Articles
Digital Consumers and Marketing
Written by Jepson Du (Jiaping Du) 杜嘉平
The article is directly translated by Google Translate from Chinese, the English version will be improved very soon.
Index system construction methodology
table of Contents:
Significance of index system construction
What is an indicator
Ideas for Index System Construction
- Confirm core indicators KPI (refers to the North Star)
- Draw a user-centric conversion path (the path to achieve their goals)
- Dismantling core indicators - four metric dismantling mold
Significance of index system construction
With the expansion of the business scale and the increase in the amount of data, the establishment of an indicator system can help companies measure the effects of products and activities , and can monitor the overall business development.
After I failed to start a business, I often asked myself these questions:
How much return did the market investment of tens of thousands of dollars finally bring me?
I have done a lot of offline promotion activities and published a lot of public account promotion articles. Are these activities helpful to my product expansion? How much help? Which channels help the most?
Have those successfully activated users become my loyal users? How many conversions have been made?
The above problems are very easy to solve for me now: use data indicators to measure every effect I need to know, and make decisions and adjustments through these effect changes to optimize the final output goal. But in the process of starting my business, I really didn't think about these issues. This is the lack of indicator thinking.
What are indicators?
Indicators are used to measure the effects of products or activities. In my opinion, an indicator should be a measurement standard. The standard is composed of data calculations. Through data methods, a certain thing or phenomenon is quantitatively evaluated in a specified dimension.
The simplest comparison table is the counter-type indicator: click volume, play volume, and the number of unique user visits.
The indicators that require certain research are composite indicators, which are usually calculated through a variety of simple indicators. The degree of matching between the results obtained after each calculation and the effect measured is the key to indicator design : retention rate Measure users' dependence on products, user growth rate to measure product activation effect, and DAU/MAU to measure user stickiness. The design of the above indicators can well measure the effect they want to measure.
Ideas for Index System Construction
Clearly refer to North Star, design KPI
The construction of indicators must follow the main-line logic of corporate goals, so that we can make adjustments through the changes that indicators bring us to better help the company achieve the company's main-line goals. To put it plainly, the main line logic is a goal direction, which is called the " North Star Index " in the industry . This is closely related to the company's strategy. At the same time, the North Star index may change at different stages of the company's development. For example for ' hungry yet ' of the early days, the index finger of the North Star is to activate certain number of users, so long as the number of enterprises upgrade to complete the current phase of the mission. But it has occupied hungry market backcourt, refers to the North Star will become a " daily order fulfillment amount " into complete business volume from simple growth. Such indicators are based on the different strategic goals of the company at different stages.
Draw the user's core conversion path /point to the North Star goal achievement path
This step is prepared for the subsequent disassembly of indicators. Refers to the North Star in the clear indicators after , we need to sort out the core values of the user and complete the transaction process from completion date for the product ignorant to inflammation. Explore which touch points the user has generated in the entire path, and which a priori transactions the user has completed before making the final value transaction.
Let’s take NetEase Cloud Music as an example. At this stage, the North Star of NetEase Cloud Music can be set to " user total listening time " , then our subsequent indicator system establishment is to help the product increase the goal of " user total listening time " . Next, the user’s conversion process is broken down. The full-path user journey from downloading applications to listening to songs is basically the same as above, but in fact , the granularity of the entire core conversion path / pointing to the North Star goal achievement path can be made finer. After finishing the sorting out of the path, we need to build an indicator system based on this path.
Disassemble the core indicator KPI
Disassembling the core indicators is to establish the logic of the indicator system. By splitting the North Star indicators, more detailed indicators are used to measure the performance of each link that may help achieve the core indicators, and the performance of each link can be monitored through numerous indicator monitoring. Performance, in order to help operators in different links to help companies improve the performance of Northstar’s core indicators.
Dismantling core indicators KPI has San Ge commonly used industry basic model: AARRR , the whole chain is funnel-shaped, factoring type
The following is an explanation of the above three indicator disassembly models.
AARRR
AARRR model building, and the entire index users to analyze the most commonly used model, by retroactive user user on the product 5 Ge different stages of the journey the user to tap the value of the user's body. These five different stages are called AARRR , customer acquisition , activation, retention, revenue, and recommendation . It is the basic routine of the AARRR model to mine the indicators that can serve the Northstar through user contacts at different stages .
As shown in the figure below, at each stage of the user experience, there will be some indicators worth digging, and the combined indicators can be used for construction.
In-acquisition stage, the focus of our concern is the attractiveness of the product, to solve the problem is how to attract more customers to understand and to download, so different channels of the number-acquisition, click on the costs of different channels, different channels-acquisition costs, The usage rate of opening the APP can be used as a split indicator that may help to guide the North Star indicator.
In the activation phase, we are more concerned about whether the user is willing to become a user of the product after downloading the application or contacting the product, and how to prompt the user to complete the activation. Then the number of logins, the number of subscriptions, and the number of services used are also the split indicators that can be used to measure the Northstar indicator.
In the retention stage, we must pay attention to the degree of reliance of activated users on the product. The problem that needs to be solved is how to keep users on the product as much as possible and increase their user stickiness. Then Recency (the time since the last use of the product), DAU , MAU , DAU/MAU , access frequency, and churn rate are indicators that can help us monitor the degree of user dependence on the product.
At the Revenue stage, we must focus on getting value from users. At this stage, we will put money very seriously, CLV (user lifetime value), purchase conversion rate, shopping gap, average purchase value , ARPU (average user income ), these indicators of money are particularly important.
The last stage is the recommendation (self-propagation) stage. In the recommendation stage, we are most concerned about how many new users an old user can bring to us. Therefore, at this stage, we are mainly concerned with the number of referrals, such as the number of invitations sent, NPS score (that is, the questionnaire that we are often surveyed " Will you recommend to your friends " ) through these indicators, we can see how old you are. User’s willingness to recommend .
Through the AARRR model, we can clearly see that the entire indicator disassembly system basically follows our second user journey . In different stages of user electric shock, we can disassemble different values that are valuable for the current stage. Refine the indicators, and finally screen and reorganize the refined indicators according to the North Star to get our final indicator system.
Full link funnel type
" Full link " refers to the method of tracing the subdivision indicators that constitute the guide star indicators , and finally combining the subdivision indicators into links. It is more abstract to say here . Let us still take cloud music as an example . If we use the total listening time as the North Star indicator, then we need to explore how the overall listening time can be calculated and transformed by other indicators.
Finally, we can get the subdivision indicator calculation method of the total listening time shown in the figure above . Total listening time = APP downloads * percentage of first visit * percentage of first listening * percentage of continuous listening * average listening time. Then go to disassemble each component in the formula, and use the detected landing data to calculate each indicator.
Through the full-link funnel model, we can find the subdivision indicators that directly affect the index of the North Star , and each indicator can make a very clear contribution to the index of the North Star. However, this model has strong limitations, that is, it is difficult for us to find the subdivision factors that can obtain the North Star indicators from a global perspective . The use of this model requires a clear understanding of the overall business and finds that it can be directly passed The factors are multiplied to obtain the factors of the North Star index, and the calculation indicators of the factors can be disassembled , and every factor that may affect the North Star index and its subdivision indicators cannot be discarded .
Factorized
In fact, the factorization model is also a disassembly method for the North Star indicator. Its splitting logic is easier than the full-link funnel model , and there is no need to find a complete chain to express the North Star. The factor analysis type only needs to perform the first-level split for the North Star indicator, then the second-level splitting for the first-level splitting index, and then the third-level splitting for the second-level splitting index, until the indicator can no longer be data Segmentation can be achieved directly through data acquisition, and index acquisition.
As shown in the following figure: Simple splitting is carried out through the guide star indicators, and then the lower indicators are split layer by layer, and finally an overall indicator system is obtained to monitor the North Star indicators.
The full-chain funnel model and factorization model can not only find the influence factors of the North Star index, but also determine the value of the index and express it with a simplified formula, which can help you find opportunities and make simple calculations .
However, it is important to note that the above three methods can only be used as a divergence index system for your reference. In actual combat , the construction of the indicator system is actually a very large project. Often the construction of the entire system will go through three levels: " strategic layer"- " business layer " -" executive layer " . The significance of the strategic layer is to formulate overall Northstar indicators (that is, first-level indicators) , while the business layer splits out subdivision indicators that can be measured by business processes and exist in business processes based on the Northstar indicators of the strategic layer . For example, if the first level indicator of a game company is game revenue, the second level indicator can be set as the revenue of different game items. The primary indicator is DAU , then the secondary indicator is set to the DAU of the sub-server . In this way, when there is a problem with the primary indicator, we can quickly find the point of the problem (secondary indicator) .
The third-level index, that is, the executive- level index, is a disassembly of the path of the second-level index and is used to locate the problem of the second-level index. The use of three-level indicators is usually the content of indicators that can guide frontline personnel to carry out their work. The requirements for the third-level indicators are: first-line personnel can quickly make corresponding actions after seeing the indicators, and implement corresponding programs to improve the performance of the second-level indicators, thereby improving the North Star indicators . To sum up, the third-level indicators will provide guidance for the execution behavior (operational behavior), the third-level indicators are derived from the second-level indicators, and the second-level indicators can locate the problems of the first-level indicators .
Reference:
http://www.woshipm.com/pd/3698466.html
http://www.woshipm.com/data-analysis/4128130.html