In an age of rapidly changing demands and high competition, it’s imperative for all businesses to understand how well they’re performing and whether they’re moving in the right direction towards accomplishing their objectives and fulfilling customer needs.
To accomplish that, these businesses will need KPIs in the form of actionable data to give insights for every department on how successful they are in reaching their goals. These KPIs can take on various forms depending on the needs and circumstances of each business.
Put simply, KPIs are performance metrics that measure performance based on key business goals that are used as indicators into what your organization needs to achieve to reach its long-term objectives and make more informed strategic decisions.
Thus, their purpose is to provide data on various aspects of a business. In this article, we will focus on the KPIs designed to measure the core of your business: your products. In particular, we’ll be looking at how to measure the success of new features of your products to determine whether they have the intended impact on your business (and your customers).
How to measure new feature success
More often than not, product teams are working on optimizing and updating an existing product based on customer feedback. This means that new iterations of a product are released in the form of features.
We always hear about how to measure the success of new products but measuring the success of individual product features is just as important so teams are not wasting valuable resources by developing features that are actually not being used.
This article will go through some of the key KPIs that teams should be tracking to measure the success and performance of new features to ensure it meets consumer expectations.
Any feature you release should be tied to and aligned with the overall business objectives and consumer needs. This will then serve as the foundation for defining what the criteria for success look like.
Afterwards, you can determine the KPIs that will help you track the success of your product features, which are related to your organization’s overall OKRs and to analyze the impact your features have on your business post-launch.
Each KPI should have a threshold which is considered as good or poor performance and an action plan should be put in place in case a feature is not performing as well as expected.
Before going further into the typical KPIs to track for feature success, remember that the KPIs you choose should be: measurable, specific, relevant, actionable and align with overall business strategy and outcomes.
Setting the right KPIs early on is essential as they allow product managers to evaluate feature usage, engagement and user experience to gauge its success depending on what the objectives are. It gives teams a framework to start measuring the things that matter most to your business in order to make better informed decisions (and build better features).
In sum, to determine new feature success, you need to consider the following points:
- The goal of the new feature– once you narrow down the objective of your new feature, it’ll be easier to determine which KPIs you need to focus on. Remember that your feature goal should be aligned with the larger business or product goals and overall product vision.
- What KPIs to monitor
- What success looks like– this will primarily depend on the goal of your feature.
The next section will highlight some of the key KPIs that will help you determine the success of your new feature.
Key KPIs to measure feature success
- Active users
To analyze user engagement, you could start by looking at the number of active users who are using the feature. Active users are those who engage with your new feature and perform some kind of action. In other words, they are actively using the feature.
These can be divided into three categories:
- Daily active users (DAU)
- Weekly active users (WAU)
- Monthly active users (MAU)
- Session duration
You can also track session duration to measure the total time spent by a user using the feature. It can also give you an indication into how much a user enjoys the experience of using the new feature- whether they’re leaving right away or actually spending time using it.
The best way to measure session duration is to calculate the total time users spend in your feature divided by the number of users in a given time frame. You can then take the mean value to find the average time spent using your feature in a given session.
Average Session Duration= Sum of Individual Session Lengths / Total Sessions During that Time Frame
- Number of sessions per user
You may also want to look into the number of sessions for each user in a given time period to hone in on those users that are using your feature more than once every day. Thus, this can reveal the popularity of the feature since the more a customer interacts with your feature, the more likely they are to remain an active customer.
To obtain this figure, calculate the total number of sessions in a given period divided by the total number of users in that same period.
You can also consider collecting their feedback to gain insights on what they like about your feature and the value they get from it, particularly from those who spent a considerable amount of time using the feature.
- Customer retention
This refers to the percentage of customers retained within a specific time period. Tracking this KPI will help you determine how well your new feature resonated with your customers and whether it helped to improve retention.
This can usually be calculated by picking a certain period that you want to measure and then finding the numbers for:
- Customers you had at the beginning of that period
- Customers at the end of the same period
- New customers added in that period
Customer Retention Rate= Total Number of Customers at the End of a Period – New Customers Acquired/Customers at the Start of the Period
- Customer churn rate
Unlike retention rate that measures the percentage of customers who stayed, churn rate measures those you’ve lost.
A high churn rate usually indicates that your feature or product is not delivering the value expected and not fulfilling your customers’ needs. For example, if you measure churn rate after introducing your new feature, it can give you insight of how satisfied they are with this feature and how well it resonated with them.
To calculate customer churn rate, you start by finding the number of customers lost during a certain period of time and divide it by the total number of customers at the beginning of this period.
Customer Churn Rate = Customers Lost / Total Customers
- Customer satisfaction
Using the Customer Satisfaction Score (CSAT), you can measure how satisfied your customers are with a specific feature- user sentiment.
Using a customer satisfaction survey, customers can rate their satisfaction on a scale from 1 to 5 with 5 being “very satisfied” (or sometimes on a scale of 1-10) as seen in the image below. The satisfaction score can then be calculated by dividing the number of satisfied/happy customers by the total number of responses.
For example, if the rating is from 1-5 then you would typically be collecting the total number of 4 and 5 responses for the “satisfied customers”.
CSAT score: (The Total Number of 4 and 5 responses) / (Number of Total Responses) x 100 = % of Satisfied Customers.
Thus, a CSAT survey could be used to ask customers to rate their experience with a new feature. Make sure you also follow up on low CSAT scores by reaching out directly to these customers to find personalized solutions to any issues they’re facing.
- Net promoter score
The Net Promoter Score (NPS) determines customer satisfaction and sentiment by measuring how likely customers are to recommend your product to others on a scale from 1 to 10.
The NPS score can be calculated by subtracting the percentage of detractors– those who give a score of 6 or lower- from the percentage of promoters– those who give a score of 9 or 10.
While NPS is usually used to gauge sentiment for your product as a whole and overall customer experience, it can still give you an idea of how happy customers are with your product and could give you insight on how to improve it (by introducing new features, for example). This can be done by following up on customers’ responses to find out why they feel that way and the kind of features they’d like to see introduced to enhance the user experience.
Why is measuring success important?
As we’ve seen, there are a number of KPIs (among many others) you can track to measure your new feature’s success.
But, why is this so important?
The simple answer is that you’ve invested time, money and valuable resources to build this feature and so if it’s not performing as expected then it’s crucial to look into why that is in order to improve it (or in the worst case scenario, remove it altogether).
To delve deeper into the importance of measuring new feature success, tracking KPIs will help you stay on top of whether customers are actually using the new feature. For example, the usage KPIs discussed above will allow you to deduce whether your feature is receiving enough engagement from customers.
Setting clear KPIs and designated thresholds for these KPIs as well as an action plan early on will enable teams to ascertain a feature’s performance shortly after it’s released and make informed decisions quicker and more effectively.
Once you’ve decided on the KPIs you want to track, you should start thinking about the kind of tools you will use to gather the necessary data. This will depend on factors such as the resources you have at your disposal and how complex the KPIs you want to track are.
After collecting all the essential KPIs, it’s the product manager’s responsibility to provide information about the performance of the new feature and insights gained to all the relevant stakeholders.
Tips to ensure new feature success
- Announce new features
The first step to ensuring the success of your new feature is to bring awareness to it. This means you should make sure you let users know that you’ve launched this feature by using multiple channels such as on your blog, social media or through in-app announcements.
This may not be necessary for every feature release. In other words, you want to be careful about sending out too many notifications about new releases so often, which could have the opposite effect and put off customers.
In your announcement, make sure you explain your feature in-depth; in other words, how it works and how it will change the user experience.
This is also a chance to collect valuable initial feedback that you can use to optimize your feature.
However, bear in mind the audience you want to target with your announcement. Some user groups may be more relevant than others for a particular feature release. Thus, be selective when it comes to bringing awareness to your new feature.
- Set up tutorials and webinars for educational purposes
A great way to explain to your customers the value your feature brings to them is by releasing tutorials and organizing webinars to give a deeper look into the new feature.
This is a great way to get up-close and personal with your customers and have one-on-one interactions about the feature and get the in-depth feedback you need to optimize your features.
- Segment users and gather their feedback
Once you start tracking KPIs, you will be able to determine what kind of users are most engaging with your new feature. You can segment users and place them into different groups such as those who engaged with your feature more than once, those who engaged once and those who have never used the feature.
Segmenting users this way will allow you to identify a usage pattern so you can deduce what kind of users are most likely to use your feature and allows you to collect actionable feedback from each of these segments to better understand how your new feature is being adopted (and why it’s not resonating with some).
While KPIs and metrics give you raw data to monitor what your users are doing, it’s important to put this data into context to get to the why.
Therefore, collecting feedback will help you iterate and optimize your feature for better results. It could also give you great insight on how to convert infrequent users of your feature to more engaged users, for example.
- Opt for a “soft” launch
Sometimes, releasing a brand new feature may be a risky move. In this case, you might want to consider releasing this feature to a pre-chosen subset of users to collect their feedback and improve the feature based on the feedback before going for a full release.
For example, you could test internally within your organization. This way, internal teams can test out the new feature and learn more about it regardless of whether or not they interact directly with customers. This is also a risk-free release as you’re only testing within your teams, who in turn can give you the right kind of feedback to optimize your feature before releasing externally to customers.
Afterwards, you might still be wary about releasing your feature to all your customers. Luckily, there’s a foolproof way to release to a small number of your target audience and that’s through feature flags.
When knowledge really is power
KPIs provide you with an essential framework to help measure feature success and allow you to identify areas for improvement to ensure customer satisfaction and loyalty.
As already discussed, there is no one-size-fits-all approach when it comes to choosing the right KPIs. It will largely depend on your feature goals, your overall objectives and the industry you’re in.
However, it’s best to make sure that they are not only aligned with your product and business goals but should also be focused on customer satisfaction and value. Ask yourself what you really want to learn from these KPIs and remember to put the user at the heart of whatever KPIs you end up choosing.
Tracking feature performance (and measuring its success) early on- or shortly after release- will put you on the right path to customer satisfaction and retention. With any feature you release, it’s important to look for ways of improvement and find the right audience that will most likely find value in it and use it.
However, remember that KPIs are valuable but are not sufficient on their own unless teams can extract learnings and insights from them as well as give context to them in order to drive your future planning and deliver better value to your customers.