Mobile and web analytics company Mixpanel has just launched a new product to help companies track their best sources of revenue.
Essentially, the pitch is this: Mixpanel’s new Revenue Analytics product helps you determine the lifetime value of a customer. That’s a great metric on its own; and when it’s paired with the ability to track precisely how specific items in your strategy and tactics are impacting revenue, it grows wings. And helping product managers see, without having to run a report, that 35-50 year old female clients are twice as valuable as 18-25 year old males, or that customers acquired via Google AdWords spend three times as much as those who enter via Twitter, is magic.
That’s especially important right now, says Mixpanel CEO Suhail Doshi, because startups are having a hard time raising money — especially for consumer plays. But if they can show exactly how their product converts and funnels and ultimately produces cold hard green cash, the VC conversation is an awful lot easier to ace.
The new product is free to Mixpanel’s existing customers and installs, Doshi told me, with one line of code in your web or mobile app.
“The broader part of the industry doesn’t use this [lifetime value of a customer] metric,” Doshi told me yesterday. “But it’s an important number to know. Companies like Zynga and Netflix grew very fast because they could spend millions and millions of dollars and know they’re going to get a return on their investment.”
But in isolation, any metric is limited. The true magic comes when you know what factors drive your key metrics.
That’s the target Mixpanel’s new product is squarely aimed at. Mixpanel already knows an awful lot about your users; now, the plan is to tell you exactly which factors lead to maximum revenue. That’s how, Doshi told me, social dating site Grouper found out that Chicagoans were their most valuable users (who would have known?). And how project management company Sprint.ly discovered that customers who integrated their product with Github were 1,400 percent more valuable.
“This is actually very, very hard, and most companies don’t do this because the data is hard to access, it’s a manual process,” Doshi said. “But when you have it integrated, you can ask questions like, ‘Is Facebook Connect actually getting our customers to stay?’ and ‘What’s the actual value of that?’”