Demonstrating Success - Return on Investment
Matt Francis here, LiveStyled’s Customer Success Manager, bringing you a short post with my thoughts on the key metrics you should be focusing on to measure the success of your app.
At LiveStyled, we know as much as anyone that tracking performance across your digital channels are winning is critical to how they are perceived across the business. Its exactly that knowledge that can lead one to think that you need to track a hundred different KPIs to demonstrate success.
Having access to stats such as ‘Average session time’ and ‘Most popular territories’ is certainly useful, and critical from a product and marketing perspective. However, when customers' success is the end game, experience has taught me less is certainly more.
Let me first caveat what follows by acknowledging that 'success' for each roll out is different, and for this post - I’ll be focussing on our Monetise module, or commerce functionality for the less acquainted!
Before we double click into my ‘big three’, let’s first remind you of the three core ways that our clients are generating revenue through the LiveStyled platform. Simply click in to each heading to access our ‘Monetising Mobile’ article on each method.
Now at the end of the day, for any commerce based service, its very clear that revenue is the ultimate demonstrator of success and always will be. However, the below metrics are key to illustrating that your app is making a real difference to your business.
With each of the three metrics I highlight here, its important to have a Year 1, 2 and 3 target for each metric - to ensure all focus is on driving year on year increases.
So, without further ado -
The first key metric you should be targeting and tracking is penetration rate, the percentage of your venue's audience that you are converting to an active user on a given night. Put quite simply, you can’t generate revenue through your app if no one is downloading your app.
Targets for this metric vary from project to project, usually based on the app’s USP. For example, a venue making mobile ticketing the sole way of entering a venue is going to naturally expect to see a higher penetration rate.
Second up is conversion rate, specifically the percentage of your app users that you are converting to paying customers. Whether the core commercial focus of your app is merchandise, F&B or premium upgrades - how well you are converting users to customers is an important measure of success.
Not only is it a good measure of how good your mobile experience is, but its also a measure that isn’t available from over the counter sales - the reason for this being that venues know how many transactions have been made on a given night, but not how many customers have placed them.
So with these two metrics combined, we’re now demonstrating that we have a high numbers of users on our app and that a high percentage of them are spending money. However, on many occasions our Customer Success team will hear the words: ‘there’s a very good chance we would have made made that money anyway’.
Introducing, metric number three!
Average Uplift in Average Transaction Value for app orders vs. cash
To complete our jigsaw puzzle, is a metric that combined with 1 and 2, is extremely powerful in highlighting an app's success.
By analysing data sets across our client base and across the mobile commerce industry, its no secret that those paying through mobile are paying more per transaction than those paying by cash or card. Much research has been conducted in to this area, with all research highlighting that those using their mobile are less aware of parting with money as it doesn't feel real.
To work out just how much more your app customers are spending on mobile, you can use the formula below:
Total app revenue / Total app transactions = Average transaction value (app)
Total cash/card revenue / Total cash/card transactions = Average transaction value (cash/card)
Average transaction value (app) / Average transaction value (cash/card) = Uplift in app orders vs. cash orders.
So, if you can drive a high number of users to your app, increase this number year on year and then convert a high percentage of those users, you'll know you've created a good customer experience. If you can then demonstrate that those people are spending more money through their phones - well then, that's customer success.