Just because an innovative technology or feature shows great promise, it doesn’t necessarily translate into greater profits. For example, studies show “while 87% of companies have integrated AI into their application development processes, a staggering 70% of these projects fail to deliver meaningful business value.” 

The gap between technical execution and commercial success is a significant conundrum for product teams. In some cases, engineers are too invested in their projects to see them from a customer’s perspective. Luckily, product managers and CTOs use special business metrics to shed light on consumer sentiments.  

Since a software project is only as successful as the value it delivers to a company’s bottom line, business metrics like return on investment (ROI) and feature adoption rate are essential. 

Difference Between SDLC & Business Metrics 

Back-of-the-house engineering teams and front-of-the-house product management teams use different metrics to measure success. The process of building a new car makes a great example. SDLC metrics measure the process of building the car, while business metrics measure if the car actually gets the driver where they want to go—and if they enjoyed the ride.

Distinctions between SDLC metrics and business metrics separate internal tactics from external strategy. SDLC metrics center on efficiency and quality by asking technical questions related to functionality. Business metrics prioritize value and impact by asking strategic questions related to consumer impact and profitability. 

Gauging User Adoption & Sentiment   

It might be hard for developers to grasp, but a bug-free product is still considered failure if it provides no business value. To ensure this doesn’t happen, companies employ metrics that account for the “human factor” when features or products hit the market. 

Feature Adoption Rate  

The feature adoption rate metric,“measures the usage of a software product’s specific features. The more features a user adopts, the more value they receive, and the less likely they are to abandon the product.” High adoption is the ultimate defense against churn. When users integrate multiple features into their daily workflows, the cost to switch to a competitor becomes prohibitive. 

Consider a platform that launches a new AI-powered analytics dashboard. If 75% of monthly users engage with the tool within the first 30 days, the adoption rate indicates high perceived value. However, if only 5% of users discover the feature, the investment hasn’t yet translated into user retention.

Customer Satisfaction Scores 

In today’s digital-first market, customer satisfaction is more than a sentiment; it’s a critical performance indicator. Luckily, there are metrics you can use to gauge how happy customers are with your brand: 

Customer Satisfaction Score (CSAT): Measures customer satisfaction with touchpoints like surveys and support calls. These questions provide a quantifiable snapshot of how well your product is working for consumers. A common CSAT approach asks users to rate experiences from 1 to 5. 

Net Promoter Score (NPS): Tracks long-term brand loyalty and growth potential. Companies often use the question “on a scale of 1 to 10, how likely are you to recommend our product?” In the SaaS industry, an NPS score greater than 36 is good, above 50 is excellent, and above 80 is world-class.

Customer Effort Score (CES): Measures friction by asking customers how easy it is to accomplish goals with websites and apps. According to a recent Adobe study, “70% of customers believe it is important for organizations to provide a cohesive and seamless experience across all touchpoints.” By identifying bottlenecks like misaligned logins, CES makes it easier to please users and boost retention. 

Task Success Rate 

Task Success Rate (TSR) is the ultimate efficiency metric for internal enterprise tools and features. TSR measures the percentage of users who correctly complete a specific goal, such as filing an expense report. To calculate TSR, you simply take the number of times a user successfully finished a task and divide it by the total number of times tried. 

If a legacy system has a 65% success rate due to a complex UI, and a new solution raises it to 98%, the business recovers hundreds of wasted labor hours. By comparing these percentages, you can quantify exactly how much friction has been removed. In this scenario, a high TSR shows the new solution raises the success rate by 33%. 

Measuring Commercial Value    

While user adoption and sentiment are important for gauging success, they still mean very little if the product isn’t profitable. Since commercial value metrics focus on the bottom line, they are particularly important for CTOs, CFOs, product managers, and investors. 

Time to Value (TTV) 

Time to Value (TTV) measures the gap between a customer’s initial purchase and the moment they realize the actual benefits of your product or feature. In short, the quicker your product solves a user’s problem, the higher the satisfaction and the greater the profit. Speed to results is the ultimate driver of customer success.

Consider a new CRM implementation with a product like HubSpot or Salesforce. If the client spends 6 months on data migration and training before the sales team can actually close a lead, the TTV is 180 days, resulting in a 6-month cash drain. However, if the CRM provider offers a streamlined onboarding process that allows the same sales team to close a deal within 30 days, the TTV presents a much more attractive CRM option. 

Customer Lifetime Value (CLV) 

Customer Lifetime Value (CLV) represents the total revenue a business can expect from a single customer account throughout their business relationship. Instead of looking at a one-time purchase, CLV focuses on long-term profitability and the financial benefits of retaining customers, as opposed to acquiring new ones. 

An example would be an eCommerce automation tool with a $100 monthly subscription. If an average customer stays for 24 months, their CLV is $2,400. However, if a new customer success initiative increases retention to 36 months, the CLV climbs to $3,600. This is a 50% increase in revenue from the same customer. 

Return on Investment (ROI)   

According to the Harvard School of Business, “return on investment (ROI) is a metric used to denote how much profit has been generated from an investment that’s been made.” They go further with the notion of ROI by splitting it into 2 types: 

  1. Anticipated ROI: Is a pre-launch forecast used by stakeholders to evaluate a project’s potential value and decide if it is a wise investment. 
  2. Actual ROI: By weighing the final costs against the revenue generated, this figure reveals the project’s true profitability and shows how closely real-world results matched initial estimates.

Many business experts consider ROI to be one of the most important decision-making tools. Since you can’t accurately calculate ROI unless engineering, marketing, and sales are all in alignment, it forces a strong internal organization. Beyond that, it ensures that resources are allocated towards the initiatives with the highest profit margins. 

Dev.Pro: Translating the SDLC into Real Business Value   

While building quality software is obviously important, you also have to consider how your products or features translate into everyday use for customers. Even more importantly, you must carefully assess the overall profitability of your products or features. 

At Dev.Pro, we pride ourselves on bridging the gap between technical work and business impact. Whether it be addressing low adoption rates or increasing ROI, we have the depth of experience to turn engineering efforts into profitable assets. 

Schedule a consultation today!