As product teams grow, tracking KPIs become more and more crucial to determine the success of product initiatives, while helping drive future decisions.

Not sure where to start? We’ve compiled a list of 10 product management KPIs that every product leader should track, from more company wide metrics, to specific product metrics.

Understanding Product Management Metrics

What Are KPIs?

KPIs, also known as key performance indicators, are trackable performance metrics and documentation that allow businesses to predict buying trends and manage products and services accordingly. By definition, key performance indicators (KPIs) offer measured results that you can see, demonstrating how effective a product strategy can be to achieve a company’s crucial business goals. KPIs can be a critical component of product management, providing insights into performance and value to guide strategic product decisions, and achieving business objectives. Incorporating product management metrics is essential for tracking the success and performance of a product, making data-driven decisions, and assessing user engagement, revenue, market presence, and innovation.

Why KPIs Matter in Product Management

Product management KPIs can drive product strategies by helping product managers adjust marketing techniques to better understand user behavior based on real-world feedback and data. Customer feedback is crucial in improving product design and user experience. Product managers can use KPI ratings to prioritize features or improvements for existing products and services while measuring the potential success of new products and services. It can also help identify areas of dissatisfaction, giving product managers focus to strive toward business success.

The Top 10 Product Management KPIs

KPI 1: Customer Satisfaction (CSAT)

Customer satisfaction score (CSAT) measures customers’ satisfaction with your products and services. You can use surveys and feedback as a unit of measure, collecting data on a scale of 1 to 5 for satisfaction ratings. High CSAT scores correlate with the success of your business products and services, securing customer loyalty and showcasing positive word-of-mouth marketing. 

KPI 2: Net Promoter Score (NPS)

Net promoter score (NPS) asks, “How likely are customers to recommend your product or services to others?” Typically measured with surveys on a 1 to 10 scale, a higher score indicates intense customer satisfaction, attraction, and loyalty, giving businesses potential marketing and growth opportunities through customer referrals. 

KPI 3: Customer Retention Rate

Customer retention rate showcases the number of customers likely to continue using your products and services after making an initial purchase. Measure the number of customers at the end of a period compared to the number of new customers at the beginning. Look for overlaps that indicate multiple comeback customers. With higher retention rates, you can predict how best to meet customers’ needs and demands to cultivate long-term customer-to-business relationships. Customer lifetime is a related metric that helps in understanding long-term customer relationships.

KPI 4: Customer Churn Rate

Customer churn rate highlights the percentage of customers who have stopped using your products and services over a period. To measure, subtract the number of customers lost during a period from the total number present at the beginning of a period, then multiply it by 100. Higher churn rates indicate dissatisfaction, pointing to potential customer problems with your products and services.

KPI 5: Monthly Recurring Revenue (MRR)

Monthly recurring revenue (MRR) is a predictive revenue system generated by your monthly products and services. Check the sum of all subscription revenues that customers pay in a month. This offers a transparent view of a product and service’s financial growth and trajectory. It gives businesses a good idea of how successful a product and service could be in the long term. Average revenue per user (ARPU) is a related metric for understanding revenue impact.

KPI 6: Customer Acquisition Cost (CAC)

Customer acquisition cost (CAC) is the cost of obtaining new customers, including sales and marketing expenses. To measure CAC, divide the total marketing and sales expenses by the number of newly acquired customers. The lower the costs, the higher the likelihood of maintaining growth and achieving a sustainable business model. You aim to spend less on optimal marketing with the best results possible.

KPI 7: Lifetime Value (LTV)

Customer lifetime value (CLV), also known as lifetime value (LTV), is the total revenue expected to accumulate from a single customer throughout their relationship with your company. To measure, multiply the average purchase value by the number of products and services per year and the average customer lifespan. LTV helps you predict customer revenue patterns, placing long-term value on customer-to-business relationships and guiding investment decisions.

KPI 8: Feature Adoption Rate

Feature adoption rate indicates customers’ use of new features or versions of your product and services. For instance, if you release a new version of an existing company product, how quickly will customers flock to buy it? To measure, divide the number of customers using a feature by the total number of users, then multiply by 100. High adoption rates showcase the relevance and value of potential new products and services. You can plan releases around feature adoption rates.

KPI 9: Time to Market

Time to market describes the gap between a product or service’s conception and its launch to the public. You can track development from the start to the launch date, predicting how long it will take to conceptualize and market future products and services. When you market a product and service faster, you have a competitive edge over other companies, meeting customer needs and demands quicker.

KPI 10: Product Usage and Engagement

Product usage and user engagement track how customers interact with your products and services. Analytics tools can help businesses track user behaviors, session durations, and usage of certain features. Where are you customers spending the most time? Where are they getting stuck? Creating KPIs to answer these questions can inform whether a product is valuable or where you can make improvements.

How to Implement and Track Product Management KPIs

Identify KPIs for Effective Product Management. While there are 10 product management KPIs, not all are necessary for every business’s success. Implement all of them, then select the ones that made the most impact in alignment with your business goals.

Utilize Tools. Google Analytics, Mixpanel, and Amplitude help monitor customer behavior toward and engagement with products and services through data analytics. The kind of tool you use depends on the product management KPIs that have proven most effective for your business. Set up these tools so that the KPIs are front and center.

Use Explo. Explo offers a free tier for internal BI, allowing you to sync and surface product management KPIs from your data warehouse. Create live dashboards that are live and easily shareable to your team. With unlimited internal users, Explo provides a free alternative to traditional BI and Product analytics tools.

Conclusion

The top 10 product management KPIs mentioned above can significantly and effectively enhance product performance, user satisfaction, and business growth. These KPIs are your best tools for forward-thinking, customer-centric decision-making that highlights the best of your products and services. They provide valuable insights and resource allocation, teaching you how to market your wares better to gain customer loyalty and become a well-loved, reliable business. You can make your company successful, and using resources and tools to help you learn and grow along the way is okay.

Are you looking to enhance your product management skills to create a better business model? Book a demo with Explo now to track product management KPIs efficiently. A demo lets you see how Explo can help you monitor and manage your products and services with key performance indicators.

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