Metrics for product management

Simply put, you can only move what you measure. Gone are the days of blindly guessing what people might want to see in your product. Gut feelings, speculation, and the gamble of collecting feedback from a small segment of your user base are no longer viable strategies for making product decisions, big or small. If you want to stay ahead of the curve, edge out the competition, and—most importantly—drive value for your potential and existing customers, you need to set the right metrics for your business and track them diligently.

Product managers use product metrics to:

“So, what metrics should I be tracking?” If you build, manage, or market products, you’ve likely asked yourself this question before.

Here are the most commonly used product management metrics:

But which metrics matter most? A survey of nearly 500 product professionals across the globe revealed that these are the top 3:

While active usage, reach, activation, engagement, conversion, and retention are widely considered to be top metrics used by leading product teams across the globe, that doesn’t mean they’re the only ones you should be considering, nor does it mean that these are the metrics that will be most meaningful to you. Businesses and products are all unique and have different goals based on stage and ambitions.

One way to better understand which metrics you should be tracking is to point to what peers in your industry are measuring. Here are some of the most common examples we’ve seen across industries:

Although these metrics are more industry-specific, that’s still not enough. There is no such thing as a one-size-fits-all metric. In order to truly get the most out of your metrics, they must be business-specific.

While many top product teams count Revenue and Retention as their most important metrics, both are actually output metrics. By the time you’re able to actually measure your output, it’s probably going to be too late to impact it. This is why you need to identify and track input metrics that are specific to your product, business, and industry.

A well-known example is Facebook’s oft-discussed “7 friends in 10 days” metric. After observing that new users who added 7 friends in their first 10 days were much more likely to become long-term users (i.e., retain), this became an input metric used to measure and support Retention, one of their key output metrics.

Another way to think about input vs. output is to think of your output metric—an important, but ultimately lagging indicator of whether you’re succeeding or failing—as your focus metric, while your inputs are all the supporting metrics that service that key metric. Though sometimes referred to as the “north star metric,” here at Mixpanel, we prefer to call it a focus metric, since we don’t believe there can be just one metric to rule them all. Supporting metrics will typically be more specific, measurable, actionable, relevant, and time-bound than the overarching focus metric (think back to Facebook’s “7 friends in 10 days” metric). These are the checks and balances product teams use to ensure they are on the right track—or, conversely, to indicate that adjustments may be needed.

A subscription-based video streaming company, for example, might structure their metrics framework like this:

Now you know what you want to track, but how do you actually track it?

Tracking product metrics can be a huge undertaking without the right tools in place. Specifically designed to answer any and every question product teams may have about their metrics, a product analytics platform like Mixpanel is the most powerful and efficient way to track, manage, and improve the metrics that matter most to businesses in all verticals and growth stages.

With a product analytics platform and a solid metrics strategy in place, product managers can effortlessly:

Lastly, it’s imperative to remember that the goal of measurement isn’t just to track change over time; it is to effect change as well. To observe metrics over time requires rigor, discipline, and focus. To improve them requires all that, plus ingenuity. And that’s what building and managing products is all about.