Defining and measuring the action that helps people solve the problem they signed up to solve allows you to optimise for core customer value.
Picking the right action involves listing out all of the things people can do that indicate they’re addressing their primary motivation for signing up.
There are a finite number of things people can do in your app and common sense will be your friend here. If you offer rideshare then it’s booking a cab, if you deliver food then it’s ordering dinner, if you offer courses then it’s doing a class.
What is the thing people do to receive the core customer value?
This process isn’t always neat. You might end up with lots of maybes and that’s fine.
To narrow it down you want to think about how often people experience the problem your product solves. A good metric will line up with your best guess of how often they experience the problem.
Once you have a shortlist then you need to cross-reference everything with actual data.
The action you end up picking must correlate with long-term usage.
The whole point of measuring the action that provides your core customer value is that when people do it they’re more likely to stick around in the long run.
If you still have options at this point, always go with the one that’s easiest to understand. A decent metric that’s simple to grasp is better than an accurate one with lots of footnotes.
You want the simplest action that indicates that your product solves the problem people signed up to deal with.
Links to more on measuring you core customer value:
- Amplitude’s playbook on mastering retention is a great resource for defining and measure what they call the critical event. It’s also completely free.
- Another post I wrote on shaping your retention metric.