11 Ways To Measure MVP Success And Analyze It

Right after launching your MVP for startups, the best idea is to constantly track your startup’s progress. That way, you can determine further actions you need to turn your startup into a mega-hit.

Today, we’ll discuss all the possible steps all startup founders can take and metrics they can track to measure MVP success for long-term decision-making.

When To Measure MVP Success?

Consider analyzing and measuring your MVP’s success before planning to release it. You have a higher success rate when you plan to measure and analyze your product after its launch.

What Is the Goal of MVP?

The primary goal of an MVP is to launch the product to test the market as soon as possible at the lowest possible development cost and timing on the developer’s end, along with a couple of added benefits:

1. MVP validates the idea with real-user data
2. Test who the right target audience is
3. Test product features to see what fits the market demographic the most.
4. Helps the developer grow a pre-release user base
5. Collect market data for developing an efficient marketing strategy for the future

Pre MVP Considerations

Before your MVP becomes a functional product from an idea, there are a few questions you should always ask yourself. Developing the best answer to these questions will significantly improve the efficiency of your product:

Question #1: Are You Solving A Major Problem No One Else Has Done?

If yes, your MVP is more likely to get a bigger audience.

Question #2: Are You Solving An Issue The Users Are Already Trying To Solve In A Different Manner?

If yes, then you must constantly improve the solutions you are providing.

Question #3: How Active Are Your Customers When Doing Customer Interviews?

The more active your potential customers are, the more they are interested in your product.

Question #4: Are Your Customers Discussing Their Issues With You Actively?

If they constantly communicate with you, you have more feedback data to act on.

Question #5: Are Your Customers Referring Other People To You?

The more word-of-mouth referrals you get, the bigger your user base gets.

Type of Metrics To Measure

Here are a couple of baseline metrics to measure for measuring MVP success

Vanity Metrics

These metrics can be considered shiny jewels that decorate the outside of the MVP but provide little to zero value. You can use vanity metrics to measure your growth rather than to validate your business model.

Vanity metrics include:

1. Email subscribers
2. Number of apps downloaded
3. Number of logins to the website
4. Page views
5. Total revenues

Suppose the metrics above cannot be turned into actionable metrics. In that case, these metrics cannot be used to make long-term business decisions.

Actionable Metrics

Any metric that can lead you toward a viable business decision based on it can be considered actionable. Some of the actionable metrics include:

1. Churn Rate
2. Cost Per Acquisition (CPA)
3. Customer Acquisition Rate (CAC)
4. Lifetime Value Of A Customer (LVAC)
5. Monthly Recurring Revenue (MRR)

Vanity metrics can be turned into actionable metrics by leading the user base the right way through proper CTAs and promotions.

11 Ways To Measure The Success of Your Minimum Viable Product

Though vanity metrics offer a surface-level idea of a business’s direction, the projections from vanity metrics should be taken seriously. On the other hand, actionable metrics can be instrumental when it comes to vital decisions.

Let’s look at all the performance metrics you can use to measure the success of your minimum viable product:

1. Acquisition Rate

The average number of people coming across your MVP or have started using it can be considered your acquisition rate. It’s one of the first metrics you should pay attention to.

For example, you can track the number of page visitors and bounce rate to figure out your acquisition rate for your MVP in case it’s a website landing page.

2. Client Acquisition Cost/ Customer Acquisition Cost (CAC)

Determining the cost of acquiring customers helps you re-evaluate your business decisions and monetization models. The expenses of gaining customers over the lifespan of your MVP can be considered your CAC.

Knowing how much you spend to get/ retain your paid customers can help you make business decisions and be considered an actionable metric.

3. Conversion Rate

The percentage of people who have turned from visitors into paying customers is your conversion rate.

For example, suppose you have 100 visitors on your website, and 50 people out of the 100 start subscribing to your paid service model. In that case, you have a 50% conversion rate.

4. Retention Rates

Also known as the percentage of active users, retention rates indicate the app usage duration of your product/ service.

Retention metrics can help you determine the value you’re providing with your current MVP and can help you improve your services further.

There are two major types of active users you can track to calculate your retention rates:

1. Daily Active Users (DAU)
2. Monthly Active Users (MAU)

5. Churn Rate

The churn rate is the exact opposite of retention rates. Instead of active users, churn rates help you determine the number of users who are no longer using your MVP. Lower churn rates, of course, are an excellent sign for your MVP.

If you’re facing higher churn rates, it’s time to re-evaluate your business choices, find out where you went wrong, and act accordingly to bring down the number of departing user base.

6. Number of Paying Users

As the name suggests, this metric separates paying users from regular users. For example, you might have 100 people using your app, but only 20 might be paying for all the features locked behind a paywall.

7. Monthly ARPU (Average Revenue per User)

When you divide the amount of total revenue by the number of users you have, you can find your ARPU. When tracking ARPU, track the products or core features that bring in the most revenue.

8. Client Lifetime Value/ Customer Lifetime Value (CLV)

You multiply the average annual customer profit by the average duration of customer retention to figure out your CLV.

Simply put, CLV is the value a single customer provides to your company over their retention period.

9. User Ratings and Customer Satisfaction Score

We also call it the score of happiness. The more satisfied users you have, the higher the satisfaction score you receive, bringing in good user ratings. All of it depends on the following:

1. Performance of your MVP
2. How reliable is your product is
3. How secure is the MVP is
4. The amount of support your users get when using your MVP
5. Quality of customer experience with your MVP

A higher score always means a satisfied bunch of target users. The best way to determine user ratings is to use a built-in rating system or outright ask the users through social media or forums.

10. Download Rate

The download rate shows how many users downloaded the app. People don’t usually download and abandon apps; they typically sign up. If you want to track the sign-up rate, you can do that from your backend to gauge your users’ interest.

Always provide a built sign-in prompt within your MVP so that whoever downloads the app has to sign up. Sign-ups can often convert to revenues based on the level of interest of your target customers.

11. Return On Investment (ROI)

The ROI is measured based on the values that your MVP creates. Here are three ways your MVP generates value:

1. Revenue Generation: The most general idea of value created by an MVP is the revenue it generates.
2. Subscribers Gained Through MVP: It’s sometimes about something other than revenue. New subscribers gained can also be converted into paying customers.
3. Average Order Size: This metric can help you figure out the part of your product generating the most revenue and help you act based on the information.

To Wrap It All Up

Measuring the success of your MVP should be planned from the ideation stage of your MVP. Measuring the progress and success of your MVP helps you plan your development process and marketing strategy accordingly.

The best way to measure your success is always to ask for customer feedback to make the best decisions. If you want professional help with your MVP, Impala Intech is happy to help with free consultations!

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