In a world dominated by trends, tech-savvy businesses are now able to appeal directly to consumers through social media campaigns. This is just one of the reasons why traditional retailers may find it difficult to stand out in such crowded and competitive landscapes.
Therefore, when it comes to securing the financial support needed to fund a startup or scale a business, one of the biggest concerns for investors is entering an already saturated space. They want to see that your product is a real innovation and has the potential to be a market disruptor.
One of the best ways of demonstrating this is through KPIs or key performance indicators. As global leaders in digital health and wellness, Kilo Health explains exactly what these are and how they can be used to stay on top of your product's success.
What Are KPIs?
Key performance indicators are an important measure of how successful a company is in making progress toward its goals. They can help businesses identify where their strategies may be going wrong, as well as what they can do to get back on track.
Some examples of financial and marketing KPIs that any business looking to measure the success of their product may want to consider include:
- Revenues and profit margin
- Engagement with brand campaigns
- Website and social media traffic
- Conversion rates
- Customer satisfaction rating
Deciding on relevant KPIs to measure during the product development process can allow the business to set micro and macro goals. These targets will allow you to measure your success on a monthly, weekly, or even daily basis, and put data-driven strategies in place.
For instance, you may be aiming to get a certain level of engagement on your company's Instagram posts. Over time, this can help you keep on top of important metrics such as customer acquisition and conversion rate, which indicates how quickly your product is grabbing the attention of consumers.
How to Measure Product Success Using KPIs
Of course, every business will prioritize different KPIs depending on the industry they're operating in, the type of product, and the size of the company. Selecting meaningful metrics can help to deliver valuable insights on how your brand can better achieve its objectives.
However, when operating in crowded markets, here are three key ways that most companies can measure the success of their product launches:
Look at Customer Satisfaction
73% of consumers feel that the experience of other customers is an important factor in determining their purchasing decisions, which is why tracking customer satisfaction is so imperative.
One way of measuring satisfaction is by turning it into a quantitative metric such as a Net Promoter Score (NPS), which measures customer loyalty. This can be decided using a survey that offers scores from 0 to 100, with a higher score from customers being more desirable.
You can then measure the score against industry benchmarks to get a clear idea of how well your product is competing within your chosen market.
Calculate Client Retention Rate
Client Retention Rate (CRR) refers to the percentage of customers who keep using your product. This is another important measure of loyalty and can indicate how satisfied consumers are with what you have to offer.
The best way to calculate this is to measure how many customers were acquired during the period and divide it by the number of customers you had before the period. Multiply by 100 to get your final percentage.
Evaluate Your Traffic
While not directly related to the number of units sold, looking at paid and organic traffic is an effective measurement for determining the success of your distribution channels.
This can be particularly effective for companies that primarily use paid partnerships and advertising to sell products through their website and social media channels. You can assess which ones generally generate a low return on investment and see where you should invest your capital instead.
Final Thoughts
Successful products should resolve key pain points, meet the needs of customers, and fulfill the expectations of creators, which can be measured using key performance indicators.
So, if you have a truly innovative product, a clear vision, and the right people to execute and monitor the success of their strategy, you and your business shouldn't be scared to enter crowded markets.
Contact:
Juste Petraviciute
Senior Reputation Manager
juste.petraviciute@kilo.health
