Three key metrics to track for your product launch.

#startupstrategies, #productlaunch, #startups,#productmanagement

Operating in an environment of scarcity (VC funding down 53% in 2023) where founders are turning to structured term sheets, falling valuation, increased competition , it is therefore imperative to "disrupt" (an emerging) market and dominate it later on. And it all starts with ensuring a successful product launch.

But what makes a successful launch and ultimately a successful enterprise? In the following blog, I will outline three key metrics that founders must track at launch.

Therefore, we will focus on the last stage in the product development life cycle - the In-Life stage.

source: Author

Types of Metrics

The type of metrics that will be monitored most closely could be specific to the launch, product adoption, market impact and qualitative feedback. Be specific on what you want to measure and why. Your product management team should review the goals for the product launch and respectively track the progress of each during and after the launch. The product launch itself includes several stages including pre-launch, launch and post-launch.

Pre-Launch (Beta)

This is a critical stage for any product manager as it will help predict the success of the actual product launch. Here a product announcement landing page should be in place, specific to your target group describing in simple language the benefits for the user (value prop). Having a well defined "persona" will assist you in knowing what matters most to your target group. But whatever you do, do not overpromise, underdeliver and overwhelm the user with your content!

Chargebee's short and concise copy is a great example of a compelling message underlying the unique selling point as well as an easy step to for a free sign up.

The landing page can also add sign up perks and benefits such as limited time discounts (SaaS) and how to best take advantage of the unique opportunity and provide incentive to join your "waiting list." Here, you could add a countdown to the actual launch to keep users excited.

Personally, I see this stage as an opportunity to gather feedback from potential customers. Another way to attract early users and gather feedback is to announce your product launch on ProductHunt, aside from social media.

Assuming that you have fine tuned things like value proposition, and have taken the time to validate the market through free trials, demonstrating how your product is superior to the competition, you can focus on a few SMART KPIs to track sales, number of sales needed, customer acquisition cost (CAC), lead conversion, product adoption among others.

Product Launch (Metrics)

During this phase everything revolves around the actual launch date - all the promotional activities such as advertising and marketing to help you reach your users. Here's a short list of relevant launch metrics:

• Leads. Generally this is the first step in getting users attention in your product. First impressions matter. Your website is a great source for leads. You must be able to answer a question from user's perspective: What's in it for me? Your source of lead could be a request for a download, a whitepaper download or Google search. More recently companies like Slack and Calandly have reinvented a strategy what is now known a Product-Led Growth, which relies on end users discovering, trying and buying almost entirely on her own. Often through word of mouth.

• Website Traffic. Track the number of visitors/views of your product content such as blog, videos, white paper or any other such e-documents that can bring traffic.

• Customer Acquisition Cost (CAC) - Metric #2. This is a metric that helps you estimate how much it costs you to acquire a new client. It's an efficiency metric of your acquisition efforts in letting you know how much you spend on your marketing efforts. To calculate CAC simply take the number of sales in a given period and divide by the number of clients, e.g. $20,000 in marketing costs, 200 new clients = $100 per new client. SaaS businesses often look for a ratio of 3:1 (Long-term value : CAC).

If you are planning a big launch a PR efforts could pay dividends especially if you are looking to create and build brand awareness. In the past, I've used PR announcements only to highlight partnership with a well known organization of which the product was in center stage.

Post-Launch

• Customer Activation (Adoption) Rate. This a percentage rate of your customers who have been successfully activated. The ratio here is the number of users divided by the number sign-ups. 200 users became clients out of 2000 sign-ups. That's 10%. For SaaS business this is a low percentage of activation. Needs to be above 40%.

• User Retention Rate (#3 Metric). For some businesses it's easier to acquire clients but challenging to retain them. In the last year alone I've signed up to 4-5 different streaming providers: Fubo to watch the World Cup, Disney+ to watch the Mandalorian series, Hulu, Netflix, YouTube etc. The only subscriptions still standing in auto renewal is Spotify. At the same time if you are a client of JP Morgan Chase, you'd never move your account. They got you for life.

User retention rate or also know as churn rate is simply taking paying customers at the beginning of the month and diving them by the total number of clients (paying and non).

To control high churn rates, >5%, Product Management needs to be able to answer the following questions:

• What triggers users to adopt a product?

• How long do users use the product before dropping off?

• What is the quality of the engagement?

• What is the overall (in-app) experience? 1-2 a week as a fintech app or daily (Facebook, TikTok)?

• How many of the new users remain clients, past 3 months or a year?

Measuring retention and churn rate can provide insights to product managers as to what value users are gaining from their products. Moreover, it can help PMs introduce new features, design new solutions and enhance the life-cycle of that product.

To sum it up, launching a new product is a learning experience for all stakeholders. It's an attempt to understand the needs and wants of your target market. 40% of new products never make it to market, only 60% make positive revenue, according to the Association of Marketing Research. Therefore, teams should establish a plan that nails down all the assumptions from the beginning. This could be a checklist for managing pre and post launch activities, effectively.

Most importantly, launching a product is a team efforts. Involve all the right stakeholders throughout the process - IT, marketing, business development, customer service - early on.

For more product strategies, including a complimentary consultation, please contact us at: info@nestorglobal.net

Till next time!