What is the GEM(S) framework?

• GEM(S) framework is a framework for defining appropriate metrics for the product.
• The framework is based on Gibson Biddle’s “GEM” framework, which stands for Growth, Engagement and Monetization.
• I added the “S” to the framework for Satisfaction metrics (such as NPS) which are not included in the “GEM” framework but are still very important.

What are the main metrics included in the GEM(S) framework?

• Growth related
  • Enter new markets
  • More customers
  • More paying customers
  • More users
  • More users per customer
  • Improve win rate
  • Better lead to opportunity conversion
  • More free trials
  • More downloads
• Engagement related
  • Longer activity
    • Session length (Average session length = Total sessions duration / Total sessions)
    • TOD (Time On Device)
  • More active users
    • DAU (Daily Active Users)
    • WAU (Weekly Active Users)
    • MAU (Monthly Active Users)
    • Stickiness = DAU / MAU
    • Sessions per user (Average sessions per user = Total number of sessions / Number of users)
  • Value received
    • TTV (Time to Value)
    • Adoption rate (percentage of users who move past exploring the product and start to really use it = number of new users / total number of users x 100)
  • Retain users
    • Retention curve
    • Retention rate (percentage of customers who stay with the company after a certain time period = (Customers at the end of the calculated period - New customers) / Customers at the start of the calculated period)
    • Customer churn rate = Customers lost / Total customers OR (number of users beginning – number of users end) / number of users beginning
• Monetization related
  • More revenue
    • MRR (Monthly Recurring Revenue = sum of current monthly subscriptions + revenue from new subscriptions + upgrades - downgrades - revenue from lost customers OR number of customers x amount each customer pays per month)
    • ARR (Annual Recurring Revenue)
  • More revenue from each customer
    • ARPU (Average Revenue Per User = Total revenue / Total number of users)
    • CLTV (Customer LifeTime Value = Average customer lifetime x Average revenue per user (ARPU) OR average order value x purchase frequency x customer lifespan)
    • NDR (Net Dollar Retention)
  • More revenue per transaction
    • AOV (Average Order Value)
  • Reduce costs
    • Sales / Marketing / Support / Success expenditure
  • Reduce acquisition costs
    • CAC (Customer Acquisition Cost = Total sales and marketing spending / Number of new customers)
  • Reduce churn
    • Churn rate aka Revenue churn rate = Revenue from lost customers / Total revenue
  • Increase expansion
  • Increase renewals
  • More upgrades
  • Increase customer to paying customer conversion rate (measures the percentage of users who took a desired action = Number of converted users / Total number of users)
• Satisfaction related
  • Improved satisfaction
    • NPS (Net Promoter Score = percentage of promoters – percentage of detractors)
    • Better review score (e.g., G2, TrustPilot)
    • CSAT (Customer SATisfaction score = Number of satisfied responses / Total number of responses x 100)
    • CES (Customer Effort Score = Sum of all scores / Total number of respondents)
  • Less support tickets
  • Social sentiment analysis

How to use the framework?

• Choose the most relevant metrics to your product from each of the categories.
• Favor metrics from categories that align with the business strategy (e.g., growth).