It’s no secret the success of an app is heavily dependent on the user experience.
Everything from app store ranking, to onboarding, to load time can make or break a user’s experience within your app. If you’re not constantly learning and enhancing your app’s CX, user retention will plummet.
What’s the difference between user experience and customer experience?
The user experience is the encounter with the app itself — usability, navigation, learnability, and overall design. Customer experience is the umbrella that encompasses user experience. In other words, it is the overall interaction with all channels of a brand. From seeing and clicking an ad, to downloading the app, to making a purchase, and everything in between.
While the technical definitions may be different, the sentiment is the same — to deliver the best experience to anyone who interacts with your brand.
Customer experience metrics help you track the good and the bad of your app, so you can evaluate and improve how users engage with your app. Metrics like acquisition, engagement, customer satisfaction, and product performance help gauge what’s going well and what needs to be improved.
But simply tracking all these metrics isn’t enough — you have to know how to use this data effectively to make important changes and informed decisions.
That’s why we’re sharing the top metrics (and how to use them) for improving the customer experience within your app.
9 Most Actionable Metrics for Measuring Customer Experience
1. CAC & LTV
Think about Colombia Phone Numbers List everything that goes into acquiring a new user. Do you pay for ads? How big is your sales team? What is your marketing budget?
Now think about how those efforts translate into sales. Are your investments resulting in revenue?
To answer this, you first must calculate your Customer Acquisition Cost (CAC).
Your marketing and sales costs divided by the number of users is your approximate acquisition cost.
For example, let’s say a food delivery app spends $50,000 in marketing/sales in a month and had 1,000 customers order delivery from the app — their CAC would be $50.
Next, you calculate your Customer Lifetime Value (LTV).
The purpose of calculating CAC and LTV is to determine whether your marketing and sales investments are turning a profit. The ultimate goal is to decrease CAC and increase LTV.
Let’s say this same food delivery app finds most customers only convert twice before they churn and calculate their LTV to be $30. So for every $50 they’re spending on acquiring new customers, they’re losing $20. Womp womp.
In this scenario, if the food delivery app were to keep spending the same amount on acquisition, they’d go out of business.
Don’t let this scare you. Understanding CAC and LTV can give you an opportunity to increase conversions and improve retention.
A/B testing ads and learning which ones deliver a greater number of app installs with a low CPI can decrease your CAC.
Implementing different checkout flows or sending push notifications to remind your users when they added something to their cart can reduce shopping cart abandonment and increase your LTV.
2. ARPU
How much a customer is spending within your app is a pretty good indication of the customer experience.
Average Revenue Per User (ARPU) helps determine the value of your users by calculating the average amount of money each user spends within your app.
ARPU helps you track the performance of users, forecast growth, and identify which monetization models work best for your app based on the spending habits of your users.
This is not to say purchase frequency is more desirable than purchase value. For example, if User A is spending $10 every month vs. User B who is spending $200 a year, User B has a much higher ARPU than User A.
Improving your ARPU can lower CAC costs and help you anticipate the growing needs of your users. To increase your ARPU, identify ways to encourage your users to spend more within your app — such as subscription upgrades and tiered pricing plans.
3. Churn Rate
It’s inevitable that customers will come and go, but tracking churn helps identify why your users are jumping ship.
Customer churn rate is calculated by looking at the number of customers lost during a time period and dividing it by the total number of acquired customers at the beginning of that time period.
Why should you care about churn?
Because the probability (and profitability) of selling to an existing customer is a lot higher than selling to a new one. In fact, it can be anywhere from 5 to 25x more expensive to acquire a new customer than it is to keep a current one1.
Tracking this metric not only helps determine what actions and asks are leading users to churn but also which customers and segments are most valuable for your business.
4. Conversion Rate
Downloading an app is just the first step in the customer journey. What is the ultimate goal of using your app? To purchase a product or service?