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Definition of Usage Rate
The metric known as Usage Rate or consumption rate is an important indicator that demonstrates the extent to which each customer uses a specific product. This metric is applicable in both traditional retail and online services. For example, in a store, one can calculate the average consumption rate for a category of products, such as hair clips, where it is assumed that each customer, on average, buys 4 clips at a time. When assessing overall purchasing activity, it may be discovered that one customer purchases accessories in this store, on average, 7 items at a time or 20 items per month.
In the context of digital products, the calculation of Usage Rate can be based on the number of features used by each user. For instance, in a photo editing application that offers users various functions such as adding effects, retouching, and removing backgrounds, it turns out that 80% of users open it only to crop photos. This means that only 20% of users have a high Usage Rate, highlighting the importance of this metric for analyzing customer behavior.
Why Track Usage Rate
Tracking Usage Rate allows companies to segment customers into different groups, which includes:
- Basic customers: those who use or purchase a minimal amount of the product.
- Mid-level customers: those who make purchases more regularly and in greater volume.
- Advanced customers: customers who buy a lot and often.
Each company determines which customers belong to the basic or advanced segment based on the specifics of its business. For example, for a small online school, a pro customer may be considered someone who has purchased at least one course in six months, while for a large platform with diverse offerings, such status may apply to users who have completed at least six courses in the same period.
How to Track Usage Rate
There are several methods for tracking Usage Rate, including:
- Tags: Setting up tags for different features on the website allows tracking of their popularity. This data can be collected through Google Tag Manager.
- CRM system: Stores data about customers and their purchases, allowing segmentation of customers based on the number of items purchased.
- Surveys: Useful for obtaining consumption data from those customers whose usage volumes cannot be accurately tracked.
How to Increase Usage Rate
There are several strategies that can help increase Usage Rate:
- Navigation: An intuitive interface and convenient placement of products in stores help customers navigate more easily.
- Training: Users may not be aware of all the possibilities of the product, so training and onboarding can help them understand the functionality.
- Support: Quick access to technical support increases users' confidence in using the product.
- Promotions: Special offers, such as "Buy one — get one free," can encourage customers to purchase more.
Proper application of these methods can significantly increase Usage Rate and, consequently, boost sales and customer satisfaction.