How to Plan, Measure, and Analyze MVP Success
As a rule, the whole point of building a minimum viable product is to get the solution's early yet functioning version out in the world for testing idea feasibility and finding answers to fundamental questions. But what do you do once you're through the MVP development process and the product is released? You have to move on to gathering data and analyzing feedback to determine MVP success.
A product's success is measured by an array of pre-selected metrics and performance indicators. This page is dedicated to exploring various MVP success metrics to help you determine whether you're headed in the right direction.
When Do You Select MVP Success Criteria, and Why Should You Track MVP Metrics?
First things first, at which point of the project should you choose what will help you identify positive and negative results? Generally, such decisions have to be made early in the product development cycle while you're just planning the work ahead. In fact, the earlier you settle on this, the better, as it'll set the right pace for further work.
Why to Think About Ways to Measure MVP Success Beforehand
It makes sense to think through what will serve as a means for signaling whether you're going where you want right at the start of the project (instead of when you're already in the course of product development or after MVP launch). Here's why.
- Aligning the measurement criteria with your objectives and goals will ease feature prioritization and let you make a more consistent plan and product development roadmap.
- Settling on the ways you'll measure MVP success can aid with hypothesis validation and proving assumptions, allowing for a more to-the-point and targeted approach to obtaining early adopters and first customers.
- Choosing your metrics beforehand may also lead to more consistent usage of available resources and their distribution (from better-focused team efforts and prevented scope creep to enhanced communication and more optimal time and budget management).
- Selecting measurable benchmarks to evaluate your product against can also enable you to make a feedback loop, powering agile minimum viable product development with iterative subsequent improvements.
As you see, by going for an adequately considered strategy, you'll not only concentrate on "why" you want to bring the product to life and "how to do it" most optimally. You'll also figure out "what" will let you find out if you were right or wrong about the calls you've made.
As a result, properly chosen MVP success metrics will help raise your chances of achieving the desired outcomes and let you make better and more informed decisions as you progress throughout the development process. Not to mention that you may make important discoveries on other client demands, unsolved problems, or feature ideas.
MVP Success Metrics
Pretend you're constructing a building instead of a digital product. Like an engineer, you shouldn't make serious decisions by eye or based on guesswork. You'll need instruments like a bubble level or laser tape measure to get more precise data, right? Well, it's basically the same with web and software development.
What can assist you in assessing your product and learning about how to move on with it? Here's a list of the major indicators and product success criteria that can be helpful in evaluating the "dimensions" of your project and empowering you to place consequent "building blocks" more confidently.
Qualitative Sources (Client Feedback)
You can obtain lots of valuable learnings directly from your consumers. You may find out more about the level of customer satisfaction, what people like and what disappoints them, observe customer behavior, and possibly even get specific improvement suggestions.
Some of the ways to collect such information include getting feedback from:
- client reviews and testimonials;
- customer surveys with open-ended questions;
- email send-outs for opinion collecting;
- social media polls;
- focus groups.
Collecting such data is time-consuming and may be resource-intensive to analyze, too. But, on the flip side, it gives you access to first-hand information directly from your target audience. And you can always use specialized MVP tools to speed up the process.
Topping that, you may also devote time to behavior analytics. That is, observing how people interact with the product via click maps, heatmaps, session recordings, and other means.
In any event, using only client feedback isn't enough to make healthy business decisions and conclusions regarding MVP success. Yes, customer sentiment and what your clients say matters, but, at times, the data might not be unbiased. Hence, combining qualitative and quantitative data is considered one of the best practices. This way, you can get opinions from original sources together with numerical measures to be data-driven.
If we talk about quantitative or numerical data, it implies tracking metrics to measure product success. You can collect such data and monitor the dynamics by using specialized marketing tools for startup analytics.
It is worth noting that you shouldn't collect tons of data just for fun. You need to know what kind of performance indicators align with your current goals and are relevant to your objectives. Otherwise, the obtained information might not bring value or, even worse, could end up confusing and deceiving you.
Moreover, jumping to conclusions too soon is another mistake, as you might be rushing to make unnecessary changes. It is vital to take the time to study the information, look for trends and market shifts, and spot repetitive patterns or issues. A multitude of MVP examples prove just that.
What should you track to measure MVP success? Here are a few key metrics that are actionable and might be worth paying attention to:
- Number of Sign-Ups (when users are actively signing up for your product and leaving you their contact details, it signals user interest);
- Number of Downloads (likewise, if you have an application that has an impressive download rate, this may be a sign that the user interest in the product is high);
- Conversion Rate (marks how many people became active or paying customers; it can also show whether your product is resonating with the audience);
- User Engagement and Retention (metrics like daily/monthly active users or the average time spent on the platform may demonstrate how engaged your customers are and how often they interact with the product);
- Bounce Rate (if the bounce rate is high, this may suggest that users are losing interest in the product way too soon, e.g., they leave after viewing just a single page);
- Churn Rate (shows the number of lost customers or discontinued users who decided to stop using your product);
- Product Ratings (users can assess your offering or their level of satisfaction by giving it a mark or rating, and you can make conclusions based on whether the average grade is high or low);
- Net Promoter Score (NPS determines customer loyalty and whether the product meets or even exceeds client expectations based on their own rating of how likely they are to recommend the product; a high NPS is usually a positive sign of MVP success);
- Revenue Growth (examining your MVP's financial impact is also integral as no startup budget is endless; this metric measures whether there is revenue increase over time);
- Customer Acquisition Cost (CAC shows how much you're spending to get a paying client).
Which MVP Success Clues Should You Look for in Data?
All in all, studying data can give you a better understanding of MVP success. Collected insights may paint a vivid picture showing whether your product is capable of captivating and retaining attention, the depth of user interaction, and your product's chances at profitability.
However, no specific set of MVP success criteria would be universally applicable. The indicators of growth or failure will differ for each product, just as every company has its own KPIs or OKRs.
For example, the number of followers on Instagram may matter to an online retail store selling products via such social commerce platforms, whereas the same metric probably won't be as valuable for a B2C SaaS product. Bottom line: try to avoid applying vanity metrics that might look fancy but aren't actually relevant in reality.
Which data is most meaningful? Let's go over a few examples of what you can look for in your data.
- The overall number of users can be an important source of information. Yet, if most of them are one-time users, then this could mean that the product is far from perfect.
- Likewise, the retention rate lines out how many people keep using a product over time (for example, three months). If the rate is high, this implies that people find the solution valuable and might become your regular clients in the long run.
- The bounce rate can also be a cause for concern. If it's high and people leave the product too soon, it can signal a lack of engagement, issues with your solution's usability, a poor value proposition, a lack of product-market fit, and so on. As a result, you may need to rework your messaging, boost usability, or make other tweaks.
- Conducting feature flow analysis can also assist you in deciding which functionality to develop or create next. It lets you study which features clients enjoy and get value from, and this may sometimes be at odds with your assumptions and might mean you need to reconsider your priorities.
- Keeping an eye on financial metrics is also crucial. For instance, gross margin calculates the product's profitability and if you're generating enough money to cover production costs. Surely, it takes time for a product to become profitable, but if you operate at a loss for too long, this can lead to startup failure and shutting down the project.
In any case, the findings can be an indication of what to refine. Remember, though, that looking at and interpreting only one metric is wrong, as it's usually not the sole determinant of MVP success or failure.
How to Measure MVP Success in 6 Steps
As mentioned earlier, the best results are achieved when quantitative data is considered in conjunction with qualitative discoveries. It's up to you to address the issues or ignore the mismatches. However, you may definitely benefit from further MVP testing. Here are a few steps to follow.
Step 1: Finalize the main goal your product should reach.
Step 2: List the possible MVP success metrics that are measurable, relevant, and can best reflect whether you're achieving set objectives.
Step 3: Start collecting both quantitative and qualitative data.
Step 4: Analyze your findings and formulate hypotheses.
Step 5: Create and run tests (such as A/B tests) to find out whether you were right or wrong and document your results, learnings, and takeaways.
Step 6: Reassess your strategy, make corresponding changes to the product if necessary, and continue monitoring data after the iteration was made.
Final Thoughts on How to Measure Product Success
Summing up, various metrics can provide invaluable insights into the MVP success as well as what needs to be adjusted or refined. Tracking and analyzing the right data can guide those building products toward success. It can empower them to adapt their decisions, strengthen their strategy, and deliver exceptional lean solutions that have great potential.
If you need a hand with bringing your product to life, Upsilon provides full-cycle MVP development services for startups. You can count on our experienced team during all the stages, from discovery and design to development, testing, and launch. What is more, we always include Mixpanel or Amplitude integration in our quotes, as having such tools at hand is obligatory for tracking data and monitoring the product's growth. So, if you have a project in mind, don't be shy to reach out to us to discuss your ideas!