The Only Number That Matters

While I was at Intuit the key ‘customer’ metric everyone focused on was Fred Reichheld’s Net Promoter Score. This measurement was seen as the Ultimate Question and was used to manage customer satisfaction for all their offerings.

When we launched Aha! Baby  we measured Net Promoter and had some very good results. However, no one was telling their friends about Aha! Baby.  We found that the dynamics of a free web service does not lend itself to using Net Promoter as the key indicator of success, although it is certainly helpful for understanding the overall satisfaction of your offering for users. The problem is that there are many assumptions in how Net Promoter works with respect to length and type of experience, depth of brand engagement, ease of becoming a repeat customer and potential for word-of-mouth marketing.

The challenge with Aha! Baby was that as a search engine, a great user experience meant getting them to another site as quickly as possible.  Their first use experience could have been a 9 or 10 NP Score and lasted less than 10 seconds.  If we didn’t interrupt their experience to ask them the Net Promoter question, they might not even have remembered the site name depending on how they came to Aha! Baby.  This starts getting into some of the issues. The success of the site was dependant on elements other than just the quality of the search experience.  Different traffic sources (e.g. SEO, SEM, other sites) provided different quality of traffic.  As a search engine, we didn’t require users to register, thus had limited ability to actively try to retain a new user. We did not have a distribution agreement with other sites, so we were not the ‘default’ pregnancy search engine that many users would see every day. Finally, we did try some viral marketing with Aha! Baby Sneak-A-Peek , but the tool was not connected to the core search site to create meaningful synergy.

So what does this all mean other than providing insight into the challenges Aha! Baby faced? Well it means that while we had a great search product, using Net Promoter was not the best metric correlated to predicting the success of the site.

If you have a free online consumer property and are trying to build an audience the only metric that really matters is your retention rate.  In particular, the week-over-week decay rate.  There are lots of very well-written articles explaining how retention rates work, churn and stickiness .  Now related to this is the virality of a property (aka k-factor). A property’s k-factor can dampen the effects of a low retention rate, but there is a balance that needs to be struck to make sure that the combined acquisition and retention tools create a sustainable long-term growth engine. While DAU/MAU (Daily Average Users / Monthly Average Users) is a great normalizing metric to compare across apps and benchmark your success, early on your focus should be on your retention rate. The fastest way to grow your audience will be by retaining users and then using your installed base of users to attract new users.  Having a great Net Promoter score should significantly improve your retention rate and is usually a necessary input, but it is not sufficient.  Acquisition (distribution) channels, retention tools, viral tools and conversion/activation capabilities all drive retention.  Each of these factors drive the success of an consumer property and thus optimizing for a great retention rate (with the help of an analytics tool like KISSmetrics) is really the only number that matters as you begin to grow your audience.