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It’s thorny to estimate what features you need to enhance the user experience and increase product success. Luckily, in the age of technology, it’s no longer a burden since the process is much more alleviated. Product management metrics are quantitative data businesses track to analyze and gauge products’ performance and success. Thanks to the info, you can have a full-HD picture of users’ engagement, customers’ interaction with your product, service, or app, and how it influences your business.

Since we already had a talk about KPI and metrics in software development, it’s high time we discussed the best product management metrics to consider. Right now, you’ll receive a complete package of the needed information about metrics that will help you demonstrate the overall health of your business. If you are ready to get the answers to the questions, like: “What are the best metrics to keep in mind?”, “How to choose the most effective ones?” or “What product management metrics should be shared with external dev partners?”, don’t hesitate to scroll down!

Why Tracking Product Metrics is an Essential Process for Product Managers?

Product managers essentially shoulder the responsibility for the product’s success. Everyone expects them to create and plan the development workflow, allocate resources, and define, track and compare relevant performance testing metrics. With the help of product management metrics, product managers aim to determine the user’s interaction with the product, analyze it, and spot products’ success and failure.

Success metrics for product management are core elements to estimate the overall user’s engagement with the application, and they provide the objective data on it directly to your fingertips. Rather than doing guesswork and entirely relying on your intuition, you can focus on applying metrics that will lead you to the answers to your central questions: Are you moving in the right direction to achieve your goals?

Creating value for your business is equal to creating value for your customers. You must set key product management metrics to achieve that and top your competitors. They ensure insights about the popularity and underutilization of specific features within the application, the total number of users who continue to use it after the first signing up, their satisfaction with it, and so forth. Even though it comes in numbers, the effectiveness of SaaS product management metrics is spectacular in the case of proper interpretation. All this information helps keep up with the app’s current state, improve product quality and help make the most beneficial product development decisions.

Best Product Management Metrics Product Managers Need to Know

Google Analytics is an excellent tool for calculating data and imaging it. So naturally, there wouldn’t be any problems deciding how to measure the metrics, but there surely would be one choosing them. You would wish to spend too much time tracking different metrics that won’t even matter to your product’s improvement. It is pretty challenging to pick the right product management metrics to track and analyze.

Hinging on your goal, the metrics and their needed amount can vary: from introducing the product to a brand new target audience to enriching the existing base for a more pleasing customer journey and product’s popularity. For this reason, here are some key product management metrics on which PMs should keep an eye:

Retention rate

This product metric calculates your business potential by determining the product’s repetitive usage level. The math is simple: the more people are fond of your product, the more loyal customers you get. So the customer retention rate determines the number of users who habitually used the product for a certain period. It can be based on the total download or signup numbers, etc. So the formula goes like this:

Discover Some of the Most Common Product Management Metrics You Should Share With Your External Dev Partner

Churn rate

Churn is the complete opposite of retention. It shows the percentage of customers who stopped being users of your service. The churn rate needs to be measured in two ways: customer churn – how many users are gone – and revenue churn – how much money you lost due to the previous fact.

Discover Some of the Most Common Product Management Metrics You Should Share With Your External Dev Partner

Revenue

The name speaks for itself: this indicator shows the amount of money a company gets from investments. Are product features paying for themselves, or will they lead to bankruptcy? Besides measuring the revenue, do not forget its leading indicators that aren’t any less important.

The average revenue per user and monthly/annual recurring revenue are crucial B2B product management metrics. ARPU measures the income from each customer to have a vision of revenue on a complete personal customer level. At the same time, MRR/ARR calculates the monthly or yearly revenue, helps track the cash flow over a certain period and predicts potential income from a future perspective.

Discover Some of the Most Common Product Management Metrics You Should Share With Your External Dev Partner

Acquisition

You need to apply this product management metric to understand from what marketing channels users come and how they discover your product. Thanks to the acquisition metrics, you can get insights into promotion campaigns and decide on the most effective and engaging ways of advertising the app. You’ll be able to optimize the customer journey by tracking the points. Pay attention to the duration users dedicate to observing your product, the most popular and most disliked features, the most efficient marketing channels, and so forth.

Customer acquisition cost

Have you ever wondered how much you need to spend attracting users? How many ads do you need to create for a particular time? That’s where the next exciting part comes: the customer acquisition cost. The CAC covers all the marketing, communication, and analytical expenses. Those include salaries for the marketing and sales team, product development, related content creation, etc. One of the many formulas for customer acquisition cost goes like this:

Discover Some of the Most Common Product Management Metrics You Should Share With Your External Dev Partner

Customer lifetime value

Without discussions, your customers are priceless; you should treasure them as the apple of the eye. Nevertheless, they are, in fact, a significant source of your company’s income and value a precise amount of money. CLTV is used to calculate the funds one user gives to the company while remaining their customer. This product management success metric allows you to estimate the amount you need to spend on the user at the very beginning. And calculate the possible profit from them!

Discover Some of the Most Common Product Management Metrics You Should Share With Your External Dev Partner

Conversion rate

The following key performance metric for product management is conversion. Being a noun to the verb “convert,” this metric measures the percentage of users who transitioned from one stage of the funnel to the next. It means they clicked on a specific button, downloaded a particular file, purchased an item, subscribed to a service, etc. In fact, the course of events during this stage exposes the parts of the product that need improvement, so it obviously must be analyzed and monitored.

Discover Some of the Most Common Product Management Metrics You Should Share With Your External Dev Partner

Activation

This metric is a requirement for most SaaS products. It measures the number of users who lived their first value moment. For instance, activation could mean transitioning from a free trial to a paid subscription or uploading the work on the platform. It’s an indicator of user engagement that shows how interested people are in your product.

It also solves the mystery whether they want to continue using it or leave it alone for good. Additionally, you’ll get to monitor your audience’s behavior and habits. During this, try answering the following questions: What attracts users to stay for a while? With which features do they interact the most frequently? How much time do they spend with your product?

Engagement rate

You may have a vision of a super helpful app and features you dreamed of adding. Yet, it turns out that both of them were completely unnecessary and did not receive any of the users’ attention. This metric can tell you the frequency of usage of your product, its specific features, and other offerings.

For example, you want people to develop a habit of using your app or visiting your website. In this case, you can split the categories into daily active users, weekly, monthly, and so on. Based on that, you’ll be able to determine the plan of maintaining the product’s success, improving the engagement with it thanks to various additions, or rescuing it from failure.

Net promoter score

The significance of getting feedback is known to probably everyone. After asking customers to rate their satisfaction with the product from 0 to 10, NPS calculates two variables.

The first one is the number of customers who gave you 9 or 10. Those would most likely become the promoters of your product. That means they could recommend a particular product to their friends, partners, and other people in general. Furthermore, the second variable includes those who would forever hold their peace rather than talk to others about your service, giving it from 0 to 6 points – so-called detractors.

As a matter of fact, both have an enormous impact on a product’s future since it’s a great tools to foresee possible turns outs, seeing the gaps that need improvement or even spotting specific tendencies.

Discover Some of the Most Common Product Management Metrics You Should Share With Your External Dev Partner

The Most Important Product Management Metrics to Track

Honestly, it’s hard to allocate the list of the most influential business metrics for product managers that would be universally functional. Conversely, it’s pretty challenging to choose only a few from the long description above when all of them sound so required. However, we can highlight the trio, without which there would be no point in moving further:

  • Retention rate
  • Conversion rate
  • Engagement rate

Regardless, we cannot downplay other metrics or worship the ones used by the top product management teams within the market. What’s the point of choosing so-called “the best” metrics if they aren’t valuable and practical for your product? Depending on your goals and ambitions, your project might demand a completely unique set of metrics from those you heard on the other business webinar.

Instead, you should pay attention to your industry mates’ metrics since they might use specific metrics that, in your case, would bring a positive effect. Prioritize your customers’ needs over running after the latest trends in software development. In comparison, not a single soul would forget about the retention rate metrics that are the output metrics – basically, the most promising indicator of success – but might actually neglect input metrics that have an enormous impact on output ones.

Let’s review phases in agile methodology together!

The frequency of tracking metrics for product management hinges on your product development deadlines. Still, doing it too often may lead to an inappropriate allocation of resources. For instance, there’s no need to measure the revenue of your product every single day. You simply won’t see any progress! Thus, it will only upset or demotivate you. Instead, it would be best to focus on your metrics’ characteristics. Some might be collected once a week, others – once a month.

B2B Product Management Metrics to Share With Your External Dev Partner

As we already know, product managers are the backbone of a successful workflow. Keeping up with the rest of the team is a crucial element of every development process for a high-quality product. Certainly, there’s no need to share every tiny change of all 10 or 15 metrics you’ve chosen to gauge. There are undoubtedly a couple of metrics, including general progress, tense moments, and team alignment with workflow. In fact, that information is surely worth sharing among other departments. Some of the essential B2B product management metrics:

  • Churn rate
  • Retention rate
  • Revenue
  • Customer acquisition cost
  • Net promoter score

Unfortunately, well-coordinated work with a loyal and trust-worthy team, where every member is entirely aware of the latest updated news, doesn’t come by default. Therefore, product managers are responsible for creating a safe space of harmonious collaboration with departments involved in the development process.

To alleviate cross-team communication, PMs must develop a plan for the future work process. Thanks to that, every single soul is in the loop on the product strategy. They must also be excellent listeners, have developed empathetic and communicative skills. In fact, being profound within the departments’ operations, slang and so forth wouldn’t hurt either! Product managers must be open to feedback and encourage team members to express their opinion on specific functionalities. This way, they’ll be able to deliver the best solutions on the market.

Discover Some of the Most Common Product Management Metrics You Should Share With Your External Dev Partner

Final Thoughts

Let’s face it: creating a flawless application from the first strike is impossible. You have to shoot a dozen to get a lucky one. Receiving users’ feedback, building an MVP, and making improvements are inevitable elements of every development process. Metrics-driven product management can detect the product’s drawbacks, weak spots, and every possibly annoying feature to users.

Thanks to these incredible metrics features for product management, you can upgrade the roadmap of the development process to the final destination of the total product’s success. Vince Law – a product consultant – says: “A metric will tell you that something is happening, while an analysis will tell you why something is happening.” Those numbers require your interpretation and vision to actually do their work. All in all, everything’s in your hands!

Consider Inoxoft Your Trusted Partner

Inoxoft is an international software development company with more than 8 years of experience behind. We impeccably specialize in Data Science and Big Data Analytics Services, Web and App Development, UI/UX design, Quality Assurance, Discovery phase and IT System & Software Integration Services! Being experienced in working within the 5 fields, Inoxoft is confident about delivering the best quality products to clients and is wholly committed to their success.

Incidentally, our team designs the finest software development solutions in the United States! We invite you to add Inoxoft to your list of reliable outsource partners with reasonable prices and the ability to create a product that meets all expectations and matches business needs. If you are interested in our company, feel free to contact us right now!

Frequently Asked Questions

Why do you need to measure product management performance?

Product management metrics are core elements to estimate the overall user’s engagement with the application, and they provide the objective data on it directly to your fingertips. Rather than doing guesswork and entirely relying on your intuition, you can focus on applying metrics that will lead you to the answers to your central questions: Are you moving in the right direction to achieve your goals? 

What are product management metrics?

Product management metrics are quantitative data businesses track to analyze and gauge products’ performance and success. Thanks to the info, you can have a full-HD picture of users’ engagement, customers’ interaction with your product, service, or app, and how it influences your business

What metrics are important for a product manager?

It’s hard to allocate the list of the most influential business metrics for product managers that would be universally functional. Regardless, we cannot downplay other metrics or worship the ones used by the top product management teams within the market. What's the point of choosing so-called "the best" metrics if they aren't valuable and practical for your product? Depending on your goals and ambitions, your project might demand a completely unique set of metrics from those you heard on the other business webinar.