Thoughts from my journey

Following Lincoln Murphy’s post on SixteenVentures.com (talking about conversion average rate for free trials, pricing pages or Freemium for SaaS or Web Apps), conversion rate average figures will do no good, as it doesn’t reflect the whole picture and usually lacking context.

It’s hard to know what metrics are being used for the “average conversion rate” and Lincoln claims that looking on average numbers to plan businesses around might make us average ourselves – and who want to be considered average?

Every company aspires to increase their conversion rate figures but Murphy’s suggestion is to figure out where you are today and then figure out how to make it better.
Meaning, if you’re at 1% conversion rate, reaching 2% is achievable, even though it’s 100% increase over what you have now.

I agree that context is crucial and also explained about this in “Measure trial conversion rate” webinar. Furthermore, in order for each SaaS business to understand where they stand, a lot of other metrics need to be taken under account besides conversion rate from free to paying customers. For example – do you also review unique visitors to your website? Social media mentions? signups, churn rates, customer lifetime value, account activation rate, account usage statistics, etc.?
All of these are metrics that should be taken under consideration in order to reflect the whole picture for a SaaS company and to allow it to set its goals.

Which metrics do you use to make your goals setting?

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I came across “What is user engagement” article by Jordan Willms of Work at Play. In this post, Jordan defines a good engagement metric as the number of user actions divided by the number of content items. The example provided is of blog posts comments divided by the number of posts per month.

This is certainly a very interesting metric. It made me think, does this also make sense to web application usage?

Following the same logic, in web applications (as opposed to a content site) we would count features and divide those by the number of user actions. I’ll use Google Docs as a simple example:

Say the features are: New, Save, Print and Share document. Total of four features.
For each user the engagement metric would be the number of activities divided by four.

Let’s see the score of two users over a week of usage

User A scored 8 while user B scored 7. By this engagement metric user A explores more the feature set of Google Docs and is more engaged.
On the other hand user B uses a more competitive feature of Google Docs, which is Share Document, hence might be a more valuable user of Google Docs.

Although this engagement calculation method isn’t perfect I’m convinced that this it is better measurement of user engagement then by just counting “number of logins” which is what most application owners do.

What do you think?

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About TOTANGO:
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Businesses these days are making significant efforts to delight their customers, and for good reasons. One of the key areas where businesses focus their efforts is in creating online self-serve applications with a great user experience in order to help customers get what they need and when they need it.

But how do businesses know if they are successful? Below are 3 key metrics you need to measure customer engagement.

1. Activity Time

When an online service creates value, people use it and use it often. Usage is measured by the number of times a customer visits your service (sometimes termed sessions) and the elapsed time they spend in using it.

We call this Activity Time – the total time a user spends online, interacting with the offered service. Note that Activity Time measures the actual time a user spends interacting with the service, and factors out time in which the user is idle (even if logged-in). This is critical given modern usage behaviors where users typically have many web-applications and sites open on different browser tabs.

2. Visit Frequency

How often a user returns to your service is a key reflection of the value they get from it. This is often called Visit Frequency.

Visit frequency yields many potential patterns in customer behavior, as shown in the table below. The main goal is to identify the pattern that is most relevant for your service and monitor users against that pattern. If you expect a delighted user of your service to visit every day, measure against that, if you offer a seasonal service and expect them to only return on holidays, look for that pattern and so forth.

3. Core User Actions

Another indication of value customers gain is their use of Core User Actions, as defined for your service. If a user is consistently performing core actions, it is a good indication of adoption. When user’s explore new features and start to use them, the service is growing on them, and they are happy to use it more.

Conversely, if a user is not performing Core User Actions, while still spending time on the service, it may be because he is unable to get to it (indicating a usability problem) or that you don’t understand the value they are getting. Regardless, it requires further investigation to make sure the user and your offering are on track.

Core User Actions are naturally service specific, the following table gives examples of certain types of web applications and online services.

Creating an Engagement Score

A combination of these core metrics: Activity Time, Visit Frequency and Core User Actions uncovers the level of user engagement for any web-application or service. To get to the combination that is right for your particular service requires some thinking and modeling of the expected user behavior.

It may not be simple to do, but it’s essential if you want to continuously delight users and in turn increase their life time value. If you want the best tools in the industry for this job, we recommend you learn about Totango and signup to get started with these concepts today!

Learn which metrics other Sales Executives use?
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About TOTANGO:
TOTANGO analyzes in real time customer engagement and intention within SaaS applications to help you grow your business

Increase your customer engagement now!
Try TOTANGO free for 30 days

Understanding the amount of time users spend in your application, and the actions they take, is the best way to know the level of value they are getting from your service. You can now use Totango to do just that.

We’re excited to announce a new version of Totango including the new Activity Time Metric. Totango now analyzes the activity stream of each user and calculates the amount of time spent interacting with your web application. The metric is provided at different levels to uncover key trends and insights:

– On a global level for the entire user-base. So you can keep a pulse on the overall value your application is delivering

– For all users associated with a particular account, helping sales teams determine which accounts are productive and which require more attention to become successful.

– Individual user basis, to identify the true-champions in each account

If you’re a Totango user, please login to check out how Activity Time can help increase SaaS sales. If not, signup to learn how

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About TOTANGO:
TOTANGO analyzes in real time customer engagement and intention within SaaS applications to help you grow your business

Learn what users are doing in your application!
Try TOTANGO free for 30 days