Deciding which product metrics to use can be challenging and will be different for every business because each business has different goals and delivery prospects. However, a great way to identify the best product metrics for your business is to start by asking yourself the right questions. These might include:
· If we imagine an ideal customer who is getting value from our product, what actions are they taking?
· Where is the start and ideal end point of our customer’s journey? (e.g. sales, sign ups, enrolment)
· Which metrics reflect this actual user behaviour?
· Which metrics most closely relate to our overall business goals
· What are the individual steps a user needs to take in our product in order to achieve a goal?
· Is this feature designed to solve a problem that all our users have, or just a subset of our users?
These questions can be generated by using product usage concepts that have become commonplace and heavily relied upon. These terms are indicators of key points during a customer’s journey and are summarised below:
· Intent to use: Actions that customers take that show that they intend to use the product or feature.
· Activation: The point at which a customer-first derives real value from the product or feature.
· Engagement: The extent to which a customer continues to gain value from the product or feature (frequency, a period of time etc.).
Product metrics are a fantastic way of evaluating how successful a product launch has been and whether you need to adapt your product strategy. It allows you to respond to user feedback and engagement quickly, as product success is quantified into easily digestible information. There are several key benefits to using product metrics for every product you plan to launch.
1. Builds Team Alignment
All team members working on the product are working towards exactly the same goals and outcomes. By discussing and sharing goals and the product metrics you will be using you prevent and minimise disputes during the building process because everybody has already agreed on what is being built and why.
2. Easier to Get Sign Off from Executives
Getting approval from executive employees, especially for costly projects and products, can be challenging. Product metrics add objective support to the plans you propose to executive staff when you present your product roadmap, which helps to illustrate how the product will have a positive impact on the business through predicted ROI.
3. Enables More Informed Decisions
Metrics provide quantifiable evidence about which aspects of the product or customer experience are resonating with customers, and which are not. Monitoring and analysing this data-driven information leads to more intelligent decision making throughout the product development process, which helps the company continually improve its products.
Without this data, product specialists and decision makers are left with no quantifiable feedback and therefore are left to guess which products and features to prioritise and what approach or product strategy to commit to. Metrics allow teams to respond to real life data and user feedback by allowing the measurement of performance against set metrics, leading to a more successful product launch that is suitable for its audience.
4. Introduces Accountability
Targets that are pre-set and agreed as a team increases a culture of trust and shared responsibility. Pre-set product metrics introduces accountability into product development, by reminding the team that the customer, and the customer alone, determines whether it’s successful. It means that everybody feels a bigger sense of responsibility and autonomy, as they know that the success indicators are completely out of their hands.
There are different metrics for different factors. I have collated some examples below.
· Conversion Rate
· Cost per Acquisition
· Customer Base Growth
· Customer Life Span
· Churn Rate
· Net Promoter Score
· Active Users
· Session Length
· Number of sessions
It seems like product metrics are a really fundamental part of successful product delivery and ensuring that the product is well suited and targeted at the ideal audience. These metrics can visualise goals and break them down into achievable, actionable points. Shared goals undoubtedly help product teams work well together and work with accountability, which are all factors leading to a successful product launch.
I’d be keen to hear from my network about their experiences of identifying key product metrics and using them to manage and deliver products. Drop a message in the comments, or get in touch if there is anything more you’d like to know or contribute.