking new users and transforming them into existing users. 

Why is User Onboarding Important?

First impressions are key when introducing users to your product or business. A poorly executed onboarding process is one of the main reasons users leave and move on to competitors. A well-executed user onboarding process will ease the burden of user retention and will increase overall user satisfaction. 

Another reason user onboarding is important is that it is a great opportunity to teach the users about your company’s different offerings and potentially upsell. Potential users may have arrived at your company because of one product or service, but that doesn’t have to be the only product or service they end up choosing. 

During the user onboarding process, you may discover that different products or services fit your users’ needs. Selecting the appropriate products and services for your users will help them get more value from your company. Learning the best fit for your users during the onboarding process will lead to higher satisfaction and consistent growth for your business

How Long is the Onboarding Process?

The length of the user onboarding process depends on your industry and business model. For a company selling simple products and services that are somewhat self-explanatory, the onboarding process will be simple and straightforward. Some new users may be looking for a quick and easy order process that will save them time. In that case, your onboarding process should be fast and efficient, providing the most value to the users. 

For companies selling complex products or services, the onboarding process should be detailed enough to give the users all the necessary details. The onboarding process should teach them the proper ways to use your products or services which will increase the likelihood of user retention. 

How is Onboarding Measured?

It’s critical you track the appropriate metrics for your business and situation.  Some of the most important onboarding metrics are:

  • Completion time
  • User progression
  • Product adoption rates
  • Escalation response time
  • User response rate

Completion Time

The length of time it takes your users to complete the onboarding process is measured as the completion time. A good completion time will vary depending on your product and service lineup but a good rule of thumb is the quicker the better. You want to get people using your product or service while they’re still excited about it. 

Additionally, a long completion time could mean a complicated onboarding process that may lead to lower user satisfaction. For example, a long completion time may result in a low completion rate, which in turn leads to a low growth rate. 

By contrast, a low completion time may mean users are not getting enough information during the onboarding process. This could also lead to lower user satisfaction and poor user relations. 

User Progression

User progression is a metric used for tracking a user’s progress during the onboarding process. If your company’s onboarding process is complicated or your user retention rate is low, user progression would be useful to track. 

Understanding where users are in the onboarding progress can help identify bottlenecks in your process. Keeping your onboarding process as efficient and easy for your users as possible is a smart approach to grow your business. 

By monitoring your user progression metric, you get a clear sense of how smooth your onboarding process is. 

Product Adoption Rates

When analyzing the number of users who successfully adopt your product, you are looking at the product adoption rate metric. This metric is a calculation of the percent of users who go from being one-time users to repeat users of your product. 

While one-time users may provide some quick wins for your company, they are usually not the users that will lead to the long-term success of your company.  Product adoption rate is critical for subscription-based businesses looking to convert users after free trial periods. Subscription-based companies need active users in order to maintain their user base and product adoption rates measure how many users are being converted to active users. 

Escalation Response Time

When your users are having an issue and open a case or ticket with customer success, it’s critical that their problem is resolved quickly. Escalation response time is a measure of how long it takes customer success to resolve or close tickets that have been escalated (typically beyond the first level of support). 

The first level of support could be a FAQ page or automated chat support, while the second level of support usually includes some type of human interaction (either chat or phone). 

Escalation response time is a useful metric to track if you have concerns about your customer success performance and how it affects onboarding and user adoption. This measure will be different for each company because it hinges on how well your customer support system is set up.

User Response Rate

User response rate can give you a real look at the percentage of users invested in your products. 

When sending out surveys or feedback forms, the user response rate is the percent of users that respond to your inquiries. While it’s essential to track metrics about your user’s behavior, it’s also important to get real feedback from users about how your company is performing. 

The user response rate indicates how many users are currently active and how much they value your product. If users are not responsive to your company’s attempts to reach out for feedback, they may not be invested enough in your products or services. 

How Do I Track User Onboarding Metrics?

There are many options when looking to track user onboarding metrics. Gathering data and understanding how to set up metrics that align with your business model is key.  

It’s important to monitor your onboarding performance to grow your company and increase user satisfaction. Kissmetrics has excellent solutions for tracking onboarding metrics for your online business. 

Why Do User Onboarding Metrics Matter?

User onboarding metrics provide insight into what it’s like to become a new user of your products or services. Maybe user onboarding is a strong performance area for your company, and you’re looking to maintain its positive impact, or perhaps user onboarding may be an area your business is struggling so you need to understand where the process can be improved. 

User onboarding can be a complicated process to track depending on your business model. Despite the difficulties, user onboarding is a critical process for any company looking for long-term success. The new user onboarding process sets the tone for what the experience of being an active user for your company will be. 

Having the right metrics in place is critical to make sure that the first impression your business makes is the right one. 


User onboarding metrics provide essential information on how your company first greets its users. Onboarding can be a long process depending on your products and services, making it vital that the process is smooth and valuable for your users. Ensuring your user onboarding process sets a good tone and creates a positive experience is a key to growing your business and creating positive user feedback. 



Customer Onboarding | Gitlab

User Onboarding: Not Just for HR and Growth Hackers |

Growth Hacking: Creating a Wow Moment | For Entrepreneurs

The Importance of Understanding Qualitative Data




Qualitative data is a non-numeric measure of data best used for describing characteristics or qualities. Qualitative data is most frequently obtained from surveys, feedback forms, focus groups, or other forms of personal feedback. This data can also be recorded from a third-person perspective, such as recording someone’s reaction to a new product. 

Qualitative data is important for ecommerce and SaaS because it’s a way to measure customer feedback and product reviews. Kissmetrics can help you organize your data collection and break down your data types.

What Is the Difference Between Qualitative and Quantitative Data?

Quantitative data is a numeric measure of data. A good example of quantitative data would be the number of sales recorded over a specific period of time, the number of new customers over a period of time, or the churn rate. This type of data is objective, meaning it is not based on opinion and is a fact that can be measured in quantity. 

The main difference between qualitative and quantitative data is that qualitative data is non-numeric. 

Both types of data are important when measuring the performance of your company or a specific product. For example, solid quantitative data is important for measuring financial data or sales data, which are good indications of company growth. 

On the other hand, measuring qualitative data such as product feedback or customer satisfaction is needed to make sure your products are successful in your customer’s eyes.

How Can I Collect Qualitative Data?

Collecting qualitative data can be more of a challenge than collecting quantitative data, but qualitative data is essential for businesses hoping to gather customer feedback. If you’re struggling to collect qualitative data, Kissmetrics has the experience to help you. Some of the different options for collecting qualitative data include:

  • One-on-one interviews
  • Focus groups
  • Observation
  • Longitudinal studies
  • Case studies

One-on-One Interviews

Conducting personal one-on-one interviews is a proven way to get good qualitative data.  Interviewing a current or potential customer can provide honest feedback about your products or company’s perception. 

While one-on-one interviews may seem more time-consuming, virtual interviews are common and much easier to arrange than in-person interviews. It’s good to have a mix of your typical users interviewed for feedback on your product performance in order to gain information about a variety of demographic groups. 

It may also be helpful to interview potential customers to understand their current product choices and why your product hasn’t been used. If possible, one-on-one interviews with former users can provide valuable feedback on why your product did not work for that user. 

The qualitative data from interviews is important to get a view of the perception individuals have of your products.

Focus Groups

Focus groups have been used in several different fields to collect qualitative data from small groups of people. For marketing purposes, focus groups will be guided by a proctor who asks questions about companies and products in your field of interest. This format promotes free and open discussion about topics concerning your company and products. 

Focus groups can be used in the early phases of product development when companies are trying to get feedback on a new product or concept. You can also use focus groups to test product usability. Having a focus group test a website’s usability can get valuable qualitative data feedback for your developers.


Observing your customers as they use your products is another way to get qualitative data.  This method requires the observer to collect data and record interactions between the user and the product. Observing users without any dialog provides a realistic view of what users struggle to accomplish when using your product. 

Some companies will go so far as to not give the customer any instructions and simply set the product in front of them to see what they do. Do they read the instructions insert? Do they navigate to the “Help” section? Do they immediately start using the product? This helps companies see how new users react to a product the first time they encounter it. 

Your products must be simple and intuitive for new customers unfamiliar with their layout. Observing where the user’s eyes go and how they handle confusing situations can help designers create friendlier layouts. Qualitative data from observation can transform your products into well-thought-out solutions.

Longitudinal Studies

Another way of observing user behavior on a larger scale is a longitudinal study. Often, longitudinal studies involve following the same people or users over an extended period of time to track their behavior. 

These types of studies are often used in the medical field to track the long-term success of medication or surgeries. For tech companies, a long-term study of their users and their habits can help organizations to understand the impacts their products have on users. 

Longitudinal studies can reveal the habits of users, which could help developers shape new features. By knowing the patterns users tend to follow, developers are able to create software that is designed with these habits in mind. If you’re looking to understand what frustrates users, longitudinal studies can also be insightful. Perhaps a situation users didn’t put much thought into at first glance can become a real headache after long periods of use. 

Longitudinal studies may require the most effort but can yield beneficial results.

Case Studies

When looking to do a deep dive on a particular topic or situation, a case study may be the best option. Case studies for websites may be a detailed look at an issue that doesn’t have an immediately obvious solution. 

It may involve observing a small group or a large segment of your user base, but it’s best to have the scope of the issue narrow. A case study on why new customers aren’t using a particular feature may help understand how you can improve the product. 

At the end of a case study, you may only have a theory or hypothesis because case studies do not always lead to a concrete solution, but your team is likely to be headed in the right direction. 

Case studies can also provide a good platform for advertising your product. By showing potential users a real-world problem and how your product solved it, users can see the firsthand value of your product. 

The qualitative data gathered from case studies can provide a detailed look at a specific situation you need to be analyzed.

How Can I Analyze My Qualitative Data?

Once you’ve collected your qualitative data, it needs to be properly analyzed in order to be usable. Two ways you can analyze your data are deductive analysis and inductive analysis.

Deductive Analysis

When performing deductive analysis, you start with a theory and try to prove it. An example could be “new users are having trouble completing a setup wizard.” From that theory, you would form a hypothesis about why the problem is occurring, such as “the final questions on the wizard are confusing to new users.” 

From that hypothesis, you could then collect data around the issue that your users are experiencing. The first step would be to gather feedback from new users completing the setup process. Once you have the data relevant to the hypothesis, you can then analyze and evaluate the results in order to improve your product. 

Perhaps you find that new users don’t understand the wording of the final questions in your setup process. Based on this information, you could reword your final questions to make them clearer 

While deductive analysis can be helpful, you must start with a theory in order to use this method. If you don’t have a theory, then Inductive analysis is the proper way to analyze your data.

Inductive Analysis

When you have little to no idea regarding an issue you want to analyze, using inductive analysis is more practical. Inductive analysis is the process by which you would form a theory regarding a situation. 

The first step is to start with an observation such as “a new user did not complete our setup process.” From this observation, you could look for patterns. For example, you might observe that half of the users in that focus group did not complete the setup process, which would indicate a pattern. After a pattern is established, you can then form a theory like “the users did not understand the questions in the setup process.” 

This form of analysis is limited because you can form theories, but you need more data to prove or disprove that theory. After using inductive analysis to form your theory, you could then begin to solve the issue using deductive analysis.  

Why Is It Important to Understand Qualitative Research?

When dealing with issues in your business, a numerically based report cannot always tell you the root issues in your products. The voice of your customers will be represented in qualitative data, so it’s important to understand what is being said. 


Researching issues is a process that takes time, so understanding the best route for your business is key to being efficient. Kissmetrics can make it easy for you to collect and understand your qualitative research.  

How Can Qualitative Research Help My Business?

Qualitative research is needed to track and resolve real issues your customers may face when using your product. Customer issues need to be tracked and analyzed, and that data is often collected through qualitative research. 

It’s also important to research how to grow your product and reach out to new customers. Gathering feedback from people not using your product will help you see ways to expand your footprint in the market. Researching the voice of users and non-users is a great way to get their perception of your products.


Understanding qualitative data is necessary for companies looking to see what their customers think of their products. This non-numeric form of data goes beyond sales numbers and conversion rates to look at what customers say and feel about your products. Make sure it’s something you take the time to collect and analyze to improve your product delivery. 



  1. All Guides: Data Module #1: What is Research Data?: Qualitative vs. Quantitative |
  2. Qualitative vs Quantitative Research |
  3. Case Study Method in Psychology |

The 6 Best Customer Retention Strategies to Maximize Customer Lifetime Value




Improving customer retention should be at the top of every company’s to-do list. After all, it’s much easier to keep existing customers satisfied than it is to find and attract entirely new ones. Customers who’ve already taken a chance on your company are a valuable asset and smart companies leverage that existing relationship. 

If you’re ready to explore how customer retention strategies can increase your company’s profits, Kissmetrics has all the information you need here. 

What Is Customer Lifetime Value?

Customer lifetime value or CLV is a metric that measures the amount of profit your company makes from a single customer. To estimate a customer’s lifetime value, you’ll need to do a few calculations. The first one is to average customer expenditure per visit. Then, calculate the average number of visits or purchases per year. Multiply those numbers together to get your customer revenue for one year.

You’ll then need to predict the number of years you expect your customer to stay with your brand. Multiply that by your original number. Depending on what you’re selling, those purchases will ideally continue for many years to come.

Why Is Customer Lifetime Value Important?

Studies have shown that it is more cost-effective to retain existing customers than to attract new ones. The higher your CLV is, and the more customers you retain, the more profitable your company will be. 

Ideally, you would want a customer to purchase your products for the rest of their life. That’s unusual, but not unheard of, depending on your industry and the products you’re selling.

How Can Customer Retention Help Maximize Customer Lifetime Value?

Your CLV is innately tied to your customer retention. If customers only use your services on average for around a year before churning, your CLV will be lower since it only encapsulates purchases made within that year. 

However, if you increase your customer retention and see people staying loyal to your company for longer, they’ll have longer to purchase your products. 

How Can Companies Increase Their Customer Retention?

Increasing your customer retention is crucial for saving on customer acquisition costs and optimizing your profit. There are various ways for companies to increase their customer retention, as we address in the sections below. 

Increase Repeat Customer Rate

If you’ve noticed most of your customers only use your service for a few months, you’re likely losing money since that won’t cover the customer acquisition costs. However, if you can encourage customers to pay for an annual subscription instead of a monthly one, you’ll likely increase your repeat customer rate since your customers will have more time to experience the benefits of your service.

One way to entice customers to sign up for an annual payment plan is to offer a discount when compared to the monthly plan. Even with the discount, ensuring that customers stick around for longer and decreasing your churn rate is still more profitable than having customers churn every few months. 

This is especially true if you’re constantly introducing new features or offer a comprehensive service plan. Often a few months isn’t enough for a customer to fully experience everything your company has to offer. Still, by staying in the plan for a full year, customers will be more likely to renew when their subscription expires. 

Increase Purchase Frequency

Another way to increase CLV is to require a customer to purchase your products or services more frequently. An example of this is rolling out your software in pieces and delaying the pieces. By separating services or features into separate packages, your customers will have to purchase your updates as they come out which increases purchase frequency.

Your company could develop and release a new version of your product each year. If you can improve upon your product, you’ll entice some existing customers to upgrade whenever you release something new, instead of waiting for their old product to break. 

Increase Average Order Value

Upselling is one of the oldest tricks in the book, and if you can routinely upsell your customers, their CLV will naturally increase. For example, if your company provides a streaming service, you could pre-set the boxes checked for additional channels. A customer would need to physically uncheck the box in order to not have extra channels bundled into their channel package.

Since the box is pre-checked, the customer may opt to pay the additional cost and complete the purchase. By increasing their average order value, streaming services increase a customer’s lifetime value. 

Use Email and SMS Retargeting

While many companies engage with their existing customers via email or texting campaigns, you’ll want to ensure that your messages aren’t regarded as spam. To do that, you should create valuable content for your customers. This can come out of customizing or personalizing your messages. 

It doesn’t have to be completely personalized, for instance, simply reminding customers how much they’ve saved by subscribing to your loyalty program might be an incentive to stay loyal to your company. Use the opportunity to explain the benefits of your company that your customer has already gained, instead of simply advertising your next big hit. 

With Kissmetrics’ email tracking tool, you can monitor the number of customers who open your email and click through to the URL you provided inside. That way, you can see whether your current email campaign is successful or if you need to tweak some things. 

Use Customer Accounts

When you offer customer accounts, you enable a personalized experience with your company. Whether that means offering occasional promotional discounts on products, adding them to your email list, or saving their information for faster checkouts in the future, the majority of customers will feel more engaged with your website if they can log in to their account. 

Customer accounts are also the perfect place to add recommendations based on previous subscriptions or purchases. Although some products are fine on their own, many require additional components. For example, if you are selling clothes and a customer has a shirt in their cart or has recently bought a shirt, your website could recommend matching pants or a jacket. 

Improve Customer Support

One of the reasons that customers churn is due to poor customer support. Depending on your industry, customer support might not be crucial. But if you offer SaaS or are in the tech space in any way, you should ensure that your customers have plenty of ways to contact customer service/success. 

Waiting on hold for several hours and having someone answer questions quickly and efficiently through a Live Chat can be the difference between a customer churning and staying loyal to your company. 

Additionally, ensure that your support team is knowledgeable and knows who to contact if they can’t solve a customer’s issues. Apple is well-known for having excellent customer support in the form of the Genius Bar in their stores, and that makes a big difference to customers who are already frustrated with something going wrong. 

How Do I Measure Customer Retention?

Kissmetrics can measure customer retention by monitoring churn rate, the opposite of customer retention. You can also look at the number of active users in a given timeframe and subtract the number of new users to see how many users are returning customers. 

You can also measure customer satisfaction through surveys like the Net Promoter Score or NPS. It asks customers a single question: How likely are you to recommend our company to a friend or family member? They’re given the options of one through ten, with one being the lowest score and ten being the highest. 

Anyone who rates your product one through six was likely dissatisfied with your product and is classified as a detractor, while anyone who ranked nine or ten is a promoter. Promoters are most likely to become return customers. After subtracting the detractors from the promoters, you should know the percentage of customers who plan to purchase again. 

How Do I Know Which Customer Retention Strategy Is Right for My Company?

Depending on your industry and whether you’re selling a product or a service, any or all of the suggestions above might be appropriate ways to increase your customer retention. With Kissmetrics, you can learn more about your customers, see what they want from your company, and rise to meet those expectations. 


Determining the right customer retention strategy requires you to know your customers and understand what they want. When you know your customers’ needs, you can work to fulfill them and continue to appeal to those users by reminding them periodically that you value their purchases. By retaining your customers, you’ll see an increase in company profits and decreased customer acquisition costs. 


Check out our website for more information on the metrics for monitoring customer retention and how we can help you improve. 



  1. 12 Proven Tactics to Increase Your Customer Lifetime Value (CLV) |
  2. 10 Tactics For Increasing Your Customer Lifetime Value and Loyalty | Neil Patel
  3. How to Optimize Customer Lifetime Value (CLV)—15 Effective Tactics That Every Marketer Needs to Know |

Customer Loyalty: How to Measure and Increase Loyalty






Every company wants one thing: loyal customers. Loyal customers who are excited to try out new products and services when they come to market. Customers who leave great reviews and help advertise your brand through word-of-mouth and their social media. Customers who stay with your company for many years.

But what does it mean to have a fanbase of loyal customers? How do you know whether your customers are returning over and over again or just people searching for the best price? Most importantly, how can your company promote customer loyalty? 

We cover all of that and more below. 

What is Customer Loyalty? 

Customer loyalty means that someone will continue to choose your company’s products or services instead of trying out your competition. The more loyal your customer base is, the more they will tolerate accidental missteps and higher prices. 

Loyal customers are excited when you announce a new product on social media. They leave your company great reviews online. They might even help you with advertising by spreading the word themselves. 

A loyal customer will continue to shop from your company even if a competitor offers a similar product for less because they know they can trust you. 

Metrics Used to Measure Customer Loyalty

Measuring trust in your company might seem tricky. However, some essential metrics will show what your customers think of your brand and how likely they are to continue shopping with you or using your product. 

Net Promoter Score

The Net Promoter Score, also known as NPS, allows you to measure your customer loyalty by directly asking your customers the question: how likely are you to recommend our service/product to a friend? The customer fills out a questionnaire where they can rate your brand, product, or service, usually on a scale of 1 to 10. 

When evaluating your company’s scores, grade them as you would a test at school. 1-6 is not what you want to see. Those numbers mean the customer had a bad experience and is likely to recommend that others don’t use you in the future. A 7 or 8 is considered neutral. But if you see 9s and 10s that means customers had a great experience and are likely to tell their friends about it.

Finding your NPS means subtracting the percentage of your customers with bad experiences from the percentage of 9s and 10s. This score may not give you an insight into what to change specifically, but it does give you a good idea of how customers are experiencing your brand. 

Customer Lifetime Value

Customer Lifetime Value (CLV) measures the total profit a single customer is expected to bring to your company during their entire relationship with you. This includes all of the years they will be buying replacements, new editions, resubscribing, everything. 

Repurchase Rate

Repurchase rate may not apply to every industry, but it is an important KPI for companies that sell products with short lifespans. 

The repurchase rate measures the number of customers who buy the same item a second time within a given period. 

Upsell Ratio

The Upsell Ratio looks at customers who spent more money than they had planned to when they visited your company’s store or website. 

For example, what if someone planned to buy a cell phone, but while at the store they see a case they like and decide they also need the bluetooth earbuds the salesperson suggested. That would be an upsell since the customer ended up paying more than they initially planned.

Customer Engagement Score

Like the NPS, Customer Engagement Score is a single number that represents the experience your customer had with your company by looking at how often they interacted with your brand and their repurchase rate. 

What is the Customer Loyalty Index? 

Customer Loyalty Index is an alternative to Net Promoter Score, which, as discussed above, is a way for customers to rate their experience with your company. 

However, understanding customer loyalty requires more than a single number if your company wants to find any actionable suggestions from the information.

The CLI measures a variety of inputs on a scale of one to six (one the best and six the worst) to give your company a better picture of how to improve your customer experience. 

Repeat usage

One of the metrics in the CLI asks customers how likely they are to use your brand’s products or services again in the future. 


Another question the CLI asks is how likely the customer is to try other products by your company. Their orders may expand if they’re loyal to your brand and trust you enough to give other products a try.


Measuring the actions of your customers is crucial. Loyal customers may interact on social media with your brand, discuss their experiences with others, sign up for your mailing list, and much more. 


Tolerance refers to how much negativity a customer will deal with before losing their loyalty. Does one bad experience with a customer service representative mean they won’t use your services again? The more loyal a customer is, the higher tolerance they will show for occasional missteps or issues with your company before becoming a detractor. 

Stated preference

Remember that, as with any type of self-reported information, customers may not always tell the truth. This isn’t always because they’re intentionally lying, but customers may not fill out the survey immediately after their experience and memories fade unless they’re momentous.

For example, a customer may have had a pleasant experience purchasing a product, only for it to be delivered two weeks late. The customer gives the brand a negative review and becomes a detractor because what stood out was the annoyance of shipping, even if the delay was out of your control. 

Revealed preference

Revealed preferences are found by monitoring customer activity and engagement with your brand. One negative review might not mean that your customer never tries to interact with your brand again, or they may have varied experiences with your products and services. 

By measuring KPIs, it’s possible to find revealed preferences without directly asking. 

Improving Customer Loyalty

Once you’ve begun employing KPIs to measure customer loyalty, you’ll want to start enacting strategies to capitalize on the information to improve customer loyalty. 

Some KPIs offer more specific suggestions than others, like when customers leave lengthy reviews, but in many cases, your company simply knows that they want to do better. So, what should you do?

Build an Exceptional Product

The best way to capture new customers and encourage old ones to return is to have an exceptional product or service. 

Exceed Expectations

It’s always nice when things turn out better than expected. Understanding and then exceeding customer expectations is a fantastic way to improve customer loyalty. Depending on your target audience and your product or service, customers will have wildly different expectations. 

For example, shopping at a discount store will begin with much lower expectations than shopping at a niche, high-end retail boutique.

If your customers have no reason to expect better customer service, give it to them. If they’re shopping for a generic product, make yours have fun or innovative packaging. Run promotions by donating a portion of your proceeds to charities that your customers support. 

Effective Communication

Many customers find their opinion of a company comes down to whether or not they feel that the company listens to them. This doesn’t just mean having plenty of ways to contact customer service representatives (although that’s important too). It means tracking the market trends and getting to know your customer base on a personal level. 

Reward Loyal Customers

One of the best ways to keep customers coming back for more is to add incentives. Many stores offer promotional discounts that are only available to customers with rewards cards or special offers for credit cards. 

There are plenty of ways to reward loyal customers. It’s an effective way to give benefits for repeatedly buying from your company.

Analyze and Use Metrics to Improve Business

Every company starts with the intention of sharing something with the world. Whoever your intended audience may be, your company’s goal is to design a product or service that people want to buy. With the right metrics available, you’ll learn a lot about the people who keep your company in business. 


With a better understanding of your customers and the right metrics to continuously measure them, your company will quickly be on its way to building a loyal customer base. With them on your side, it’s time to grow and expand without worry.


NPS The Importance of Customer Loyalty May 11, 2020 |

Repurchase rate — the most overlooked eCommerce KPI | by Matteo Sutto

Top 6 Metrics to Measure Customer Loyalty | Capillary

Growth Metrics: Know What to Track





Evaluating the data you collect with specialized tools is all a part of growth analytics. Businesses can grow in various ways through their revenue, customer base, and conversion rate. It’s essential to understand the information coming in about your users and your company as a whole to measure your own success. 

Join us for an exploration of various growth metrics and how to analyze your company’s progress with them.

What Are Growth Metrics?

Growth metrics are the key measurements of your business. Like other metrics, they’re made of objective numerical data, but growth metrics are specifically used in analytics to monitor your business’ growth over time. They’re used to calculate growth KPIs which look at how your company measures up to your business goals.

Your company’s growth in the past should help you make realistic predictions about future growth and give you an idea of what looks healthy for you. 

Why Are Growth Metrics Important?

Consistently measuring your company’s growth is an excellent way to prevent any hiccups with your bottom line. Knowing that you’re bringing in profit is fine, but predicting trends in your customer base by monitoring client behavior will help you stay ahead of your competitors. Analyzing growth metrics allows you to understand better what the future holds for your company. 

With the information you collect, your teams can make data-driven decisions to improve the quality of your offerings, market to the right audiences, increase customer satisfaction, and increase customer retention. 

Track Revenue Growth

Monitoring revenue increases or decreases for specific products and services allows you to see which areas of your business bring in the most money. If a product or service costs more than you see in returns, you can change or eliminate it and focus on the areas that positively impact your bottom line. 

Know Which Channels Have Growth Potential

Not only do growth metrics shed light on successful products and services, but they also highlight where and to whom you should be advertising. There’s nothing better for a growing business than to learn that they have a largely untapped market. 

By monitoring your customers’ details with tools like Kissmetrics’ person profiles, you can draw insights about their demographics and form new marketing strategies to continue your company’s growth.

Find Weak Links

Finding areas of your business that stop growth is just as important as exploring the places where growth can flourish. If you notice that you’re getting poor reviews noting that your staff can’t keep up with service requests for your products, that’s an indication that your customer service department is hindering your growth.

They may be the reason you don’t have more returning customers or why you aren’t attracting as many new customers as you’d hoped. This provides an actionable goal: hire more team members and thus reduce the weak link. 

Determine Your Business’s Health

A growing business is a healthy business. Growth metrics help you analyze whether or not your business is growing and by how much over a specified timeframe. If your company is growing at a slower rate than your competitors, that’s likely a sign that you need to be doing something differently. 

Stagnant or declining businesses are usually a sign that trouble is just around the corner, so you must stay on top of growth metrics to learn about problems as soon as they arise. 

Measure ROI

Growth metrics measure ROI and can differentiate between campaigns. Kissmetrics offers the ability to track campaigns by issuing multiple URLs for social media posts and drip email campaigns. By measuring your ROI, you can see which avenues lead to company growth so that you can pursue them and not waste your time in other marketing efforts. 

How Do I Know Which Growth Metrics to Track?

Determining the right growth metrics depends on your industry and business model. For example, e-commerce companies and SaaS companies will likely track somewhat different metrics. The number of subscriptions is a metric that only applies to businesses with a subscription model. 

The best growth metrics are the ones that contribute clear and relevant information that pertains to your business goals. Once you have created your KPIs and know how you measure your business’s success, you’ll be able to find the metrics that give you the information you need. 

What Are the Most Important Metrics for Product Performance?

Your growth analytics, or growth KPIs, depend on your business goals and what you want to achieve. Choosing those KPIs may not look the same for every company, but everyone should be watching a few essential KPIs. 

Sales Revenue

Sales revenue may be the most basic metric of all, but undoubtedly one of the most important. Your sales revenue ought to increase with each successive year. However, many external factors can affect your revenue. 

If your sales revenue isn’t growing according to your expectations, then you may need to realign the company with your business goals. Tracking your revenue from year to year can help you create realistic goals for the future or see if there is a serious problem within your business that needs assistance. 

Customer Acquisition Costs

Customer acquisition costs measure how much you need to spend on a single new customer to get them to convert to your brand. Knowing how much it costs to generate a lead is essential when calculating profits or customer lifetime value. Once you know how much a lead costs, you’ll need to factor in the conversion rate.

After all, you’ll likely need multiple leads to generate a single new customer. That customer may increase your revenue, but they’ll need to improve it enough to outweigh what you paid to attract them in the first place. 

Customer Churn

Customer churn shows the percentage of clients who stop doing business with you. This may be unsubscribing to your service or not purchasing any more of your products. Though customer churn can happen for various reasons, a high churn rate often indicates that something is wrong with your products or services.

Customer Engagement

Understanding how your customers use your products or services is crucial when determining which features you should focus on for future releases. Suppose customers all want to use one specific feature on your website. In that case, that is a signal that your company should explore potential growth within that feature by expanding its scope or improving its performance. 

Similarly, measuring the number of active users is an essential growth metric. Ideally, your number of active users should increase as your brand awareness grows, so if it stays steady, that’s a sign that something isn’t working properly.

Customer Retention

Customer acquisition costs are often decreased as companies perfect their marketing techniques, but they’re still expensive. Retaining existing customers is always cheaper than attracting new ones. 

Measuring the percentage of your customers who come back for more can provide valuable insight into customer satisfaction with your products or services. Customers with positive interactions with your products are more likely to buy future releases or updates. 


Upselling customers is one of the best ways to improve your sales revenue and reduce customer acquisition costs. When each customer, on average, is spending more on your products or services, you can keep a more significant cut of your revenue. 

Incentivizing your clients to purchase additional products through a bundle or promotional offer or persuading customers to buy a more expensive version of their desired service is something every sales team member should aim for. 

How Do I Track Growth Metrics?

Kissmetrics allows you to track important metrics for your business and generate meaningful reports from the collected data. Our reports are full of insights into how your company is growing and what is stopping you from reaching your goals. 

Before you can get to the insightful reporting, however, there are a few steps you must take:

  • Designate which aspects of your company you want to monitor – when you know what type of information you need, you’ll have a better idea about which metrics to track.
  • Decide on how often you want to report on your metrics.
  • Choose appropriate parameters for data gathering.
  • Set up your analytics software and get tracking.


A solid understanding of growth metrics is necessary to monitor how your business is doing both now and in the future. It mighty not be as good as a crystal ball, but if you know where you have the potential for growth and what to expect in your growing company, you’ll be able to evaluate the success of your strategies and begin new initiatives with confidence. 

Learn more about growth metrics with Kissmetrics’ comprehensive reporting tools. 



  1. The 7 SaaS Growth Metrics That Really Matter |
  2. Growth Metrics Definition |
  3. Business Performance Metrics Tracking Growth |

What is Product Analytics? Definition & Overview




As a member of the product team, a considerable weight lies on your shoulders. Your task is to develop what your company is selling, marketing, and relying on to give them a competitive advantage and generate revenue. 

If that wasn’t stressful enough, you’re also responsible for driving adoption and usage, and customer interviews are only as good as the questions asked. 

Making the right decisions on what to build and how to build it requires the right data. With the correct data at your fingertips, you can make smarter decisions, influence stakeholders, and enhance your team’s credibility within the company. 

What is Product Analytics, and Why Is It Important?

The term product analytics refers to capturing and analyzing quantitative data through embedded tools that record how customers interact with a product. 

Product analytics is vital for many reasons. As you know better than anyone, creating a product is a complex process — hundreds of decisions go into building it, and sometimes it can be difficult to tell if what you’re doing is leading you to the result you want.

Product analytics helps you:

  • Gain a deeper understanding of your customers.
  • Gain insights that are difficult to get from qualitative data, such as surveys, customer feedback, etc.
  • Set goals when adding new features. 
  • Gauge your customer experience.

While thousands of successful products were developed over the years with intuition and experience, today, data science and analytics provide us a more innovative and accurate path to decision-making. 

You can get timely information on how well you’re meeting user needs. You can measure individual features’ success and base product decisions on metrics that support your larger business goals. When used correctly, analytics can transform your ability to develop ideas and design great user experiences.

Data Points and Insight You Can Pull From Product Analytics

Product analytics allows you to address crucial questions like:

  • Who is using your product?
  • How much usage do certain product features get?
  • Which of your marketing efforts are driving the best users?
  • How are customers using the product?
  • What are the characteristics of your most engaged customers?
  • Where are your users getting stuck in your onboarding funnel?
  • How do you diagnose issues, reduce churn and personalize interaction for users?

Product analytics shows businesses what their users do — not just what they say they do. These are known as revealed behaviors, and they are highly telling. Customers aren’t very adept at predicting or assessing their behavior (consider any given New Year’s Resolution). Having analytics allows product teams to dive deeper than human-error-prone surveys and questionable user interviews. High-quality data and insights lead to more profitable decisions — plain and simple. 

How To Use Product Analytics To Develop Sales and Marketing Strategies

Data can help inform the strategies employed by every team and get everyone pulling in the same direction. Because there are facts (i.e. data points) that tell you which direction that should be. But the data is only as valuable as the insight drawn from it. So training your sales and marketing teams on how to use the product analytics tool so they can read the data it produces will help drive synchronicity within the company. It will also reduce their dependence on the engineering and product teams.

Product analytics platforms perform two core functions that help companies to answer essential questions about their users:

  • Tracking data: Capturing events, actions, and visits
  • Analyzing data: Visualizing data through reports and dashboards

Here are some examples of how product analytics helps align sales and marketing strategies with product objectives: 

  • Acquisition: Product analytics can tell you where your customer comes from — which channels they use primarily, which users are the best prospects, and the optimal costs for acquiring each user.
  • Activation: Each experience a user has with your product on the journey to becoming a paying customer is known as a micro-conversion. The point at which users fully connect with your offering and realize its value is called the moment they decide to purchase. Product analytics can help you optimize these steps.
  • Retention: This is perhaps the most crucial metric to understand: are customers staying or leaving? On a basic level, product analytics answers this question. But it also tells you the behaviors indicative of a user staying. Which features do they use? How long did it take them to realize the value of your product? Product analytics will show you your stickiest features as well as which cause users issues. So you can prioritize what to build and fix.
  • Referral: The only thing better than a satisfied customer is a whole bunch of them. Product analytics enables you to create a tracking plan to measure your customer loyalty through their actions.
  • Revenue: Ultimately, it’s all about how you make money with your product. Product analytics can tell you who your most valuable customers are, the features they use and the products they bu. It will also tell you at a very basic level, how much money you’re making.

The more data teams get back from product analytics, the better the product iterations will be and the more aligned the marketing campaigns and sales efforts will be to those product iterations. 

Most Common Analytics Reports and How They Can Help

A product analytics platform works by tracking the actions users take within your product:logins, features used, engagement, and other activities involved in navigating a digital product. 

Here are some of the most common analytics reports that will help you analyze your data:

Cohort Analysis

A Cohort Analysis allows you to segment your customers into groups (i.e. cohorts) based on demographic information, acquisition channel, job title, industry, or any other way you want to group your customers. This report will tell how well each of these cohorts does within your product and can help sales and marketing teams assess their target audiences. 

Behavioral Segmentation

Behavioral Segmentation is another standard analytics report that offers much greater refinement than demographic segmentation by letting you sort your users according to the actions they take within your product. You not only see who your very best customers are — you know what they do. You also see the actions taken by power users and your customers who churne

This report helps inform the product team on what they should build and fix, and to prioritize that never-ending list.

Event-Based Sequences

Event-Based Sequences provides you with endless flexibility in taking advantage of all the data you have gathered through auto-capture. Different teams can assign multiple labels to the same auto-captured interactions — even retroactively — without modifying that specific data. 

These labels allow you to put events into context to answer questions and prove or disprove multiple hypotheses without going back to the source and rewriting the code. Simply put, your dataset stays clean yet accessible. 

How Kissmetrics Helps Behavioral Product Analysis

Kissmetrics is a person-based analytics tool that will help you to identify, understand, and improve the metrics that drive your SaaS product. We make it simple to get the information you need to make better product decisions. 

Other analytic platforms emphasize page views or isolated events, meaning they will tell you how many times a page was accessed or how many times a specific event was performed. But that does not connect the activity to your users or how they use your product.

The Bottom Line

Product analytics expose the raw reality of how customers use a product — or even a particular feature. Tapping into these metrics could be the key to your product’s growth and, ultimately, a happier customer.



E-commerce Market Share, Growth & Trends Report, 2020-2027.

What Is Intuition, And How Do We Use It?

Why we make (and break) New Year’s resolutions, and 4 tips to help you achieve your goals | Norwalk.

What is a Good Bounce Rate For Your Website?




Understanding how bounce rate works and what you should aim for on your website can be challenging. There are several factors that can affect your bounce rate, such as where the visitor is coming from, the type of page they land on, and your website’s goal. 

In this article, we delve into what a bounce rate is, why it matters, and how to improve yours. 

What is Bounce Rate and Why Does It Matter?

A bounce rate refers to the percentage of visitors who visit a single page of your website before navigating away. These visitors do not visit any other pages on your website and typically don’t interact with anything on the page. 

Essentially, your bounce rate measures how many people take one look at your content and exit.

What is a Good Bounce Rate?

Depending on your industry and what you offer on your website, your ideal bounce rate may vary. For example, if your website is informational, you can expect a higher bounce rate since people will visit, find the information they were looking for, and leave. This is typically true for websites geared towards students or research.

The type of page also impacts bounce rate. Product description pages and home pages tend to have a lower bounce rate than blog entries or informational pages. 

What is the Average Bounce Rate?

The average bounce rate is between 26-70%, depending on the industry and purpose of the website. Given the wide range, you’ll want to look up the average bounce rate for your industry and site type to get a read on how your site is doing..

How To Check Your Bounce Rate 

Some analytics tools offer the ability to monitor your bounce rate, although Kissmetrics does not. Typically, you would find the bounce rate as a metric available to track and could click on the report to see your bounce rate through a specified timeframe.

We don’t offer tools like bounce rate monitoring because our funnel report provides more actionable information about who is flowing through your sales funnel and how many steps they get through before exiting your website. The funnel report gives you inverse information from a bounce rate by showing the number of people who complete a sequence of designated events. 

Why is Your Bounce Rate High? 

There are plenty of reasons why your bounce rate might be higher than the average. However, before you start panicking at an exceptionally high bounce rate, you should consider if any of the following apply to your website:

  • Traffic from social media platforms – if you place ads on social media platforms, plenty of casual browsers might click on your ad only to find that they weren’t particularly interested in your product, and they bounce away.
  • Publishing informational blog entries – if you’ve written great content, people might be looking for your blog. While that’s great, those people likely just want to consume that one blog’s content and have no interest in exploring the rest of your website.
  • People are browsing on their phones – regardless of your website’s formatting, people just have a shorter attention span when browsing the internet on their phones. This could be because they’re browsing in public or at work and need to be able to quickly see everything and then finish what they’re doing. Whatever the reason, bounce rates are often higher for mobile viewers. 

How to Analyze and Report Bounce Rates 

While some analytics tools automatically report bounce rates, they are considered a vanity metric and don’t usually provide valuable insight as to why your visitors are bouncing. Therefore, it is difficult to analyze bounce rates and draw any conclusions about what to improve. 

  • Are visitors leaving because they aren’t impressed with your website? 
  • Have they found the necessary information and are ready to move on? 
  • Is your website useful in their search? 
  • Do they feel that your advertisement misinformed them about your products and they don’t want to buy them? 
  • Does your product fail to resolve their issue for them?

None of these questions can be answered based solely on your bounce rate. Instead, you can monitor bounce rates through more useful reports that show how people interact with your website. 

How to Improve Bounce Rate 

Your website may have a high bounce rate for many reasons, some of which have nothing to do with your content or your product. However, we’ve compiled some of the aspects that you have control over within your website and what you can do to entice visitors to take off their coats and stay awhile. 

Improve Your Page Load Time

A slow load is one of the most common causes of a high bounce rate and low time on page. People expect pages to load in under a second, and the longer they wait for your content to load, the more likely they are to navigate away without ever seeing it. While some users can try refreshing the page, you can’t expect everybody to have high-speed internet, so you’ll have to build your pages for the lowest common denominator.

Limit the use of complicated graphics, fonts, or formatting on your website to reduce load time. Moving photos, embedded videos, automatically triggered music, and other fancy items will also slow down the loading of your pages. A clean, streamlined appearance never hurts, particularly if it makes the difference between people remaining to see what your website looks like and leaving in dissatisfaction.

Improve Your Page Design

We’ve all seen web pages with large amounts of pictures, fancy fonts, and blaring colors. They’re entirely distracting and often serve no purpose other than to distract viewers. However, if your visitors can’t immediately determine whether this website will meet their needs, they’re highly likely to just exit from it immediately.

Your website doesn’t need to be spartan, but it must have clearly defined links to your home page, product description pages, and other ways of navigating. Many websites with lots of pages employ a search bar in the upper right-hand corner.

Check Bounce Rate vs. Time On Site

Time on site, also known as session time, refers to the total amount of time a single visitor spends on your website. This encompasses any time they spend on any of your pages, from the time that they land on your first page to when they leave. Time on site alone only provides a vague picture of what’s going on – what if someone visits and leaves the tab open in the background? 

On the other hand, bounce rate measures the percentage of new visitors who see a single web page and navigate away or close the tab. 

Keyword Relevance

You might have the best content in the world, but it won’t matter if the right people can’t find it. Writing an in-depth article about when to use a skin care cream won’t be of any use to people looking for information about suntan lotion. If you don’t use relevant keywords, your article may come up for people who aren’t looking for skin care cream or not come up when people search variations on the terms. 

Optimize for Mobile

Nowadays, many people do their web surfing from their phones. If your website has lots of dense paragraphs, it can look like an unappealing wall of text on mobile. Instead, try to use as many bullet points, pictures, or breaks in paragraphs as possible. Keep each section to four lines maximum to facilitate readability.

Make Navigation Easy

Navigation via internal links is critical and shouldn’t be underestimated. It’s easy to forget to link to that product your blog just mentioned or link to a page with detailed instructions on installing your application. Still, without those links, your visitors won’t be able to continue down your conversion funnel. 

Keep Important Elements Above the Fold

For visitors on laptops, you want all of the crucial elements of a page to be located near the top or middle, anywhere that is above the fold of the laptop, aka where they have to scroll down. You should never forget that visitors can quickly leave the page. There are thousands of search results that likely deliver similar products or information, so you need to capture and keep their attention from the get-go.


Bounce rate is one of the vanity metrics that some product analytics tools will provide, although Kissmetrics does not. It depicts the percentage of visitors who only see one of your website’s pages before exiting the session. However, since the bounce rate rarely provides actionable information, we offer other metrics like path reports and funnel reports, so you can see what your customers are doing online before leaving.

Keep your bounce rate down by leveraging Kissmetrics’ tools today. 



13 Reasons Your Website Can Have a High Bounce Rate | Search Engine Journal

What Is Bounce Rate and What Is a Good Rate? | SEMRush

High Bounce Rate? Here are the Reasons & What You Should Do | Crazy Egg

What is Source Tracking and Why is it Important?





Sadly, asking your users, “How did you find my business?” won’t get the answers you need. For the majority of companies, you never end up speaking with visitors and users, and even if you did, the chances are high that they would say, “Uh, I don’t know. Maybe Google?” 

Some websites have surveys for visitors to ask how they found them, but the surveys are often optional and rarely provide coherent information.

So, how can you discover which avenues of marketing are working? In this post, we break it all down by addressing how source tracking works, what it is, and how it can benefit your company. 

What is Source Tracking?

As the name implies, source tracking is a way to plot the course that led your website’s users to your landing page. Did they find one of your articles in a Google search? Did they see your ad on Twitter and click-through? Were they dormant users who signed up for the email list and were suddenly tempted by your irresistible discount offer in an email campaign?

What’s the Difference Between Source Tracking and Visitor Tracking?

Keep in mind; source tracking is solely focused on how a visitor gets to your website. Once they have arrived, any further monitoring of their interactions and behavior falls under the visitor tracking category.

Visitor tracking is more comprehensive than source tracking. While source tracking only looks at where your visitors are coming from, i.e., the source that brought them to your website’s landing  or home page, visitor tracking follows their journey through your website. 

Full-fledged visitor tracking might note which other pages visitors navigate to after leaving your landing page, how long they spend on each page, if they eventually commit to a purchase, and provide other insights on individual users throughout their session.

What are the Types of Source Tracking?

There are two main types of source tracking: onsite and offsite. As we explain below, you’ll likely be primarily concerned with offsite tracking when you want to monitor ad campaigns and other marketing strategies. 

However, onsite source tracking can provide valuable insight into your content creation and your calls to action on each page. There is also a third type of source tracking, so we’ll talk a bit about that, as well. 


Onsite sources are internal links that visitors can click. For example, these sources might send the visitor from an article to another blog entry about related content or mention a specific product and include a link leading directly to that product’s description page. 

Understanding which pages funnel visitors to priority pages, like registering for an account with the website or purchasing items, is fundamental to building a website that is easy to navigate and provides users with what they’re looking for. 

Onsite source tracking may also fall into the category of visitor tracking, as we note in the section above, since you are following the visitor from one page to another while remaining on your website. 

Off Site

Off-site source tracking is your central funnel of information. This measures how people are getting to your website in the first place. Once they start doing other things and clicking through various pages within the website, off-site source tracking no longer applies. 

However, when it comes to A/B testing two different email campaigns, this is the type of source tracking you’ll utilize. 


Outbound tracking is something of a mystery to many companies. So why would you want to track the pages that cause people to leave your website? The answer is surprisingly simple: the key to enticing visitors to stay is in those particular pages. 

When potential users leave your website, they have decided that your website no longer adds value to their current session. This might be a result of something more interesting catching their attention, your page not answering their questions, or feelings of frustration at a complex UI/UX.

Whatever the reason, tracking the pages that people see just before they navigate away from your website provides valuable information about the type of content that may need to change. 

Why is Source Tracking Important?

Simply put, you need to know what works and what doesn’t. Email campaigns, for example, cost time and money to put together successfully. If you track the link provided in the email and see that it is generating very few visits over a given period, you’ll probably conclude that your user base is not responding well to your campaign. From there, you and your marketing team can strategize different ways to reach users.

Is the email going into the spam folder? Is the wording not appealing to your audience? Should you be offering a better promotion to entice website visitors? Or is email not the right format for your users at all? These kinds of essential questions can only be raised and answered if you’re tracking where website visitors come from. 

When you pair source tracking with A/B testing, you can see precisely what type of message works in each medium and what doesn’t draw as much attention, so you can spend your money wisely. 

How Does Source Tracking Work?

Source tracking works relatively simply. By using a specialized code snippet added to the end of a URL, your company can generate parameters for tracking those URLs. Though they will all take the visitor to the same landing page, the URLs will vary depending on the parameters that you set in the tool.

Standard parameters include your source, your medium, the content, and the name of your campaign. This makes it easy to compare email campaigns versus Facebook ads and multiple campaigns in the same medium by using an A/B test report

Later, you can search the URLs used during a given timeframe and see which of your campaigns successfully attract visitors to the website and which ones you need to take a second look at before continuing. 

How Do You Set Up Source Tracking?

To set up source tracking, you’ll need to generate your URLs for various types of marketing. This may mean generating distinctive URLs for multiple email campaigns, Facebook ads, Twitter ads, or any other form of communication between you and the potential visitor.

Once these URLs have been generated, Kissmetrics will record which of them are used by visitors to your landing page. Keep in mind that the visitor will not see any of this behind-the-scenes tracking despite the distinctive URLs. Instead, they’ll be provided with a link or button click through to the same landing page.

All of your visitors will see the same thing; however, you’ll see how people arrive on your landing page in the reports. That data will be compiled in your analytics tool to analyze and incorporate into your decisions about which marketing campaigns to use and the right platforms to reach your audience. 

How Do I Use Source Tracking Information in My Business?

Source tracking provides valuable information about which types of sources provide the most return on investment for your company. This type of information can shape your marketing strategies, budgeting, content creation, internal marketing, and customer journey. It can even affect product decisions.

Both off-site and onsite tracking provides data about the calls-to-action and the type of content that your viewers want to see. All of that data can add up to a more extensive user profile and help you create a viable sales funnel for visitors, whatever stage of the buyer’s journey they’re in. 

Source tracking can also be beneficial if you want to advertise for business partners and affiliates by creating links on your website that lead to your partners. You can monitor those outbound links to see how effectively you marketed your partners and how many of your users reached out to your affiliates based on your recommendation. 


By tracking where your visitors come from, whether your landing page provoked them into visiting other areas of your website, and then knowing where they ended their sessions, you can get a complete picture of your visitors’ experiences and interactions with your company. Then, when you understand what the user is seeing, you can tailor it for their needs and desires. 

Visit our website to learn more about how Kissmetrics can help you collect and make the most of your user data.



Source Tracking vs. Visitor Tracking: What’s the Difference? |

Track External Link Clicks on Your Website |

How URL Tracking Works and Why It’s Important |

What Is Marketing Analytics? Definition and Examples





Marketing in the digital age is moving quickly. Companies from all industries are taking advantage of this boom by leveraging on what is perhaps the most precious resource of modern commerce—data. 

Marketing analytics is the way companies use this data to their advantage.

What Is the Definition of Marketing Analytics?

Marketing analytics is when data is collected from marketing platforms to create complex models to visualize and understand user behavior. Businesses that use marketing analytics can ensure the money they allocate for advertising gets the highest return on investment (ROI) and that all of their marketing efforts remain lean. 

How Is Marketing Analytics Different from Digital Marketing?

Digital marketing is the overall process of using digital platforms to advertise a product, service, or company. Digital marketers use marketing analytics to make digital marketing efforts more efficient and more profitable.

Why Is Marketing Analytics Important?

Executives from the biggest companies in the world all agree that data is fueling the future of marketing. With proper insight and implementation of marketing analytics, you no longer have to rely on expensive trial and error with your advertising campaigns because the data you retrieve will help you continuously optimize your campaigns for higher returns. 

That means lower marketing costs, more valuable customers and more feasible and effective growth and scaling plans. 

What Are the Benefits of Marketing Analytics?

For a more concrete idea of how powerful marketing analytics is, here are a few of the benefits of implementing marketing analysis into an organization’s promotional strategy. 

Get to Know Your Audience

With marketing analytics, you can target the audience to which you intend to advertise through a process called behavioral segmentation

This means that you will understand what your customer’s purchase patterns are, what products they are most likely to buy, and what types of ads they click on the most. This is beneficial to your business. 

Not only will you be able to personalize your company’s advertising campaigns to suit specific target audiences, but you can use this information to improve your efforts continuously.

Identify Trends

You can use marketing analytics to identify various trends within your industry, especially in e-commerce. The volume of consumers who have taken your shopping efforts online has grown exponentially so the scope of e-commerce is continuously shifting. But there are clear patterns that unveil themselves by analyzing your marketing data. 

For example, one trend that can be identified is whether buyers tend to go to specialized websites during the holidays or more prominent and more general platforms like Amazon or eBay. 

Forecast Future Results

By looking at the marketing analytics patterns of previous marketing campaigns, you can more easily predict the outcomes of your future marketing campaigns. 

Measure KPIs

Marketing analytics is a way to determine whether or not a company achieves its Key Performance Indicators (KPIs).

When you run marketing campaigns, for example, one of the things you pay attention to is your conversion rate. A conversion rate is a desired action taken by the customer or user that is influenced by marketing efforts. 

With marketing analytics, you can tell if your marketing efforts are working because the associated conversion rate will either rise or fall compared to the previous month.

Optimize Campaigns

One word that can be used to describe the goals of marketing analytics would be ‘refinement.’ In the past, companies relied on more traditional methods to make sure their marketing efforts were working. 

Now, you do not need to resort to those methods as frequently because you have a wealth of data to use to optimize your campaigns daily.

How Can I Make Sure My Marketing Analytics Effort Is a Success?

As powerful as marketing analytics are, a company needs to actively make sure that its processes are well-defined and it uses best practices to make sure its analytics are effective. Here are some of those best practices.

Use Multiple Processes 

You should rely on multiple processes like conversion rate optimization and product positioning

Product positioning  is what consumers think about a particular brand. By using the data obtained through marketing analytics, you can make sure that your consumers know the value of your products and what makes your products stand out from your competitors. 

Product positioning  is the best way to highlight a unique selling point. 

Optimize Workflows

You can use marketing analytics not only to optimize advertising campaigns but to optimize workflows as well. This means that your company’s efforts will be a lot leaner, and your company will have more apparent objectives and a more well-defined process to achieve these objectives. 

An example of this is social media content creation. With marketing analytics, companies can eliminate the guesswork of which pieces of content are valued by their target audience, which ones get the most engagement, and which draw the most traffic to the company’s landing pages. 

You can then focus your efforts on the pieces of content most likely to be successful as well as creating more content that your audience loves.

Make Changes Based on Your Findings

You should use the information you obtain to create better success and to mitigate future failures. 

An example of this would be an e-commerce fashion brand adjusting to the information obtained for a particular clothing color during winter. 

After analyzing their data, the retailer found that specific colors were not popular among its buyers. Based on this information, it didn’t include this clothing color in  the following winter line to prevent low conversions.

Predict Customer Lifetime Value

Another important metric that a company should obtain about its customers is something called Customer Lifetime Value. Customer Lifetime Value is the amount of money that a specific customer will likely spend at their business over their entire relationship. 

Predicting Customer Lifetime Value can provide you with an indication of how your efforts influence your relationship with your customers. With marketing analytics, you’ll receive a clearer picture of your Customer Lifetime Values and get better ideas on improving these values. 

A very powerful aspect of Marketing Analytics is that you have the tools to predict how specific metrics will fare for the next few weeks and well into the future.


Data is now one of the most influential factors in marketing. 

Marketing analytics is a way of measuring your company’s marketing efforts. Greater insight leads to better profits and a more robust brand image. The information is readily available—marketing analytics is simply a way to give this information structure to visualize what needs to be done and take the appropriate action.

If you represent your organization and want to know how you can look deeper into your marketing analytics — Kissmetrics is a great way to start.



A Guide to Marketing Analytics. Marketing teams must rely on analytics | by Abizer Jafferjee (Waterfront Analytics) | Jul, 2020

The Need for Marketing Analysis. Exactly how analytics can transform… | by Muhannad Haj Ali | The Startup

How Data Is Fueling The Future Of Marketing | Forbes

Which Product Metrics & KPIs Matter?




Product metrics and KPIs are great tools for companies to track success in the key areas that matter to their business. There are many different examples of KPIs and product metrics and, when used properly, they can provide great insight into your company’s health. 

What is a Product Metric?

A product metric is a measurable data point on the performance of a product. It should be quantifiable, meaning it can be measured as a numerical value or quantity, and it should capture how a user interacts with a product. Once analyzed, product metrics will tell you how beneficial those interactions were to the user and the company. Various teams in your company can use a good product metric to gain more insight into what’s successful about your product and what isn’t. 

What is a Key Performance Indicator (KPI)?

A key performance indicator, or KPI, is a progress measurement towards a goal or achievement. A KPI should be quantifiable and should have a clear endpoint that can be reached. 

By tracking objectives over time, a KPI can give you a good indication of your progress and how close you are to completing a goal.  A key performance indicator can be created for a specific product, department, or individual employee. 

Unlike product metrics, KPIs are not limited to products alone, as they are applied as a measure of progress in achieving a specific target. 

Are KPIs and Performance Metrics the Same Thing?

KPIs and performance metrics are similar in that they are quantitative and should show measured value over time. Both performance metrics and KPIs should give you a clear picture of progress in meeting the goals your organization has set. But while KPIs and performance metrics share some similarities, there are key differences between the two measures. 

KPIs measure the progress towards a goal or a checkpoint, a performance metric simply measures the performance of a metric over a period of time. Therefore, a performance metric could be considered part of a KPI, but a KPI would not be part of a performance metric. A good KPI could have multiple performance metrics to give you a more in-depth look at your progress towards the end goal. 

What are the Most Important KPIs and Product Metrics?

There are countless KPIs and product metrics that your company can collect, but which should you monitor? Some of the most important KPIs and product metrics are:

  • KPIs
    • Monthly recurring revenue (MRR)
    • Customer lifetime value (CLV)
    • Customer acquisition cost (CAC)
  • Metrics
    • Session duration
    • Bounce rate
    • Retention rate
    • Churn rate

Monthly Recurring Revenue

Monthly Recurring Revenue (MRR) is an important KPI, especially for businesses that rely heavily on subscription-based services. For example, when businesses want to measure reliable income that will come in on a regular schedule, they measure MRR. Consistency is key for this KPI because it measures a recurring expected income, not a one-time purchase. 

MRR allows for easier planning around future income. 

Customer Lifetime Value

When tracking the value a user brings to a company over the entire relationship of the user and business, that is considered Customer Lifetime Value (CLV)

Like MRR, CLV is measured over time. This KPI is important for companies looking to develop strategies to retain users and create increased loyalty to the company. 

Customer lifetime value is a crucial KPI for companies to improve relationships with their users. Understanding the potential loss a company could suffer by losing users prematurally to competitors makes it easier to justify investing resources in keeping users loyal to your company. 

Customer Acquisition Cost

Customer acquisition cost (CAC) calculates how much it costs you to convince a user to buy your product or service. CAC focuses on analyzing costs associated with marketing, advertising, and other tools used to bring users to your company to purchase your goods or services. 

While this is a fairly simple calculation, the CAC is important to calculate the true profit each user can bring your company. 

This is a key KPI for budgeting advertising campaigns and measuring how effective strategies are at attracting new users to your company. In addition, the CAC is a great KPI to compare against CLV. These KPIs can paint a clear picture of the actual profit that users bring to your company. 

Session Duration

Refer to the session duration metric if you’re interested in tracking how much time users spend interacting with your website. The session duration metric is a measurement of how long users actively engage with your website before a timeout. 

Once there is no activity from a user for a set length of time, the session will then timeout, and the measurement will stop. An important key to the session duration metric is that it records the time spent on your website, not just a single webpage. Therefore, going back and forth between web pages will all be totaled in the session duration metric. 

This is a useful metric for understanding how users interact with your website and if they are really spending the appropriate amount of time navigating your pages. 

Bounce Rate

Another simple metric that companies often track is bounce rate. For example, if someone were to visit only one page of your website and then leave without completing an event or navigating to another page on your site, that would be considered a bounce. 

What the bounce rate really tracks is how many people navigate to your website and then immediately leave. However, what bounce rate does not do is give you information that can help you determine why a user left. 

Depending on your website design, bounce rate may not be a bad thing. A single page site design, like some blogs or articles, may have a high bounce rate and still be successful. 

On the other hand, many ecommerce sites have a checkout process that goes through different pages so it would be difficult for them to be successful with a high bounce rate. . Bounce rate can be a helpful metric to track, but you’ll want to make sure you’re using this metric with other, more illustrative metrics to get a clear picture of what’s going on on your site and what you can do about it.

Retention Rate

Your user retention rate is a handy metric for understanding how you’re performing against the competition. A retention rate is how many of your users return to your business over a certain period of time. 

The parameters for retention rate vary based on your type of business and how you get users. If your business requires repeat user visits to create a good profit, then retention would need to be high. The time span over which you would want to measure retention would also vary based on the type of business and how users shop for your goods or services. 

Churn Rate

This metric is useful for subscription based products that rely on maintaining or growing their MRR. Churn rate is defined as the percentage of users that leave your business over a period of time. 

If you have a high churn rate, you have to attract a lot more new customers to maintain the same MRR. Which is costly and means it could be difficult to maintain profits. Measuring your churn rate and comparing it against new users is the best way to get a clear sense of your company’s growth. 

How Do I Know Which KPIs and Product Metrics to Measure?

Knowing which metrics and KPIs to track depends on your business type and your situation. If you have a subscription based product, MRR, churn and retention rates will be important. If your business is new, growing, and looking to track growth-related metrics and KPIs, tracking user acquisition cost could be helpful. If you have an ecommerce company you’ll want to track CLV. 

The important thing to keep in mind is that the best metrics and KPIs for your business provide the most useful information you need to help your organization maintain growth. 

How Do I Measure KPIs and Product Metrics?

To measure your KPIs and product metrics, you’ll need a behavioral analytics tool like Kissmetrics. You simply install the code in your product or on your site, choose the events (i.e. user actions or metrics) you want to track and then check in at regularly scheduled intervals to run your reports.  

How Can I Optimize My Product Performance?

Your product performance is key to your company’s success. The best way to optimize your product performance is to use a behavioral analytics tool like Kissmetrics to track user behavior within your product. Track both your power users and unhealthy accounts to which user actions are indicative of each category. Which features are most popular? Where do users get stuck? What are the most successful customer journeys? 

Use the information you gather to make decisions on what to change, how to change it, and when to change it (i.e. how to prioritize your resources). 


Product metrics and KPIs need to be tailored for your type of business and where you are in the growth process. They offer much needed detail and provide a path to action to help your company succeed. Make sure you choose the important metrics and KPIs and monitor them with the best product analytics tools for your company to help improve your product performance. 



What Does KPI Mean?: An Introduction for New Leaders |

Customer Lifetime Value: What is it and How to Calculate |

Bounce Rate Benchmarks: What’s a Good Bounce Rate, Anyway? |

User Analytics Overview





As the name implies, user analytics is the process of evaluating your user’s actions, so your company can provide services or make products that your customers enjoy. The insights offered by user analytics software can help you do that by showing you features of your product, service, or sales platform work well (i.e. users use them regularly) and which give users problems or go unused altogether. This will help you decide which bugs to fix and what to build next and to prioritize that list. .

Learn how user analytics work, what kinds of information it provides, and what to do with that data once you have it. 

What are User Analytics?

User analytics is the process of collecting and analyzing data on actions users take within a product. Using an analytics tool like Kissmetrics allows you to take this data and create a comprehensive user profile that can be combined with the information the user provides for a holistic view of the people and companies who use your product.

User analytics differ from self-reported surveys because there is no potential for deceit. You’re tracking what they actually do, not what they say they do.

How do You Perform User Analytics?

You start by installing a user analytics tool in your product and choosing the events (i.e. user actions) you want to track. The events you track should answer key questions that indicate your product’s success. 

For example, are they regularly logging in? Which features are they using? Which features seem to cause them problems?

Choose the Right Events for Your Business

In order to gain the insights that will allow you to pull the right levers to grow your business, you have to track events that are indicative of user success (or failure) within your product. If you don’t know what these are, create a hypothesis about which user actions are most important, then test it. You may change the events you track over time as you collect more data and gain greater insight.  

Break it into Sub-events

Once you have defined the events you’re interested in tracking, you need to break them down to understand user motivations and what the user needs to do to get there. 

For example, product managers can employ user analytics to monitor which features their power users seem to gravitate towards, and which features casual users seem to prefer. Inversely, user analytics can help product managers determine which features are not commonly used or understood by their user base; they can even determine which groups of users are the most likely to cancel their subscription or discontinue service.

Watch Users Conducting Events

As the name implies, this step requires your team to observe the process. They will have certain concepts in mind during their observation like:

  • The motivation behind each subevent.
  • Information required by the user to complete the subevent.
  • If the user can tell when they’ve achieved their results.
  • If the user needs specific tools not included on the website or app to complete the task.

Draw an Event Diagram

An event diagram is a flowchart where your team documents the entire user process from beginning to end. This should include all subevents and how the funnel connects and creates the ultimate event. 

Write the Story

The story documents user motivations or the “why”. Writing the story entails the team figuring out what motivated the customer to proceed through each subevent and how those motivations and emotions tie into the ultimate event.

Validate Your Findings

At this point, your team should run their event diagram past others who aren’t familiar with the process. The fresh set of eyes may find some subevents that should be separated and called out or ones that ought to be bundled together. 

Analyze Your Results

This is where the fun starts. Your company has collected in-depth information about an event or process, but sometimes customers don’t behave how you predicted. 

Where in the event did people do something unexpected? What could have caused that deviation?

How do I Evaluate My User Analytics Platform

The best user analytics platforms are the ones that store lots of data points about users to compile a comprehensive profile. However, platforms need to do more than just store data. They need to showcase said data in a way that makes it easy to see who your customers are, their retention rate, how well marketing performed in various places, and the actions taken by users in your product. 

To evaluate your user analytics platform, it is essential to take the following into account. 


Knowing which software is compatible with a proposed user analytics platform is crucial. Transferring data between different programs is time-consuming and costly. Having a platform that will efficiently work with the software your company already has in place, will save you a lot of energy and expense. 


Great user analytics platforms do the work for you and give that time back to your teams for other work. The best types of software make your team more productive by automating certain manual tasks that save your team time and energy. 


Another consideration is the current size of your company now, how many events you want to track, how many users will need access to the tool and your projections for the future. It can be a waste of resources to install a user analytics platform that only works for your current operations but may become obsolete as your business expands. 


Some user analytics tools are made for individuals or small team use instead of larger project teams. So think about who is using the tool and whether or not it’s the right fit.. Individual use software might have more tempting integrations or fancy features, but if it isn’t optimized for team use, it will probably end up being more trouble than it’s worth. 


Ideally, your user analytics platform is intuitive and doesn’t take a lot of training to use. You want your teams to begin using the information as soon as possible, so choosing a platform with a steep learning curve that requires hours of onboarding might not be the best way to go. 

Why are User Analytics Important for Your Business?

User analytics provide deeper insight into what your customers are doing, how they’re engaging with your product, and how making changes based on that information could affect your churn rate. You can also segment customers into cohorts and break down your user base into users, power users and unhealthy accounts (i.e. those who haven’t used the product in a while and are at risk of cancelling). 

This will allow you to target your marketing to attract more people likely to become power users, and it presents a customer service opportunity to save accounts that might otherwise churn. It also shows you which features are most popular with your power users so you can strategize how to direct other users to said popular features. And then hopefully turn “regular” or “unhealthy” users into power users.

Additionally, user analytics can reveal where in the funnel users are most likely to drop off and stop using your product. This could be especially good if you weren’t aware of your product’s weaknesses before. 

Understand User Behavior

Knowing why customers and users behave the way they do is the key to growing your business successfully. If users only engage with a handful of features and the rest don’t get much play, you can better prioritize your resources to supporting the more profitable segments of your business. 

Understand User Demographics

Grouping customers into cohorts based on demographics like age, gender, or location can be a handy way to identify your company’s target audience and do more to appeal to them. 

Alternatively, by identifying traits that make customers less likely to stick with your company, you might be able to take steps to broaden your product or service’s appeal. 

Increase Profitable Product Decisions

One of the most critical insights user analytics can glean is exactly what makes you money. Then you can choose to build more of that or make those profitable features even better. You’ll receive data about how customers respond to changes in your products or services which can inform your company about which decisions were the right ones. And make more of those in the future.

Empower Your Teams

Product managers and marketers may have plenty of experience on the job, but no one is infallible. With everything going on inside a supposedly simple application, it can be difficult to monitor where the problems are coming from and address customer concerns. With user analytics, you don’t have to worry that your teams only see what they want to see.

Interviews and surveys with users are unlikely to yield the best information because users may forget individual steps or only focus on saying what they think is expected of them. Instead, user analytics gives your teams relevant information about real user experiences that can shape and inform your company’s steps moving forward. 


User analytics works by connecting multiple data points on your users to form holistic profiles. These profiles give you insights about user cohorts and the processes that users undertake when interacting with your product. With a product analytics tool like Kissmetrics, you’re able to understand your user habits on a granular level.

By understanding actual user behavior and experience, your company can grow and expand in a way that customers will love.



What are User Analytics? | Pendo

User task analysis to better understand your customers | Mixpanel

User Analytics Overview | Mixpanel

Metrics vs. Analytics: Track the Right Data and Ask the Right Questions




Though the terms are often used interchangeably, metrics and analytics actually refer to two different things. One is a noun (i.e. a thing) and one is a verb (something you do with that thing). So when people don’t differentiate between the terms, conversations around data collection can get muddy. 

Get clear on what a metric is, what it means to analyze those metrics and how to do it all effectively so you move those ever important needles. 

What is the Difference Between Metrics and Analytics?

While both metrics and analytics refer to ways of interacting with collecting data, they don’t mean the same thing. In the simplest terms, metrics are the data you collect  and analytics are the insights you draw from your data. We’ll dive into the specifics below.


As we said above, your metrics are the data you collect. Anything that can be objectively measured in numeric form counts as a metric. Some examples of metrics include:

  • Your total revenue for a timeframe
  • Number of customers in a month
  • Average amount spent per customer
  • Number of visitors to your website

Your metrics are also used to define your KPIs and how you measure your business’s success. For example, your company could watch the customer acquisition cost metric and set a goal to reduce those costs to better fit your needs. Your KPI would measure how successful your initiatives have been at reducing your CAC.

Metrics differ based on industry and it’s crucial to know which ones work best for companies who have been successful in your industry. 


Analytics is the process for analyzing your data. Analytics has nothing to do with actually gathering the data, it’s the second step where the data is given meaning. Then, based on your analysis you can make realistic goals and decisions.

Why Are Metrics and Analytics Important?

As noted, the sheer amount of data available means you need parameters to whittle down said data and decrease the amount of background noise in your information. Monitoring specific metrics can provide valuable information for your company, as long as you know what to look for.

Analytics are important for similar reasons. Setting your parameters for data collection is fine, but what you do with that data is vital. Analytics requires critical thinking to look for data trends and to understand why customers behave the way they do. It can be challenging to estimate what’s going on in people’s heads, but with the right analytics, you can make educated guesses about which features they prefer and what they want from your company or product in the future. 

How You Should Track Your Metrics

There are many software tools available to track specific metrics. Some social media platforms, like Twitter, Facebook, and Instagram have built-in tools that allow you to measure your performance within the apps themselves. These native tools are effective and collect accurate data, but it is time-consuming to compile data from multiple websites and accounts.

Instead of gathering that data manually, you can enlist the help of Kissmetrics to automate the data gathering according to your parameters. This saves time, energy, and overhead costs by keeping all of your data from multiple sources in one place. You can then run the reports you need and make fact-based decisions for the company. 

What Metrics Should You Track?

Choosing your metrics can be challenging with so many available. Some metrics, like total revenue for the year and operating expenses are particularly useful across the board. Others only apply in certain situations, like businesses with a subscription model, e-commerce or retail companies, or companies who must invest in long-term depreciable assets. 

Upper Funnel Metrics

Upper funnel metrics like those found in the Kissmetrics Funnel Report measure how aware people are of your brand and how widespread your audience is. The majority of people who know about your brand may not become customers, but it is important to have as much exposure as possible. These metrics can include:

  • Pageviews
  • Pages per session
  • Branded search
  • Website traffic
  • Bounce rate
  • Targeted engagement
  • Inbound links
  • Brand awareness

Lower Funnel Metrics

The lower funnel metrics measure customer conversion and following up with leads. This is where your audience starts to not just become aware of your brand but become customers. 

Usually, people aren’t ready to buy the first time they hear about you; they need some time to think over their purchases. These metrics can include:

  • Sales qualified leads
  • Revenue
  • ROI
  • Conversion rate

From these metrics, you can create KPIs to measure your progress like:

  • Customer acquisition costs
  • Quality of leads
  • Customer retention
  • Customer lifetime value

How to Analyze Your Metrics

Your metrics will bring in a wealth of data, but that data is meaningless if you don’t know how to analyze it. As an example, if you send out a survey asking your customers how likely they are to recommend your brand to friends and family, (known as the Net Promoter Score), you’ll receive data showing the percentage of people who would recommend you, who wouldn’t recommend you, and who feel neutral about your brand.

However, with critical thinking, you can pull out many more insights than percentages. You might look into which customers were more likely to recommend your brand. Who are they? What are their demographics? The Kissmetrics person profile will give you specific details about a customer. 

Did their experiences differ significantly from people who had lower scores or was the score based around other preferences? Our path report demonstrates how a customer went through their user journey and might shed light on any significant differences. 

Questions to Ask During Analysis

As you analyze the data gathered for your given timeframe, it’s important to keep a few questions in mind as you dive into the reports. 

Have We Set Up Our Tracking Tools Correctly?

The only thing worse than making decisions based on no data is making decisions based on bad data. So make sure you check, then double-check your parameters, how your tools are working, and how reports are generated. If you see something in one of your reports that stands out as strange, it might be an issue with how you’ve set up your tracking tools. 

If you think there is a problem, but don’t know how to resolve it, Kissmetrics provides resources for support. It’s annoying to find that you’ve wasted time by tracking data incorrectly, but it’s better to find out now and solve the problem.

Is the Qualitative Data Accurate?

Hopefully, the answer is yes. However, there are a variety of reasons why users may not respond accurately to surveys or deviate from expected journeys. Users may have had a bad day and answer negatively. Or, they may not remember precise answers for your survey. 

To compensate for this, you should carefully consider the wording of your questions and how many questions a survey contains. Single-question surveys are often the easiest for busy people to complete. You should also ensure that your questions are simply worded and plainly ask for the information you want. 

Do Other Systems Deliver Similar Results?

While we don’t recommend having multiple software systems all tracking the same metrics, we do think that there is merit in comparing metrics with ones natively tracked through social media platforms, for example, just to ensure that your software is providing similar results. Small deviations can occur because of differences in certain parameters like timeframe. For instance, your timeframe parameter in your analytics tool might be “last 7 days” and “last week” in the social platform. And if the social platform defines “last week” as in the previous traditional 7-day week, then the data you collect will probably look a little different.

But if your results differ wildly between systems, that could be a sign that you haven’t set up the metrics correctly or that you aren’t measuring the same data.

Are the Metrics You’re Tracking Important to Your Business?

While you may be able to receive some guidance about which metrics would provide essential information for your business, the best guidance you’ll get is from the experience of trial and error. Some metrics, like sales revenue, customer satisfaction, and total profit are common to all industries, but many metrics are more variable.

We recommend selecting some of the more common metrics of your industry, to begin with, and then give them some time to collect data. If you notice that they aren’t providing any value, there are plenty of other metrics for you to try. 

What Decisions Can Metrics and Analytics Help You Make?

Metrics and analytics should be the basis for the majority of your business decisions. Fact-driven decisions are always more likely to be successful than random shots in the dark. 

This extends to decisions about which features to build, how to prioritize bug fixes, which types of products you should produce in the future, allocation of resources and much more. 

They can also guide your marketing team with insights and measurements about your user base. When it comes to attracting new customers, the insights gathered from your existing customers can give your marketing team ideas for everything from email campaigns to landing pages to social media campaigns.

In short, metrics and analytics allow your company to optimize its revenue and profit. 


Collecting the right metrics is just as important as your follow-up critical analysis of that data. Company decisions about product development, services offered, and merchandise expansion should all be driven by fact-based insights into current market trends. Tracking the right data can give you an edge over your competitors and keep you in the game.

Check out Kissmetrics to see how you could be leveraging your data.



Data, Metrics, and Analytics: What’s the difference?

What are business metrics? Definition and Examples

Analyzing Marketing Data: Differentiate between Metrics and Insights