What Are the Top 7 KPIs Metrics of a Personal Finance Coaching App Business?

Are you a personal finance coach looking to take your coaching app to the next level? Understanding the key performance indicators (KPIs) specific to your industry is vital for optimizing your app's success. In artisan marketplaces, monitoring KPIs can provide invaluable insights into customer behavior, sales trends, and overall marketplace performance. In this blog post, we will explore seven industry-specific KPIs that are essential for personal finance coaching apps in artisan marketplaces. Whether you're a small business owner or an artisan looking to maximize your app's potential, this post will offer unique insights to help you track and improve your marketplace performance metrics.

User Retention Rate

Definition

The user retention rate is a key performance indicator that measures the percentage of app users who continue to use the app over a specified period of time. This ratio is critical to measure because it reflects the app's ability to keep users engaged and satisfied with its features and content. In the business context, a high user retention rate indicates that the app is effectively meeting the needs of its users, fostering long-term relationships, and maximizing the lifetime value of each customer. It is critical to measure because a low user retention rate can lead to higher customer acquisition costs and ultimately impact the app's overall success and profitability.

How To Calculate

The user retention rate is calculated by taking the number of active users at the end of a period, subtracting the number of new users acquired during that period, and then dividing the result by the total number of users at the beginning of the period. This percentage is then multiplied by 100 to express it as a percentage.

Example

For example, if an app had 5,000 active users at the end of a month, gained 1,000 new users during that month, and had a total of 6,000 users at the beginning of the month, the user retention rate would be calculated as follows: ((5,000 - 1,000) / 6,000) * 100 = 66.67%. This means that 66.67% of the app's users were retained over the course of the month.

Benefits and Limitations

The user retention rate is beneficial because it provides insight into the app's ability to retain and engage users, which is essential for long-term success. However, it may not account for the quality of user activity and engagement, and it could potentially mask underlying issues if users are not truly satisfied with the app experience.

Industry Benchmarks

In the personal finance coaching app industry, the typical user retention rate is approximately 40-60% for the first month, and then increases to 65-80% for the three-month mark, and 70-90% for the six-month mark. Above-average performance would be in the range of 80-90% for the first month, 85-95% for the three-month mark, and 90-95% for the six-month mark.

Tips and Tricks

• Regularly analyze user behavior and feedback to identify areas for app improvement
• Offer personalized recommendations and content to keep users engaged and motivated
• Implement loyalty programs and incentives to encourage continued app usage
• Communicate with users via in-app notifications and emails to maintain a connection

Average Session Duration

Definition

The Average Session Duration KPI measures the average amount of time users spend on the personal finance coaching app during each session. This ratio is critical to measure as it provides insight into user engagement and the app's ability to retain users. In the business context, a high average session duration indicates that users find the app valuable and are actively utilizing its features. On the other hand, a low average session duration may indicate that users are not finding the app useful or engaging, which can impact user retention and overall business performance. Therefore, measuring this KPI is critical to understand how users are interacting with the app and to identify areas for improvement.

How To Calculate

To calculate the Average Session Duration, divide the total duration of all sessions by the total number of sessions. The result will provide the average amount of time users spend on the app during each session. The formula is as follows:

Example

For example, if the total duration of all sessions in a month is 1000 hours and there were 5000 sessions during the same period, the Average Session Duration would be: Average Session Duration = 1000 hours / 5000 sessions Average Session Duration = 0.2 hours per session This means that, on average, users spend 12 minutes per session on the app.

Benefits and Limitations

Measuring the Average Session Duration KPI provides insights into user engagement and the app's ability to retain users. A high average session duration indicates strong user engagement and satisfaction, leading to better user retention. However, it's essential to consider that a long session duration may not always indicate positive engagement, as users may be struggling to navigate or understand the app. Additionally, changes in app features or content may impact the average session duration, making it important to analyze this KPI in conjunction with other metrics.

Industry Benchmarks

In the US context, typical benchmarks for Average Session Duration in personal finance coaching apps can vary between 5 to 10 minutes per session for average performance, 10 to 20 minutes per session for above-average performance, and 20+ minutes per session for exceptional performance.

Tips and Tricks

• Provide engaging and relevant content to keep users on the app for longer durations.
• Enhance the app's usability and navigation to facilitate longer session durations.
• Analyze user feedback to understand why users may be spending less time on the app and make necessary improvements.

Financial Goal Completion Rate

Definition

The Financial Goal Completion Rate is a Key Performance Indicator (KPI) that measures the percentage of users who successfully achieve their financial goals with the assistance of the FiscalFit app. This ratio is critical to measure as it directly reflects the app's effectiveness in guiding users towards their financial objectives. The KPI is important in the business context as it allows the company to assess the impact of its personalized financial coaching service on user performance and satisfaction. It provides insights into the app's ability to drive positive financial behavior and outcomes, directly impacting user retention and the app's reputation.

How To Calculate

The Financial Goal Completion Rate can be calculated by taking the total number of users who have achieved their financial goals with the FiscalFit app and dividing it by the total number of users who set financial goals. The result is then multiplied by 100 to obtain the percentage.

Example

For example, if the FiscalFit app has 1,000 users who have set financial goals, and out of those, 750 users have successfully achieved their goals, the Financial Goal Completion Rate would be calculated as follows:

Financial Goal Completion Rate = (750 / 1000) x 100 = 75%

Benefits and Limitations

The main benefit of measuring the Financial Goal Completion Rate is that it provides direct insight into the app's impact on users' financial success, allowing for continuous improvement and customization of financial coaching strategies. However, a potential limitation of this KPI is that it may not account for external factors that could influence users' ability to achieve their financial goals, such as changes in income or unexpected expenses.

Industry Benchmarks

Industry benchmarks for the Financial Goal Completion Rate in the personal finance coaching app industry vary, but on average, a strong performance would be achieving a rate of 70% or higher. Exceptional performance levels for this KPI can reach upwards of 90%, reflecting a high level of user satisfaction and successful financial outcomes.

Tips and Tricks

• Regularly survey users to gain insights into their financial goal achievement progress and areas for improvement
• Analyze user feedback and behavior to tailor personalized financial coaching strategies
• Offer incentives or rewards for users who consistently achieve their financial goals

User Engagement Score

Definition

The User Engagement Score is a key performance indicator that measures the level of interaction and involvement of users with the FiscalFit personal finance coaching app. This KPI is critical to measure as it indicates how well the app is resonating with its target audience and whether users are actively utilizing its features. In the business context, a high user engagement score demonstrates that the app is effectively delivering value to its users, leading to increased retention, customer satisfaction, and ultimately, business growth. On the other hand, a low user engagement score may signal that the app needs improvements to better serve its users and remain competitive in the market.

How To Calculate

The User Engagement Score can be calculated using the formula:

In this formula, the number of active users is divided by the total number of registered users to determine the percentage of users actively engaging with the app. Multiplying the result by 100 gives the user engagement score as a percentage.

Example

For example, if FiscalFit has 5,000 registered users and 3,000 of them are actively using the app, the user engagement score would be calculated as follows:

This means that 60% of registered users are actively engaging with the app, indicating a favorable level of user involvement.

Benefits and Limitations

The main benefit of tracking the User Engagement Score is that it provides valuable insights into user behavior and satisfaction, allowing the business to make data-driven decisions to improve the app's performance and user experience. However, the limitations of this KPI lie in the fact that it does not provide detailed information about the specific actions users are taking within the app and may not capture qualitative aspects of user engagement.

Industry Benchmarks

According to industry benchmarks, a user engagement score of 50% is considered typical for mobile app engagement in the personal finance sector in the US. An above-average performance would be a user engagement score of 60%, while an exceptional performance would be 70% or higher.

Tips and Tricks

• Regularly analyze user engagement metrics to identify trends and patterns in user behavior.
• Implement features that encourage and reward user engagement, such as personalized goal tracking and milestone achievements.
• Seek feedback from users to understand their preferences and pain points, then make necessary app improvements based on their input.
• Monitor app performance and user feedback to continuously optimize the user experience and drive higher engagement.

Subscription Conversion Rate

Definition

Subscription conversion rate is a key performance indicator that measures the percentage of users who sign up for a paid subscription after utilizing the free version of the app. This KPI is critical to measure as it directly reflects the success of the app in converting users from free to paid plans, which is essential for revenue generation and long-term sustainability. By analyzing this ratio, businesses can evaluate the effectiveness of their marketing strategies, user onboarding experience, and the perceived value of the premium features offered. Ultimately, subscription conversion rate impacts the business performance by determining the app's ability to monetize its user base and achieve financial goals.

How To Calculate

The formula for calculating subscription conversion rate is the number of users who converted to a paid subscription divided by the total number of users who used the free version, multiplied by 100 to express the result as a percentage. The numerator represents the desirable outcome of subscription conversions, while the denominator encompasses the entire pool of potential conversions. By dividing the successful conversions by the total user base and multiplying it by 100, the subscription conversion rate is derived, providing a clear measure of user engagement and willingness to pay.

Example

For example, if FiscalFit has 5,000 users who have utilized the free version of the app and 500 of them have upgraded to a paid subscription, the subscription conversion rate would be calculated as follows: Subscription Conversion Rate = (500 / 5,000) x 100 = 10%. This means that 10% of the total users have converted to a paid subscription, providing valuable insight into the app's ability to monetize its user base.

Benefits and Limitations

The primary benefit of measuring subscription conversion rate is to identify the effectiveness of user acquisition and retention efforts, allowing businesses to optimize their marketing and product strategies to boost revenue. However, it's essential to note that subscription conversion rate alone does not provide insight into user satisfaction or long-term customer lifetime value. It may also be influenced by external factors such as market conditions or competitive offerings.

Industry Benchmarks

Within the personal finance coaching app industry in the US, a typical subscription conversion rate ranges from 5% to 15%, indicating that 5-15% of free users convert to paid subscriptions. Above-average performance falls within the 15% to 25% range, while exceptional performance exceeds a 25% conversion rate.

Tips and Tricks

• Offer a seamless upgrade pathway from the free version to the paid subscription, highlighting the additional benefits and value.
• Implement personalized recommendations and notifications to encourage users to subscribe based on their unique financial goals and behavior.
• Continuously iterate and test different pricing and plan options to maximize subscription conversions.

Net Promoter Score (NPS)

Definition

The Net Promoter Score (NPS) is a key performance indicator that measures the likelihood of customers to recommend a company's products or services to others. It is critical to measure this ratio as it provides insight into customer satisfaction and loyalty, which are essential components of business success. A high NPS indicates that a company has a strong customer base that is likely to promote its offerings, leading to organic growth and improved brand reputation. On the other hand, a low NPS signifies potential issues with customer satisfaction and loyalty that need to be addressed in order to maintain business performance.

How To Calculate

The NPS formula is calculated by subtracting the percentage of detractors (customers who are unlikely to recommend the company) from the percentage of promoters (customers who are highly likely to recommend the company). This yields a score that can range from -100 to +100, with higher values indicating a greater proportion of promoters compared to detractors.

Example

For example, if a company has 60% promoters and 20% detractors, the NPS would be calculated as follows: NPS = 60 - 20 = 40. This indicates a positive Net Promoter Score, suggesting that the company has a strong base of satisfied customers who are likely to recommend its products or services to others.

Benefits and Limitations

The advantage of using NPS is that it provides a simple and effective way to gauge customer satisfaction and loyalty, allowing businesses to identify areas for improvement and measure progress over time. However, a limitation of NPS is that it may not capture the full spectrum of customer sentiment, as it focuses primarily on the likelihood of recommendation without considering other aspects of the customer experience.

Industry Benchmarks

According to industry benchmarks, the typical NPS for the financial services sector in the US is around 25, with above-average performance considered to be in the range of 35-50, and exceptional performance reaching scores of 50 or higher.

Tips and Tricks

• Regularly survey customers to gather feedback and track changes in NPS over time.
• Address detractor feedback and implement improvements to increase customer satisfaction.
• Identify and reward promoters to encourage continued loyalty and advocacy for the brand.

Cost Per Acquisition (CPA)

Definition

Cost Per Acquisition (CPA) is a key performance indicator that measures the total cost incurred to acquire a new customer for a specific product or service. This ratio is critical to measure because it provides insight into the effectiveness of a company's marketing and sales efforts. By understanding the cost required to acquire a new customer, businesses can make informed decisions about their customer acquisition strategies and optimize their marketing budget allocation. Ultimately, CPA is critical to measure as it directly impacts the business's bottom line, influencing profitability and return on investment.

How To Calculate

The formula for calculating CPA is straightforward and involves dividing the total cost of customer acquisition by the number of new customers acquired within a specific period. This provides a clear and concise understanding of the cost incurred to acquire each new customer, helping businesses evaluate the efficiency of their marketing and sales efforts.

Example

For example, if a company invests $10,000 in marketing and sales efforts over a month and acquires 100 new customers during that time, the calculation of CPA would be as follows: CPA = $10,000 / 100 = $100. This means that the company incurred an average cost of $100 to acquire each new customer during that period.

Benefits and Limitations

The advantage of effectively measuring CPA is that it provides businesses with a clear understanding of the cost efficiency of their customer acquisition strategies. By identifying the cost per customer, companies can optimize their marketing budget allocation and enhance their overall profitability. However, a limitation of CPA is that it does not account for lifetime customer value, which may impact the long-term effectiveness of customer acquisition efforts.

Industry Benchmarks

According to industry benchmarks in the US, the average CPA for the personal finance coaching app sector ranges from $50 to $150. Above-average performance is typically seen at a CPA below $50, while exceptional performance is indicated by a CPA of less than $30.

Tips and Tricks

• Focus on targeted marketing efforts to improve the quality of leads and reduce CPA.
• Track and analyze the performance of different marketing channels to allocate budget effectively.
• Implement customer retention strategies to maximize lifetime customer value and offset higher CPA.