What Are Product Management Metrics?
These are metrics that relate to a product and how it is purchased, including the way users interact with a product. Product management metrics provide insight that helps managers develop better products that are more likely to appeal to a paying customer.
Why Should Product Managers Track Metrics?
What if you could know exactly which product features convert the most customers? Or which customers were the most valuable? How about knowing whether a product tutorial will reduce customer service requests and increase retention?
Data-driven product management provides intelligence that helps a company grow their customer base and stay ahead of their competition. Every purchase, rating, and bounce accumulates data that a manager can use to fine-tune the product or path to purchasing. Product managers no longer have to make guesses blindly or rely on a small segment of customers for feedback to make crucial decisions about product development. Product metrics and analytics can also give you the means to conduct A/B tests and funnel analysis that further support findings.
You can use products metrics to:
- Understand the user’s path to purchasing a product.
- Know where the highest value customers are coming from.
- Figure out which features are the most popular, underutilized or missing the mark.
- Get a solid idea of how satisfied customers are with a product.
- See how many steps of a tutorial a user completes before using a feature.
- Find out how many customers or users return after signing up.
- Learn how users engage with a product.
- Build customer loyalty and increase referral rate.
- Create user cohorts based on who engages and what they do.
Apps, eCommerce, SaaS – no matter what the product is, there are metrics that can help you improve it.
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Which Metrics Should Product Managers Track?
Today’s analytics tools make it possible to gather hundreds of data points about customers and a product offering. But not all of the data is truly meaningful and relevant. The data will depend on the type of product you’re selling, but common product metrics you may want to consider tracking include:
A purchase can come in the form of an order, download, subscription, etc.
The amount of total revenue a product has made.
Lifetime Value (LTV) of a Customer
An estimate of the overall monetary value of a customer.
Customer Acquisition Cost (CAC)/Cost Per Acquisition (CPA)
How much it costs to acquire a new customer.
Knowing the number of leads that are coming in can help you determine if messaging is on point and if the product is appealing to the target market.
Lead Form Abandonment
Tells you where in the signup process users drop off and the percentage of users that abandon a form after starting it. In the eCommerce world cart abandonment is a similar metric category.
How many leads turn into customers is the conversion rate. It gives you an idea of how many leads you need to reach sales goals and whether your leads are qualified.
Average Revenue Per User (ARPU)
How much revenue is generated in a given time for each user. This metric may include users who have not made a purchase.
Monthly Recurring Revenue (MRR)
The amount of money coming in every month from the sale or use of a product, both new and add-on MRR.
Annual Recurring Revenue (ARR)
The recurring revenue over the course of the year tells you the ARR.
When a user lands on your site or landing page and leaves without taking any action that counts as a bounce.
The number (in percentage) of customers who stop using a product in a given time period.
The flip side to churn rate is retention. It takes a lot of work and investment to convert a lead into a customer. Existing customers are also 40-65% more likely to purchase a product compared to a new customer.
Customers that purchase on more than one occasion, which boosts LTV and lowers CPA.
Net Promoter Score (NPS)
This customer satisfaction metric gauges how likely it is that a customer will recommend your product to others. It can provide more understanding about customer loyalty and churn.
This indicates how many people are actually using a product and how they are using it.
The percentage of customers that actually refer others.
Tracking the support tickets can indicate whether there are flaws in the product or it’s too complex for the customer base.
Active users tells you how many people are actually engaging with a product or feature of a product on a daily, weekly or monthly basis.
Actions Per Month
The number of times a specific action happens that’s related to the product and the value it provides.
Engagement can be measured by the dwell time, but you have to comb through the data to root out anomalies.
Visits to Subscription
Are you winning leads over in their first visit or does take multiple visits to convert a lead?
There are also countless user behavior and event metrics that can be measured to gauge how customers interact with products and the actions they take leading up to a purchase or bounce.
How Should Product Managers Track Metrics?
The data is there for making major discoveries, but how should a product manager track it? Tracking product metrics can be a huge undertaking without the right tools. An analytics platform like Mixpanel is the most efficient way to gather data, bring it all together and display it in a way that makes discovery possible.
With a product metrics analytics platform:
- Product managers can choose to track the metrics that matter most without all the distractions of data that doesn’t apply.
- Marry online and offline data for a complete picture.
- Automatically generate reports with actionable insights that answer important product development and customer questions.
- Segments can be created to look at the metrics on a more granular level.
- Managers can run A/B tests to improve conversions, engagement and customer satisfaction.
Mixpanel is used by some of the most successful businesses in the world that understand the power of accurate, actionable product data. Our use machine learning algorithms are engineered to source the most meaningful data and provide insights automatically. It’s one of the most comprehensive product management tools ever created.
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