Rachel Frenkel BenHanoch, Director of Product Operations at AppsFlyer, gave this presentation at the Product Operations Summit in London in 2023.

I want to tell you about how we aligned all departments around a single KPI, which is product adoption. 

But first, I want to start by telling you what I hate about supermarkets. One day, I was strolling through the aisles of the local supermarket with my checklist of items that I needed to bring home. I had a very clear goal in my mind. I had to check all the items on the list and get back home on time to put my kids to bed. 

I was strolling along, putting more items in my cart, and the cart became heavier and heavier to push until it completely stopped. I had to finish and go home, and I was looking at the cart until I realized that the wheels weren’t aligned. I was trying to pull and push but it wouldn't go anywhere. 

At that moment, I understood that my goal wasn’t going to be achieved. I wasn’t going to get home with all the groceries on time. So I just left the grocery cart there, rushed home, and was very frustrated. 

But on my way home, I realized that that's a theme I need to take with me. If the wheels aren’t aligned, we're not going to achieve our goals. That's a theme I need to take with me to my business life as well. 

Reaching business goals with one global KPI 

Sometimes, different departments aren’t looking in the same direction. They're not aligning. They're not working towards the same goal. 

Every department wants their ARR up and more customers to come, but, for example, if your product department is building your product for middle-sized companies in South America, your marketing department is advertising to residents of Europe, and your sales department is only answering inquiries from enterprises in North America, each one of them is trying to optimize getting more customers to your company and acquire more customers. 

But they're not going to succeed. 

They're not going to succeed because they don't support each other because they're not aligned. 

Local department KPIs don't bring local results. They bring no results. 

One of our jobs as far as operations is trying to make this alignment work. We always want to be looking in the same direction, and my suggestion is to work using one global KPI that all departments try to align with accordingly to reach our goal. 

Marketing optimization with AppsFlyer

I've been the Director of Product Management for AppsFlyer for a year and a half, and I've been in product management for over 20 years in many different industries.

AppsFlyer is a global company. We have 20 global offices worldwide and about 1,500 employees. We're a leader in marketing optimization. We have a growing ARR of over $350 million a year and over 100,000 applications that are using our SDK. They’re using it to optimize their marketing campaigns. 

Most companies today have an app, and if your app runs on iOS, Android, CTV, or even on a console machine, you can measure the effectiveness of your campaigns. 

Marketers advertise on different platforms, and they don't want to throw money away. They want to know that their campaigns are ROI positive, they have to measure and they need to understand which platforms perform best, which audiences, which creatives, etc. They need to measure it and follow it closely, and this is what AppsFlyer is doing for them pretty successfully. 

You can imagine that with the size of our company and having 20 offices worldwide, it's not easy to align the departments. But this is exactly what we did. 

Measure the value customers find in your product

We all use many different terms for business goals. I went and asked ChatGPT to define terms like, ‘What is an OKR? And, ‘What is a North Star?’ The answers were pretty similar. So then I asked, ‘What's the difference between OKRs and North Star?’ And then I got a third answer. 

So I’ve tried to make sense of them and give you my suggestions for definitions of these terms. And when you align teams on the language of the terms, it's the first step towards aligning on the goals. 

There's supposed to be a very intuitive business goal. The high-level objective is strategic, it’s long-term, it's qualitative, it’s where the company wants to be and what it wants to become.

For example, we want to be a market leader in North America. That's a strategic goal. You don't know when you'll become one, but this is what you want to be. But to become that market leader in North America, you want to have something that you can measure to see if you're on track. 

You use specific metrics that allow the company to measure and assess the progress, and the numbers need to go up or down depending on what it is. You want to see that you're on track to achieve your goals. 

If you want to be a market leader in North America, you want to count the number of customers in North America and you want to see if the number grows. 

But that's not enough. It’s all about the right pace. Is it what we expected? Is that pace going to help us achieve our business goal?

And then you introduce a third term, which is OKRs. These are the midterm goals of your company. You have quarterly or yearly objectives with measurable key results so you know what it means to be successful and what it means to be at the right pace to get to your business goal. 

Is that everything that we need to know about getting to our goals? No. Why not? Because we only looked at the perspective of the business. We need to look at the perspective of our customers and what they see in our products because the magic happens when customers find value in our products. It doesn't happen when we try to achieve something but nobody wants to bite. 

I want to introduce you to the North Star. There’s a specific definition of the North Star that I really like; it’s a metric that measures the amount of value we deliver to our customers. 

A lot of people do try to measure the value that they bring to the customers, but they try to measure it in ways that aren’t accurate enough. 

They try to measure net promoter score (NPS), which is an indication of the value of the customers finding your product because if they're saying they're happy with the product, they're probably happy. But that's not always the truth. Sometimes they say one thing and do another thing, so it's not objective enough to measure NPS. 

You also sometimes measure renewals, which is again an indication. If your customer renews their contract, it means that they're happy.

I want to suggest another metric which I think is the most objective one to measure the happiness of your customers and create that magic. But before we do that, why do we even care that our customers find value in our products? 

It's very simple. If customers find value in our products, they become loyal customers. Loyal customers pay us and stay with us, and our ARR grows, or at least stays the same and we don't have churn from our product. 

But it's even more than that because customers who are happy with our products not only renew their contracts, but they're also more open to upgrades or upsells. Because they’re happy, they love to hear what else you have to offer them. 

Not only are they renewing and open to upsells, but they're also open for expansion, like adding more users from their company to your product. They're also going to speak highly of you when they speak about you to their colleagues and friends, and that’ll pull more customers into your company. 

This is why it’s so important to measure the value that customers find in your product. 

The ultimate North Star - product adoption

The ultimate way of measuring the happiness or the value that customers find in our product is product adoption. Sometimes people think that product adoption is only for product managers, but it's not. It's for the whole organization, and I'll explain why. 

So first of all, what is product adoption? Product adoption is how deeply your customers are using your product. 

Deep doesn't mean the number of visits or number of sessions. It's, which features are they using? How often are they using these features? Do they save? Do they come back to their work? Do they share? Do they interact with your teams to understand better? Do they interact with your CS to understand better? Do they use those complex features that you know aren’t for beginners? How deeply are your customers using your product? 

That's product adoption.

To make product adoption successful and ensure it’s adopted deeply by our customers, we can only do it on the product side. We have to have at least all these departments aligned toward making product adoption higher. 

We have to have the product management team create value for our customers. We have to have the marketing team educate the market about the values that they can find in our product. We have to have the CS team tailor the features and the capabilities and train the customers on how to utilize the product to get the most out of it. 

This means that at least three departments are tracking and optimizing their actions towards making product adoption higher, and that will flow more dollars into our company. 

You need to follow two steps. One is measure, and then you need to try and make it better. 

Now I’ll explain how we actually measured product adoption. It was an amazing project and the success was way above our expectations. 

How AppsFlyer measures product adoption

To explain how we measured, I want to introduce you to two terms. 

One is the activity score. In the product optimization platform of AppsFlyer, we have 15 different products. I asked the 15 different product teams to sit their product managers down with their business analysts, define what type of engagements and actions users have with their product, and create a weighted score using those signals of usage. 

For example, you take into account the increase or decrease of activity, the type of actions they perform, or if they save and share and reuse, etc. Each one of them has a different weight in what the activity looks like, and they ensured that the customers who were using it the best were getting the highest score. 

We could just use the activity score to measure product adoption, but that's a bit complicated because it's too granular. For example, what's the difference between 0.68 And 0.71? You don't know if it's a little bit better or much better because it's really hard to understand. 

So, we took this activity score and cut it into three levels of adoption which was very simple to understand. We cut it into no, low, and high. For example, in the range of zero to one we cut it into no, low, and high. That's one of the products that was cut on those values. 

It wasn't the same for each of the products. They decided what meant no, what was low, and what was high. But one thing that was important to all our products to create was the high score, the activity score, which is when the product adoption is correlated at a higher level (and that's very important) to an 80% chance of renewal. 

We went back to our data and we correlated the 80% chance of renewal of our contract with the product adoption high score. 

If you manage to move customers from being no adopters to low adopters, and from low adopters to high adopters, then you secure their renewal. This is already something that not only the product team wants, but also CS, marketing, sales, and the business overall. 

For one of those 15 products in our platform, we have the adoption trend, which is pretty straightforward. You look at the number of accounts that are no, low, and high, and you want to see the numbers grow. 

We have a premium product that not all of our customer base has, which is why the numbers for it are low. We can also see no usage going up, and we need to see if these are new customers who’ve just purchased to get them higher and higher. 

Product is looking at that trend because it shows them how much their product is being adopted. 

We also look at a range of dates. We look at the start date and the end date of the cohort of our customers, customers who were with us at the beginning of the period, and what level of adoption they were at. And looking at these same customers, what level of adoption they're at at the end of that period. It could be a month, it could be a quarter, it could be a year. 

A certain number of customers moved from high to low, and others moved from low to high. So you want to learn from it and you want to act on it because if they move from low to high, what’s the reason? What value did they find in it? How can the marketing team re-educate and send messages of this value that other customers found so that other customers will also move from low to high? 

And if we see those customers that move from high to low, the CS team can step in and ask them, “Dear customer, what happened? Why did you lower your amount or the depth of using our product? What’s wrong? Can we help you?”

So you see that the marketing team and the CS team act on it, and sales can also do the same and say, “We have new customers who move directly from low to high. If you’re like these customers, maybe this product is something you want because we see that adoption grows so fast.” 

This can be clicked through and you can see the actual accounts, get the names, and act on them as you wish. 

Another view of the same data, which is amazing for product marketing, is all based on the same date of adoption. 

For example, we have adoption status by tier, and our product marketing team is looking at it and saying, “This product can get to a potential 70% high adoption. We see that tiers zero and one are adopting it at that high level. It means that the customers in lower tiers don't understand the value as much as the higher tiers, so let's educate them.” 

So, the marketing team is taking this cohort of customers who are already using the product and tailoring education and marketing materials to uncover the value that others find because they know that there's potential there. They know that it’ll be beneficial to target these customers. 

The same goes with every aspect of cutting the information by the size of the company or by industry. You can see the potential and you can act on the potential to grow the adoption.

The next one is for the CSM. You can look at the adoption level of each product for each account. For the adoption level, we say that no is zero, low is one, and high is two. The CSM can log in and compare their account to other customers and identify if there's a potential to try and convince this customer that they can grow higher and find more value. 

It's important to understand that it's for the customers because we see that customers like them find more value in this product, so they probably want to find that value in the products as well. 

We’ve talked about product, CS, and product marketing, and now we want to talk about the whole business and what they can do with this information. 

We created a global company health score based on product adoption. We actually averaged the product adoption score for an account over all the accounts. 

For all our customers, we summarized the score of adoption per account, and we tracked this single KPI to see the health of our company as a whole. The higher this number grows, the deeper our customers use our product, and the safer it is for our business. 

It's amazing how powerful this one KPI is for the business, and it's all based on product adoption.

How to improve your product adoption rates

Now that we've measured it all and we know where we are, how do we act on it? 

Let's improve it. 

As I said earlier, we have to have all the roles aligned, and we have to have all of our departments working together towards improving product adoption. And this is exactly what we did. 

We had a team composed of CS, product, and marketing who embraced this journey of encouraging the growth of product adoption. Product built the frameworks and the value, CS created hit lists of all the customers that we wanted to take and bring higher in adoption, and marketing created very specific materials and collateral because we knew which customers we were targeting, and we knew what their product adoption state was.

And then the magic happened. We started those meetings with our customers, we brought the collateral, we exposed the value that they couldn't find on their own in the product, and the activity score rose by 69%. This is an enormous number compared to other accounts (which we didn’t approach with this campaign), which was only higher by 3%. 

This is amazing, but it's not only the activity score - we also want to see the adoption level. 

The adoption level increased by 28%, and the share of high adopters, which is the 80% safety zone of renewing our contract, grew by 33%. 

We even had an impact that wasn’t expected - because the CS team got some great materials and set the meetings with customers, they became more proficient in understanding the value this product brings and explaining this value to customers, which resulted in a market penetration that grew immensely across all industries. 

This all happened because the CS teams were now much better at educating their customers about the value of this product. They could also sell it better to their existing customers who didn’t have that particular product before. That was a ripple effect that we didn't expect; the product will now sell better because CS can explain it better to their customers. 

How to convince your teams to align on product adoption

One of our CS directors said it best: “This adoption campaign will go down in the history of AppsFlyer. This is the first time so many teams have come together to do something so meaningful.“

I want you to take this to your company, and when you take it to your company, you need to convince your teams to align around these goals or align around product adoption as a central metric that they all want to work towards and improve. 

Here are some tips on how to talk to each department and let them know what's in it for them.

When you speak with a product management team, you tell them, “Guys, this is how you're being measured. You're not being measured by the number of features or the number of specs you're writing, you're being measured by the product adoption, which is the value that your customers find in your product.” 

Not only that, but you can use it as an incremental way of checking the value of your new features. When you release a new feature, if you're not sure how valuable it is to your customers, you check the data, you check the difference between how well the product was adopted before and how well the product is adopted now, and the impact that this feature has had on your product. 

It's amazing for you to understand the value provided in this new feature, and it's in the product team’s interest to use the product adoption metric. 

Then you go to your customer success team, and you tell them, “Guys, you need retention, right? Retention is keeping your customers, so if I give you the tools to know which customers you need to approach, with what type of product, and how you create the value or expose the value in this product to your customers and bring them to the safety zone of high adoption, then you're safe.

“It allows you to know which customers you need to address and which customers are already saved. So you optimize your time with your customers, which is great for them, and you can act on time.” 

Often, CS teams just see the churn. What can they do after the customer churned? But this is a metric that allows them to see the trend and they can see that their customer is now moving from high to low, and maybe even from low to no. That's a churn risk that they can act on before the churn happens. 

Thirdly, product marketing wants to ensure that they make an impact and that their campaigns are successful. With this tool, we tell them which audiences need what, and what messages to provide to them with a comparison of the potential. Then they can create perfect materials that make an impact and measure that impact because after the campaign runs, they can see how the adoption grew, and that's validating their value to the company. 

Last is management. The global health score is one KPI that indicates the value that customers find in the product, which brings us to the safe zone of renewals. Another thing that product managers like less but management like more is a unified KPI for the product organization. 

With 15 different products in different stages of maturity, it's really hard to compare the value that each product adds to the blend. But with this KPI, you put them all on one scale of product adoption, and you can compare the value that each product in your platform brings to the business. 

Key takeaways

To sum up, first of all, you want to follow the North Star. You want to ensure that you know the depth of value that you bring to your customers because that's a very strong indication of the success of your business. 

The ultimate way to measure the North Star and the value is product adoption. And if you make sure that your teams are aligned towards pushing and acting on the same KPI, then you're much more likely to meet your business goals.