PLG with Product Management Metrics
Product-led growth is a user-centric strategy in which the product itself is the primary acquisition, expansion, and retention channel. It focuses on building products for end users and discovering where the real value in your product lies to create an amazing product experience that breeds customers who would want to share it with others.
A product-led growth strategy is most effective when data is used to make decisions on what to build next. Take the guesswork out of product roadmap decisions with a data-driven approach by mapping out your key product metrics and measuring them. This allows you to quickly figure out if what you’re building pushes the needle, and quickly change course if it’s not.
Understanding product-led growth
Core to product-led growth is understanding the value customers derive from your product. This allows a more structured and thoughtful product-building process, rather than haphazardly coming up with new features. Your company will be able to avoid investing time and resources into solutions that aren’t useful to your users.
Here are some key steps to kickstart your product-led growth strategy:
- Learn how customers are using your product
- Take note where users drop off from using a certain feature
- Define key “Aha!” moments or value moments where customers derive the most value from your product
- Track the user journey to find out how they arrived at this value moment
There are no universal metrics that companies can use to identify their value moments. It really depends on the nature and maturity of the company’s product, business, strategy, and goals. Often, companies aren’t able to accurately define their value moment because they lack data. A product analytics tool will be useful to provide you with initial metrics to test hypotheses on your value moments and help you redefine them if needed.
Here are some examples of what value moments might look like across different products:
- Kommunicate, a human and bot hybrid software based in India, identified their value moment as the moment a user completes the on-boarding flow.
- Twitch, a live streaming platform, might define a value moment as the moment a user watches more than five minutes of livestream.
Products in the same industry may also be subjected to different value moments. For example, Twitch and TikTok may both offer social network and video components in their products. However, their nature differs, resulting in different key value moments.
Twitch might define a value moment as a moment when a user watches more than five minutes of a livestream. However, since TikTok serves short form videos that are less than 60 seconds, it might identify a value moment when a user finishes watching an entire TikTok video instead.
Guiding users to the value moment is key in a product-led growth strategy. The next question to answer is: How can product managers accurately identify these value moments?
Identifying and monitoring value moments & other key product metrics
Suppose your product is a video-streaming platform and your value moment is defined as the moment a user has watched 60 minutes of video in a week. For this scenario, the product metric you would want to monitor is the average number of video minutes watched per user. Identify and address any reasons for this number to decrease, and build upon any action that makes this number increase. You will notice that you need to answer some other questions to better understand what’s impacting the value moments.
In our example scenario, you might find yourself asking some of these questions:
- User activation – Is there a drop-off where users are signing up but not playing any videos?
- Time to action – What is the length of time taken for a new user to arrive at the value moment? Can this be shortened?
- Social engagement metrics – Is engagement on the decline? Is this reducing the number of videos being discovered via shares on the platform?
- User metrics – Is this user group increasing over time? Who are these users? Are they new, retained, or re-engaged users?
It is important to be able to dive deeper into the product metrics and ask the right questions, especially if your metrics are trending down and less users are reaching the value moment. Analysis has to be conducted to find the reason for the downward trend and fixes might have to be made on the product to reverse this trend.
Accessibility of product management metrics
Mixpanel’s global survey of 450+ product leaders found that over 50% of product teams are not able to swiftly get answers to critical product questions. Many of them feel that they don’t have access to the data they need, lack the technical skills required, or that their analytics tools just aren’t well designed for product teams.
This is where a product analytics tool like Mixpanel can be helpful. Mixpanel provides powerful insights to your most important product metrics, delivered with a user-friendly design, so product teams can:
- Build funnels, determine the most common user flows, and create user cohorts with just a few clicks
- Enjoy a fully self-service platform to track product metrics quickly instead of spending time waiting for data, investing hours writing SQL, or even waiting for someone else to help you with it
- Integrate with over 50 tools like customer data platforms, engagement and messaging tools, attribution tools, and cloud data warehouses to gain extra insights on how your product metrics are performing and quickly take action from your findings
Empowering your teams to drive product-led growth
Building a data-driven culture within your product teams is key for a successful product-led growth strategy. Product decisions should be made based on what your customers and users are telling you from your data.
As Devashish Mamgain, Mixpanel user and Co-Founder & CEO at Kommunicate, shared with us: “I would encourage digital-first startups to set up product analytics from day one…You need to figure out which product features are working and which ones are not because everything is experimental in the beginning and being able to measure this will help to focus your limited resources on the right things. ”
Empowering your team with the right tools to access product metrics and identify your product’s value moment is crucial for success.