15 key performance indicators for a web application

1. Churn Rate (User Churn Rate)

Definition: The churn rate measures the percentage of users who have stopped using the app over a given period. It is a key metric for subscription-based apps and SaaS.

Example:

• Netflix: The company analyses its churn rate to predict subscriber attrition and implement strategies to retain subscribers, such as exclusive content or personalised recommendations.
• Spotify: It offers free Premium trials to reduce the churn rate and retain users.

How can you lower it?

• Better user segmentation and content personalisation.
• A system of reminders about the app’s features.
• Improving the user experience and eliminating problematic errors.

2. Retention Rate

Definition: The retention rate indicates how many users return to the app after a specified period (e.g. 7, 30 or 90 days).

Example:

• Duolingo: The app sends push notifications reminding users of their lessons to encourage them to use it regularly.
• Snapchat: Retention is boosted by the ‘Snap Streaks’ feature, which rewards daily use of the app.

How can we improve staff retention?

• Gamification and rewards for regular use.
• Push notifications tailored to the user’s activity.
• Regular app updates introducing new features.

3. Daily Active Users (DAU) and Monthly Active Users (MAU)

Definition: DAU refers to the number of active users per day, whilst MAU refers to the number per month. The DAU/MAU ratio indicates the level of engagement.

Example:

• Facebook: It regularly monitors DAU/MAU to determine how often users return to the platform.
• TikTok: It is optimising its recommendation algorithm to encourage users to return to the app every day.

How can you increase DAU/MAU?

• Posting engaging content on a regular basis.
• Personalising notifications and interactions.
• Features to make it easier to share content with friends.

4. Average Session Duration

Definition: Measures how long the average user spends using the app during a single session.

Example:

• YouTube: Automatically plays the next video to extend the session time.
• Instagram: Increases the average session duration by introducing Reels and Stories.

How can I extend the session time?

• Offering personalised content.
• Introduction of the autoplay and infinite scrolling features.
• Intuitive navigation, so that the user doesn’t have to leave the app.

5. Customer Lifetime Value (CLV)

Definition: CLV represents the total financial value that a user generates for a company over the entire period during which they use the app.

Formula:

Example:

• Amazon Prime: Offers a subscription service to maximise CLV through customer loyalty.
• Netflix: It is investing in exclusive content to increase customer retention.

How can you increase CLV?

• Personalisation of offers and promotions.
• Loyalty schemes.
• Improving customer service and the app’s user experience.

6. Cost Per Acquisition (CPA) – Cost of acquiring a user

Example:

• Uber: The company invests heavily in social media advertising campaigns and referral bonuses. It then divides the total amount spent by the number of new users to work out how much it cost to acquire a single passenger or driver.
• Revolut: Encourages users to download the app through referral schemes offering cash rewards; it then calculates the total number of new sign-ups against the promotional costs incurred.

How can you lower it?

• Optimisation of marketing campaigns (better ad targeting).
• The use of word-of-mouth marketing and referral schemes.
• Testing different advertising channels and investing in those with the highest effectiveness.
• Boosting positive reviews and ratings on app stores.

7. Conversion Rate – The percentage of users who carry out the desired action

Example:

• Netflix: The desired outcome is for users to take out a subscription after completing the free trial. The company tracks the number of people who switch to a paid subscription after the free trial, relative to the total number of people who took part in the trial.
• Allegro: It tracks how many users actually make a purchase after visiting a product page, enabling it to assess the effectiveness of the interface and product descriptions.

How can I increase it?

• Improving the checkout process (fewer steps required to complete a transaction).
• Personalised recommendations (e.g. based on browsing and purchase history).
• A/B testing of various elements of the app (e.g. the ‘Buy Now’ button in a different position or of a different size).
• A clear and attractive offer for users.

8. Bounce Rate – The percentage of users who leave the app after a short time

Example:

• Onet (news app): If a user opens the app but closes it after 2–3 seconds without reading any articles, this results in a higher bounce rate.
• An online shop in the form of an app: If a user quickly leaves it – for example, because of a layout that is difficult to read, adverts or long loading times – this results in a high bounce rate.

How can you lower it?

• Reducing application loading times (code and resource optimisation).
• Improving the first impression (clear onboarding, user-friendly interface).
• Get rid of those annoying adverts right from the start.
• Delivering relevant content right from the home screen.

9. Net Promoter Score (NPS) – A measure of user loyalty

Formula:

1. Users answer the question: ‘How likely are you to recommend our app to a friend?’ on a scale of 0 to 10.
2. We categorise users as follows:
   • Supervisors (9–10)
   • Passive (7–8)
   • Critics (0–6)
3. NPS = (% of Promoters) – (% of Detractors)

Example:

• Apple: It regularly measures the NPS by asking iPhone and iPad users how likely they are to recommend the product to others. A high NPS indicates loyal customers who are keen to share positive feedback.
• Online banking (e.g. mBank): Based on the feedback provided in the app, it calculates the percentage of people who actively recommend its services, compared to those who advise against them.

How can it be improved?

• Systematic collection of feedback and a swift response to customers’ comments.
• Improving the features that users want most.
• Developing loyalty schemes and referral bonuses for the app.
• Open and transparent communication of changes to the app (changelog, newsletters).

10. App Store Conversion Rate – The effectiveness of an app’s page in the App Store

Formula:

App Store Conversion Rate = Number of app installations from its page in the store / Number of app page views × 100%App Store Conversion Rate = Number of app page views / Number of app installations from its page in the App Store × 100%

Example:

• Mobile game (e.g. ‘Candy Crush’): It analyses how many people who visited the game’s page on the App Store or Google Play actually downloaded it. Optimising the graphics, description and reviews helps to increase the conversion rate.
• Finance apps (e.g. Revolut): Thanks to eye-catching screenshots and high ratings in the app store, they persuade users to download them more quickly.

How can I increase it?

• Well-designed, eye-catching app icons and screenshots.
• Clear descriptions of features, including a focus on the key benefits.
• Positive reviews and a high average rating on the shop.
• Frequent updates to show that the app is constantly being developed.

11. Time to First Purchase – Time to first purchase

Example:

• Allegro: It measures the time elapsed between registration and the completion of the first transaction, to check whether new features (e.g. welcome vouchers) encourage customers to make a purchase more quickly.
• Booking.com: It tracks how long a user spends browsing offers in the app before making a booking – with this information, it can better target offers on specific days.

How can I shorten it?

• Offering vouchers or discounts on a first purchase.
• Clear and straightforward instructions on how to make a payment and complete the transaction.
• Reminders and push notifications for users who take a long time to make a purchase.
• The use of recommendations based on users’ interests.

12. Feature Adoption Rate – How quickly users adopt new features

Example:

• Facebook: When ‘Stories’ were launched, the number of users who started creating and viewing them within a specific timeframe following the update was measured.
• LinkedIn: Following the introduction of the new ‘Skills’ section, the platform looked into how many people were filling it in and how quickly they were taking that step.

How can I increase it?

• Clear communication about the new feature (in-app pop-ups, email notifications).
• Providing access to guides and video tutorials.
• Making it easier to access new features (e.g. a shortcut on the home screen).
• Incentives to use the service (e.g. bonuses, loyalty points, free trials).

13. Load Time – How quickly does the app load?

Formula:

• Load time is usually measured in seconds, from the moment the application (or screen) is launched until it becomes fully interactive.
• For subsequent screens: the time taken to move to the next screen or action within the app.

Example:

• TikTok: Users expect to be able to switch between videos quickly. When there are delays, there is an increased risk that the user will stop using the app.
• Mobile banking (e.g. PKO BP): The app must display the balance and transaction history quickly – if it takes too long, users lose trust and patience.

How can I shorten it?

• Resource optimisation (image compression, script minimisation).
• The use of caching technology (storing the most important data locally).
• Regular code refactoring (removing unnecessary libraries and dependencies).
• Efficient data management via APIs (asynchronous loading, pagination).

14. Customer Support Response Time – Customer support response time

Example:

• Amazon: It is renowned for its prompt customer support; if a user reports a problem, a response usually arrives within a dozen or so minutes – or even sooner – via live chat.
• Bolt (formerly Taxify): Ensures that drivers and passengers receive immediate responses to any issues relating to their journeys, thereby boosting confidence in the service.

How can I reduce it (speed up the response)?

• Implementation of chatbots and automation of responses to frequently asked questions.
• A well-organised support team working across different time zones.
• A system for prioritising requests (e.g. Premium users are dealt with first).
• Regular training for customer service staff and a clear division of responsibilities.

15. Retention Rate – User retention rate

Formula:

Retention Rate = Number of active users after a specified period (e.g. after 7 or 30 days)Total number of new users in a given period × 100%Retention Rate = Total number of new users in a given period / Number of active users after a specified period (e.g. after 7 or 30 days) × 100%

In practice, it can be calculated over a number of time periods, e.g. 1 day, 7 days or 30 days after installation.

Example:

• Slack: Measures how many new team members (workspace) are still actively using the app after 30 days. This enables them to implement improvements to the onboarding process in order to retain as many customers as possible.
• Dropbox: After registration, it checks whether the user regularly uploads files to the cloud in order to assess whether they are using the tools effectively and remain active.

How can it be improved?

• Introduce an effective onboarding process (guides, notifications setting out the first steps).
• Ensure you send regular (but not intrusive) push notifications to encourage users to reopen the app.
• Develop features that make everyday use easier (e.g. automatic data synchronisation).
• Introduce gamification mechanisms (badges, rewards for activity) – these often encourage users to return.