Lean Analytics

Lean Analytics is a process designed to allow startups to identify and measure key performance indicators (KPIs) in order to help them make informed decisions and optimize their business performance.

Lean analytics is rooted in the Lean Startup framework, and is based on the idea of eliminating excess and optimizing what is necessary in order to reach product-market fit. This process entails the use of KPIs (Key Performance Indicators) to measure progress and uncover areas where optimization can be done.

KPIs are metrics that measure the performance of a certain task or goal. When used in the context of lean analytics, they help startups focus on the most important numbers in their business, and identify which areas they need to tweak or change in order to reach their desired result. By using common standards and metrics to track progress, startups can streamline their decision-making process.

For instance, companies may track the number of new visitors to their website and compare it to the growth of repeat customers. This comparison might help them uncover patterns or trends related to customer behavior, which could in turn help them decide which product features or marketing messages should be prioritized. Likewise, they might analyze customer churn to understand why customers are leaving and see if there are changes that can be made in order to reduce churn.

For example, an e-commerce company might set up a goal to increase customer lifetime value. They could start by tracking the number of new visitors to their website and see how many of those visitors made purchases. From there, they could analyze customer behavior by tracking metrics like customer-retention rates, average order value, and trial usage rates. By comparing these KPIs to a customer's value over time (both new customers and existing customers) they can start to uncover patterns.

For instance, they might identify that customers who purchase at least one product in the first week are more likely to be retained over time than those customers who don't purchase anything in the first week. Armed with this knowledge, the company can start to optimize their onboarding process and incentivize customers to purchase more quickly.

Through this process, the company has used Lean Analytics to identify areas for improvement and have a better understanding of how they can achieve their desired result - increasing lifetime value of their customers. By tracking the right numbers and optimizing what matters, companies are able to maximize the value of their business.