If you want to understand how your app is performing, tracking the right app KPIs (Key Performance Indicators) is essential. From downloads to in-app conversions like newsletter sign-ups or subscriptions, KPIs provide crucial insights into how your app aligns with your goals.
In this post, we’ll guide you on how to define the most appropriate KPIs for your app, and how to structure them within a framework. This approach will empower you to not only understand your app’s performance at a glance but also uncover actionable insights to fuel growth and long-term success.
What is a KPI framework?
The KPI (Key Performance Indicator) framework is an essential tool in app marketing, offering a structured way to organise and analyse your app’s KPIs. In app marketing, these indicators help evaluate different aspects of an app’s success, such as user acquisition, retention, engagement, revenue generation and overall app performance. The KPI framework helps you understand how different KPIs work together to drive growth, optimise user experience, and achieve long-term success.
Why you need a KPI framework
To get any real value from your app KPIs, you need to view them holistically; rather than in isolation. They need to be mapped into a framework that highlights the relationships between them and how they impact one another. A well-structured KPI framework offers you this consolidated, 360-degree view of performance, ensuring that all lower-level KPIs are in place to support your overriding “North Star” metric (a key metric that aligns with user value and business growth and is used to track overall success).
Let’s explore the key metrics that should be included in a well-structured KPI framework.
Breaking down the KPI framework
The KPI framework that we have developed at Yodel is built around five “level 1” (primary) metrics.
Level 1 metrics are the main indicators that show how well your app is doing overall. These metrics give you a big picture view of important areas such as user growth, engagement, retention, and their impact on your business goals. Think of these metrics as the foundation of your KPI framework. They directly connect to your app’s main objectives and your most important measure of success, the “North Star” metric.
Here’s how we break down the level 1 metrics:
- Reach (e.g. total app installs)
- Activation (e.g. the number of users who complete onboarding)
- Engagement (e.g. Daily Active Users (DAU))
- Retention (e.g. Churn Rate)
- Business-specific (e.g. Customer Lifetime Value (LTV))
Each of these level 1 metrics is supported and driven by a corresponding set of “level 2” metrics, which provide a more detailed breakdown. The level 2 metrics offer valuable insights into the specific factors driving the performance of level 1 metrics. Acting as diagnostic tools, they help to explain why level 1 metrics are performing as they are.
Let’s explain each metric in more detail.
Reach
KPIs that sit within the reach section of the framework focus on acquisition and exposure – they help measure the effectiveness of efforts to attract and engage a broader audience. Examples at level 1 could include the number of installs and web visitors, while level 2 elements could include web-to-app conversion, splitting your installs by paid, owned or earned channels to measure the effectiveness of efforts from various sources.
Activation
Activation metrics focus on a user’s initial engagement and the process of turning new users into engaged users by guiding them to experience the app’s core value early in their journey. This could be during the onboarding process, or later, as they use the app. Level 2 elements here might include specific actions such as a user registering their details or completing a required task. For example, in a language learning app, this could involve completing a quiz to set the user’s language proficiency level.
Engagement
Engagement metrics capture how actively and frequently users interact with your app and its features, shedding light on the depth of their involvement. Level 1 metrics can include Daily Active Users (DAU), Weekly Active Users (WAU), or session duration, which provide a broad understanding of user activity. At the Level 2 stage, these metrics become more specific, for example for a subscription app this could be the number of users who start a free trial, indicating early-stage engagement and their interest in the premium offering.
Retention
Retention metrics measure how effectively an app keeps users returning over time, assessing its ability to maintain a loyal and engaged user base. The Level 1 metric here could be Day 1, Day 7, Day 30 retention (the number of users still active in the app 1/7/30 days after installing it). Level 2 metrics could be feature-specific, tracking how often users return to specific features within the app (e.g., viewing content, making purchases, using premium features). For example, in a music education app, the Monthly Lesson Return Frequency could measure how often users return to complete a lesson each month.
Business-specific
A business-specific KPI is a high-level metric that reflects the unique goals and performance indicators of a particular business. These metrics are directly tied to the organisation’s strategic objectives, such as revenue growth, business health or customer acquisition, and are designed to track progress in areas critical to the business’s success. Supporting Level 2 metrics provide detailed insights into the factors influencing the performance of the Level 1 KPI, offering a clearer understanding of what drives results.
Leveraging the KPI framework to drive app growth
By breaking down the KPI framework in this way, you not only gain a clearer picture of how each element impacts overall performance but also create a roadmap for improving user acquisition, engagement, and retention.
Let’s say that you have established that you need 100,000 installs per month to reach your LTV KPI, based on the conversion rate of new users to paid subscription. If you’re falling short of this target, you can adjust your strategy by increasing your advertising budget, or analysing which channels are proving the most effective.
Regularly monitoring and adjusting your Level 1 and Level 2 metrics ensures that the app stays aligned with both user needs and business objectives. Ultimately, this approach helps refine strategies, drive growth, and work towards achieving the North Star metric, delivering long-term success for the app.
A step-by-step guide to creating a successful KPI framework
To create a successful KPI framework that will help you align your app’s goals with measurable actions, follow this four-step process.
Step 1: Define your app’s core purpose
Define what the core purpose of your app is, the real value it brings to its users. This will help in specifying the KPIs that best measure how effectively the app fulfills its purpose and delivers on its promise.
Step 2: Map the user lifecycle
Look at key points in the user lifecycle and at how they link to your business goals and objectives, in order to define the right KPIs for your app.
Step 3: Identify the right KPIs to focus on
To do this, focus on KPIs that are truly going to have an impact on the business. Don’t overwhelm yourself with too many metrics as they can obscure actionable insights. And while every KPI is important, the maturity of your app will dictate where you place most emphasis. So for a new app, a focus is often on reach aiming to achieve those initial install KPIs. For a more mature app, concentrate on optimising for retention.
Step 4: Make sure that your goals are measurable
In order to gauge the progress of each KPI, whether that’s downloads, signups, or conversion rates,, every KPI needs to be measurable to ensure that you can assess your progress against it.
And remember that the KPI itself is really no more than a goal and one that can be achieved in a number of ways. What really counts is understanding the mechanisms and the levers you can pull to achieve it. You have to drill down into the KPI and ask yourself: “What actions can I take to influence this KPI? What factors in my control will impact it the most?” If the KPI is about generating revenues, for example, the key driver might be making sure that people are subscribing, or at least committing to a free trial that leads to a subscription.
With that in mind, you can optimise the flow of the app, the onboarding process, and your comms strategy, to support this goal effectively.
How to successfully analyse your data and make informed decisions
You’ve successfully created your KPI framework – great! But the next crucial step is learning how to read You’ve successfully created your KPI framework – great! But the next crucial step is learning how to read and interpret the data effectively. Without actionable insights, even the best framework won’t help you achieve success.
Digging deeper into the data relating to your KPIs will help you to make more informed and strategic decisions. For example, you might segment your users by OS (Android or iOS), or subscription plan, such as monthly or annual. Breaking things down in this way will help you establish useful facts such as:
- iOS users are 3x more likely than Android users to convert from a free trial to
a paid subscription. - People on monthly subscriptions are twice as likely to churn as those on annual subscriptions.
- The users you acquire through paid channels show much worse retention levels than those who you acquire organically.
Once you understand these issues, you can try to address them. For example, if you discover that iOS users are more valuable than Android users (as mentioned in point 1), you can adjust your paid advertising strategy to prioritize iOS users.
Use the KPI framework to give you the big picture, then segment your data to really understand how your various KPIs are impacted to different degrees by different types of user.
Additionally, leverage this data to conduct A/B tests. For example, you might test two different paywall designs to see which drives higher conversion to a free trial.
Once you have your KPIs mapped out, platforms like Mixpanel will allow you to build a dashboard that calls out each of them. So you create charts, add them to your dashboard, and quickly identify changes. If retention, frequency of usage, or the number of purchases drop, these changes will be immediately visible allowing you to diagnose and address the issues promptly.
Turning insights into strategy
It’s really important to have a well-structured KPI framework that aligns with your business goals, that those goals are measurable, and that for each KPI, you understand the factors in your control, the levers you can pull, that will impact them.
Putting all of this in a framework is much more useful and instructive than just listing it all out in a spreadsheet. The framework allows you to see the link between different KPIs. It’s scalable, so it’s easy to add additional metrics into the mix. And it helps you to stay agile in terms of understanding how the business and the app is working and then making adjustments based on the data that you get from your KPI analysis. Think of it as a framework for success. In short, every app should have one.
