Top 15 KPIs to make your software product successful

With plenty of apps that keep flooding in the play store every day, companies are striving to make their product stand out from the crowd and get increased ROI. Implementing sound strategy has become the necessary factor for organizations to achieve this.

Top 15 KPIs to make your software product successful With plenty of apps that keep flooding in the play store every day, companies are striving to make their product stand out from the crowd and get increased ROI. Implementing sound strategy has become the necessary factor for organizations to achieve this. Table of Content 1. Monthly recurring revenue (MRR) 2. LTV:CAC - Lifetime Value of a user to the Cost of Acquisition 3. Customer satisfaction and retention 4. The cost per license and breakeven license cost 5. Revenue growth rate, or RGR 6. Net Promoter Score (NPS) 7. Does it solve a problem? 8. Monthly Qualified Leads (MQL) 9. Profit is the only thing that matters 10.Basic look and feel of the product 11. Revenue Per Client (RPC) and Profit Margin (PM) 12. Often overlooked KPI for a business software release is its lead time 13. Keep it simple, manageable, and relevant 14. Page load time 15. Revisit, and redefine the performance metrics 16. Conclusion Key Performance Indicator stands among that vital stuff which manages organizations in getting success. These KPIs help in achieving the key objectives through a set of performance measurements. Here, we have discussed the top significant strategies that are helpful to sharpen the product sense and get long-term users. Monthly recurring revenue (MRR) “For us, the most essential KPI is monthly recurring revenue (MRR). It allows us to keep track of our monthly revenue flow while tracking renewals, new sales, and churn. It is vital for a SaaS company to keep an eye on the momentum of the business, so MRR keeps us focused on the present. In these turbulent times, monthly cash inflows and short-term stability matter more than optimism about long-term sales. MRR makes our business predictable so that we can manage cash flows and costs. Another benefit of making MRR one of your most important KPIs is that it brings your administrative costs down. You won't need to allocate time and resources to calculate the number of hours employees spent per client. The fixed-fee model allows us to calculate client acquisition cost and client lifetime value more accurately, making our product more profitable. Since having a monthly-fee model with our clients, we started having more value conversations with them. Setting your clients up on a fixed-fee model involves having a value conversation with them and started offering them more than the monthly fee. As a result, this led to greater customer loyalty, lower churn rates, more referrals, and, most importantly, more revenue.” - Thierry Tremblay, CEO & Founder of Kohezion LTV:CAC - Lifetime Value of a user to the Cost of Acquisition “We focus on outcomes for all the projects we work on, which means setting KPIs at the onset of a project. Down selecting to one KPI is generally very contingent on the product and where it is on it’s lifecycle. Early on, you want simple adoption which can be app downloads or registrations. As it ages, you want deeper engagement which means you want to find what the ‘aha!’ moment of the app is and track that. Additionally, where a company lies on it’s revenue path is relevant: are they trying to adopt users to gain more funding, or are they looking to generate revenue for subscriptions or make sales? That all said, there is one lagging KPI that determines the overall success of an app and that is LTV:CAC - this number is the ratio of the Lifetime Value of a user to the Cost of Acquisition for each users. How much does it cost to obtain a user and how much will they spend before the log off forever. Ultimately, a value of more than 3 is good - but that is just a rule of thumb.” - Drew Falkman, Director of Modus Create, Inc Read More: Ways To Make Product Development Successful With Professional Opinions Customer satisfaction and retention “The one important key performance indicator which I put so much value into, is *Customer Satisfaction and Retention.* See, the thing is, you want sales, and loyal customers as well because loyal customers make repeat sales, and in a business, that's what you have to build and achieve*-return customers*. You have to understand whether the company is doing agood job of providing an efficient service, and you do so, by assessing whether your customers are satisfied with their purchase or whether they will remember your product.” - Willie Greer, Founder of The Product Analyst “If you have a SaaS product, you’ll want to measure the Customer RetentionRate (CRR). CRR tells you how many customers that you’ve fought so hard to acquire have remained with you during a specified period of time. It is particularly important for subscription-based businesses such as SaaS because they rely on companies “re-upping” their commitment to their business on a regular basis to retain revenue. So CRR is often used as a measure of “stickiness” for SaaS and other subscription-based tech businesses. CRR is first and foremost a measure of your customer service. However, a low CRR also indicates a disruption occurring in the market. The old saw about it being more expensive to acquire a new customer than it is to keep a current one happens to be true. So your profitability will usually follow the trendline of your CRR as your business matures. Bottom line: The strategies you use to increase your CRR go hand-in-hand with strengthening your brand reputation.” - Allan Borch, Founder of Dotcom Dollar “The one KPI to rule them all is user retention: How many people keep using your product over time. The more people continue using your app, the greater you’re doing as your user base for converting into subscribers keeps growing. The first thing investors ask about is, “What’s the current traction with your app?” Which means how many people install it and keep using it on a daily/weekly/monthly basis? Hammering in the answer is the hard part, though.” - Joe Tuan, CEO at Topflightapps The cost per license and breakeven license cost. “The cost per license and breakeven license cost. Some software companies ignore these two KPIs but in actuality, there is a cost for each license and there is an incremental increase in cost for each license sold (Depending on the software). Cost Per License = Fixed Costs / # of Licenses Sold Incremental Cost Per License Sold = Supporting Cost / # of Licenses Sold 'Supporting Cost' is the total in expenses for the Support Team, Software, Dev Team Usage, Sales Team Usage & Fixed Cost % for those employees.” - Paul Katzoff, CEO of White Canyon Software Revenue growth rate, or RGR “One of the bigger KPIs to show that a software is a success would be the revenue growth rate, or RGR. This is really the indicator that your revenue is growing either month over month or even year over year. If your revenue isn’t growing, it is a sign that you possibly aren’t bringing in new clients, or re-signing existing ones. It could also be an issue with not upselling additional products or add-ins. A simple fix as a price adjustment or a better marketing strategy could also solve this.” - James Boatwright, CEO of Code Galaxy Net Promoter Score (NPS) “The main key performance indicator for a successful product is the Net Promoter Score (NPS) which measures if a product fits a need that the market has. I love using NPS because it lets us focus on improving our product based on what our customers want. It is really actionable as well and super easy to implement! You can use the free version of Hotjar and start gathering data in less than a day!” - Laura Moreno, Founder of HomeFlow Does it solve a problem? “The key KPI for a technology product is the same as for any product - does it solve a problem? If it does, then it is worth making and selling, provided the problem is experienced by a large enough pool of potential customers. From this one binary KPI - does it solve a problem? - you can then come with other KPIs for success - sales, customer feedback, return rate, market penetration and others.” - Rick Wallace, Founder of Tackle Village Monthly Qualified Leads (MQL) “Monthly Qualified leads is the most important KPI of a Software/SaaS company. Unique visits, and paid or unpaid marketing ROI, all are measured on the grounds of generated leads, which makes it a practical KPI to track the success of a company. Qualified leads can be divided into paid sources and unpaid course leads for further clarity. If we take this metric one step further and separate conversions from total leads it'll provide a clearer picture of the growth in numbers. The number of monthly qualified leads is the most important KPI not only for growth but for scrutiny of marketing approaches utilized.” - Damien Martin, Marketing Executive of Shufti Pro Profit is the only thing that matters “As a company who religiously tracks KPIs ranging from finance to customer satisfaction and everything in between, to me there's one KPI which takes priority over all: *Profit*However you want to frame it. Money in the bank, cash in yourpocket, your monthly paycheck. Many people fail to underestimate how important this KPI is and instead focus more on vanity metrics. Revenue and Acquisitions don't mean anything if you're not running your software profitably. Not only that, but it puts your business at risk. If you're running razor-thin margins, you become vulnerable to volatility which, as we've all seen this year, can strike out of nowhere. Tracking raw profit is an incredibly important gauge of success that every software owner should consider.” - Mark Webster, Co-Founder of Authority Hacker Searching for Reliable Software Product Development Company? Contact Now. See here Basic look and feel of the product “One extremely important performance indicator that is often forgotten about for business software products is the basic look and feel of the product. While consumer products get all of the attention when it comes to aspects like a pleasing visual aesthetic and intuitive navigation, business software tends to be clunky and packed full of every possible feature. Software is only as good as the value it drives, and business users are no different from general consumers in that value is driven by efficient, well designed user interfaces. So while it is true that business software often needs to have a more comprehensive feature set allowing for accessing various workflows that may not be applicable in a similar consumer setting, far too often this manifests as layers upon layers of drill down menus and u clear CTAs, which require huge amounts of training in order for a company to start seeing productive value. The longer that payback period becomes, the less valuable the software is.” - Chao He, Founder of Swenson He Revenue Per Client (RPC) and Profit Margin (PM) “You can’t determine a business’ success by considering just one KPI, as success is more complicated and involved than simply looking at a single KPI. Because of this, I’d suggest you consider, at least, two KPIs. These being Revenue Per Client (RPC) and Profit Margin (PM). RPC will give you a good idea of how many clients you have and how much each client spends on your software. This will help you to determine the value of each client and you can then compare this to your original idea of what they were worth to you. Your PM will clear up your idea of how your money is being spent and how well you’re doing as a business financially. Considering both of these KPIs together and comparing your findings will give you a much clearer idea of your business and how successful it is than if you were to consider just one KPI. Having more information, in this case, is a much better option for determining success.” - Carla Diaz, Cofounder of Broadband Search Often overlooked KPI for a business software release is its lead time “One of the most important but also most often overlooked KPIs for a business software release is its lead time. This information is important to provide you with data on how long it takes between a customer request being actioned and satisfied, and this is one of those things that seems not overly valuable or important for developers but that for customers, is absolutely crucial. How you define this might be variable depending on what your software does and how it does it, but integrating measurement tools to collate data on lead time is the key to retaining and growing your client base.” - John Moss, CEO of English Blinds Keep it simple, manageable, and relevant “A successful KPI is simple and relevant to what you are attempting to measure and relevant to who the results are going to. If your KPIs are assigned to the wrong person, it requires extra time and money to interpret them. Keep it simple, manageable, and relevant.” - Laura Fuentes, Operator of Infinity Dish Page load time “Business software products are often web-based. Thus, one of the most important KPIs for them is page load time. If a website takes long to load, it will never satisfy corporate customers who need lightning-fast and reliable solutions. There are various things both developers and marketing managers can do to improve this index. Getting rid of unused code, reducing initial server response time, optimizing the size of images are just a few ways to make the page load time faster. Besides, solving the issues related to both this KPI and SEO will mean your site is ranked higher by search engines, therefore increasing its popularity.” - Vladlen Shulepov, CEO at Riseapps Revisit, and redefine the performance metrics As time changes, the business strategy would also get change for the organizations. Looking at this, the metrics that are planned to achieve business goals has to evolve. Therefore, the organizational authorities should encourage the Product management team to re-examine the performance metrics just to ensure the right decision-making. If any concerns are found, they should be decided and redefined properly. All these factors would help in making a perfect product strategy and help in reaching your targets. Conclusion Getting a feat without making an impactful strategy is impossible. Every organization whether it is a start-up or a well-established firm has to formulate sounding strategies that would take their business to the predictable heights. Among these strategies, KPI is the one that helps in refiguring the business and achieve objectives. Here, we have discussed crucial and useful strategies that lead you to get long-term users and understand the product sense.