Optimizing Growth: Selecting Metrics and Leveraging High-Value Moments in CRM
The strategic guide to north start and focus metrics, and integration of high value moments into the CRM growth strategy
Intro
Diving into discussions with founders and growth marketing leads recently, we often found ourselves up to our necks in CRM and retention marketing metrics. The core of our debates? Two main questions kept surfacing:
How do we define what success looks like through metrics?
How do we leverage these metrics to fuel long-term growth?
While these weren't new questions for me, my past approach was pretty straightforward. I would pinpoint a key performance indicator (KPI) for the overall growth of the customer base, select the most promising version of that metric, and then focus on optimizing it across the lifecycle journey. This method, while effective to a degree, was somewhat limited in addressing the long-term impact.
What I'm getting at is this: how do we strike a balance between our immediate actions and their long-term repercussions, ensuring that our efforts to achieve short-term growth also pave the way for sustainable, long-term success?
This realization led me to a journey of one that considers the dynamic nature of customer relationships and the pivotal moments that define their journey.
Defining success metrics
Diving right into the heart of the matter, let's unpack what we mean by "success metrics."
For marketing teams focused on growth, challenges often center around questions like:
What can I do to get more clicks on our platform?
How do I improve customer conversion?
Which channels are the best for generating new users?
While these questions are valid and crucial, they tend to be quite narrow in scope. This narrow focus might lead us to overlook the broader perspective, inadvertently fostering a short-term mindset. So, what's the "bigger picture" here?
It's about gaining a holistic understanding of the customer's journey from start to finish.
And why does this matter? Because it prompts deeper inquiries such as:
What are the key data indicators to purchase?
Which user behaviors indicate a higher likelihood of conversion?
What are the key drivers behind user activation?
What early-stage user actions, or lack of, indicate churn?
These questions compel teams to establish a framework of metrics that truly resonate with what's most critical for product growth. Such pivotal metrics, as I would refer them to as focus metrics, guide us towards a singular, overarching metric that embodies success: the North Star Metric.
Identifying Your North Star & Focus Metrics
The North Star Metric is essentially that key measure that captures the essence of the value your business delivers to its customers. It acts as a beacon, guiding your company towards sustained growth and, crucially, ensuring customer satisfaction.
Take a look at some North Star Metric examples in the consumer space:
Monthly Active Users - Facebook
Number of Transactions per Week - Careem/Uber/Delivery Hero
Booked Nights - AirBnB
Daily Active Users - Slack
Time spent watching streaming content - Netflix
But what about focus metrics, also known as input metrics? These are the pivotal actions that influence your North Star Metric. They're essentially the precursors, either directly impacting or closely linked to your main metric. These metrics often encompass aspects like reach (breadth), richness (depth), frequency, and efficiency.
For instance, in a delivery app context, focus metrics might include:
Breadth - Number of new users acquired per month
Depth - Average Order Value per transaction
Frequency - Number of Transactions per Month
Efficiency - Share of Orders Delivered on Time
With a clearer understanding of the North Star Metric and its focus metrics, the next step is figuring out how to effectively implement and leverage them over the long term.
High-Value Moments: Catalysts for Growth
Let's break down what high-value moments are and what they really mean in the user journey.
Imagine this: a user spots an ad or hears about your app from a friend. They sign up, start exploring, and eventually, make a purchase. In the context of a delivery app, this could be placing a food order—a key transaction. With each timely delivery of piping hot food, the likelihood of the user sticking around increases.
But it's the myriad actions and events leading up to that pivotal "AHA" moment—when the user truly sees the value in your service—that are crucial. The more such moments users experience, the more they're likely to form a habit around your product. These moments are what keep users coming back, turning occasional users into loyal customers.
These moments are what keep users coming back, turning occasional users into loyal customers.
Identifying these high-value moments is key to boosting retention and ensuring ongoing value.
While the value of high-value moments is clear, the key lies in how engaging users at these pivotal points can encourage them to use your product more, breaking down barriers and boosting loyalty.
Let's delve into a practical example:
High-Value Moment: The user adds their credit card details.
Goal: This action simplifies and speeds up the ordering process, making it more seamless for the user.
Impact: By making payment more straightforward, this reduces the likelihood of users abandoning their carts, thus enhancing the overall transaction success rate.
Shifting the focus to high-value moments changes the perspective from short-term gains to long-term engagement. Actions like saving payment information or exploring a new product category can significantly affect customer retention and expenditure. It's worth noting:
Scenario A generated $90,000 without any completed high-value moments.
Scenario B generated $80,000 but included 2,000 completed high-value moments, each potentially adding $20 in value over the next three months, totaling $120,000 in revenue.
This approach not only enhances revenue but also builds a foundation for sustained growth and customer loyalty.
Implementing High-Value Moments in Growth Strategy
Implementing high-value moments into your growth strategy is all about identifying and magnifying those pivotal interactions that resonate most with your users. But before diving into the exciting part, let's address the prerequisites, constraints, and how this strategy aligns with leadership directives.
Prerequisites
Begin with defining your goals. What should the aim of each high-value moment be, and how do we establish them? These moments should form a series that, while engaging the customer, also propel the business objective or North Star Metric forward.
Combining the North Star Metric with business objectives allows for a customized focus on high-value moments, balancing between immediate and long-term goals, and weighing revenue growth against profitability. This approach enables businesses to prioritize current initiatives, such as launching a new product or service, while considering their long-term impact.
This strategic prioritization influences how we allocate resources and measure the return on investment.
Constraints
It's crucial to comprehend the influence of high-value moments. Promoting such experiences can have a profound long-term impact, albeit possibly a lesser immediate transactional effect.
Desired Output and Execution Strategy
The goal is to identify uncompleted high-value moments for users and determine the sequence in which they should be completed. Each user will have a personalized list of high-value moments to achieve.
Here's a step-by-step approach:
Identify Key Interactions: Pinpoint essential moments in the user journey, especially those that lower entry barriers or enhance service breadth, like making a first purchase or reaching a milestone. You'll discover some moments are obvious choices.
Classify the Impact of Moments: Establish criteria to evaluate these moments by focusing on the casual impact of moments. This can involve calculating incremental revenue uplift when users complete those moments. Then filtering and ranking moments by significance and uplift magnitude.
Integrate Moments into Growth Tactics: Determine which users haven't experienced these high-value moments. Then, incorporate this data into CRM systems to promote these moments through targeted communications.
Track and Measure: Develop metrics to monitor these moments. Analyzing user responses to these moments provides valuable feedback for improvement.
Iterate and Optimize: Continuously refine these moments based on the insights gained. The objective is to progressively enhance the user experience, making these interactions more engaging and rewarding.
By strategically embedding high-value moments into your growth initiatives, you craft a pathway that not only draws in users but also fosters their long-term engagement.
Conclusion
In wrapping up, the journey through identifying essential metrics, pinpointing your North Star Metric, and leveraging high-value moments paints a comprehensive picture of a dynamic growth strategy. It's a narrative that transcends the usual focus on immediate gains, urging a deeper dive into what truly fosters long-term relationships with users.
The strategic implementation of high-value moments stands out as a cornerstone in this approach. By meticulously identifying, classifying, and integrating these moments into our growth strategy, we set the stage for a more engaged and loyal user base. This isn't just about boosting short-term metrics; it's about laying the groundwork for sustainable growth and a thriving user community.
Driving Forward
To move forward effectively, it's crucial to:
Embrace a holistic view: Understanding the full spectrum of the user journey allows us to spot and enhance those critical interactions that matter most.
Prioritize strategically: Aligning high-value moments with our North Star Metric ensures that every effort contributes meaningfully to our overarching goals.
Adopt a test-learn-optimize cycle: Continuous iteration, based on real user feedback and data, keeps our strategies fresh and effective.
The Bigger Picture
Ultimately, the integration of high-value moments into our growth strategy isn't just about improving metrics; it's about fundamentally enhancing the user experience. It's a testament to the power of focusing on what genuinely matters to our users, driving both their satisfaction and our success. This balanced approach, combining immediate actions with an eye on the future, is what will define the next wave of growth in the ever-evolving landscape of CRM and retention marketing.