7 Key Product Management Metrics and KPIs to Track in 2024

Analytics Jan 11, 2024 20 minutes read

Table of contents

    Here’s a question for you – is your product really what your users need?

    Does it effectively solve their pain points? Is it simple to use and can they navigate it easily? Does it have all the necessary features?

    The problem is, most people answer this question based on their assumptions, subjective opinion, or what a handful of power users tell them.

    And while you may know your product inside and out, you’re assumptions on whether users like it aren’t really worth much until they’re backed up by actual data.

    In reality, you need to look at your product management metrics and KPIs as well to see how well your product is doing.

    But, wait, which product metrics are the most important to track?

    That’s exactly what we’ll cover in this report.

    We’ve got a list of product metrics sourced from experts to help you better evaluate your product’s performance. In fact, we talked to 37 pros who sell digital products and services to unpack the product metrics they track.

    google_analytics_product_revenue_dashboard_databox

    Overall, here’s what we’ll cover:

    What Are Product Management Metrics?

    Product management metrics are quantitative measures used to assess the performance and success of a product.

    These metrics help product managers understand how their products are performing in the market and inform decisions for improvements or pivots.

    Let’s say you think many users stick to using your product for the first few days but drop using it after that.

    To test this hypothesis, you need to start looking at your product data to understand whether your assumption stands true. It’s only when you track the correct metrics for product management that you can be sure of your product performance.

    What’s The Difference Between Product Management KPIs and Metrics?

    In product management, both KPIs and metrics are used to measure a product’s performance, but they serve slightly different purposes and have different characteristics within this specific context.

    To be specific, metrics are broad-ranging data points that track various aspects of a product’s performance. These can include user engagement statistics, feature usage, time spent on the product, and many other measurable factors.

    They provide a comprehensive view of product performance and give detailed insights into specific areas. They’re essential for understanding the product’s day-to-day operations and for making informed decisions about product features, user experience, and technical improvements.

    On the other hand, KPIs in product management are a selected subset of metrics that are directly aligned with the product’s strategic goals and what it’s trying to achieve.

    Product managers and stakeholders use the KPIs to assess whether the product is successful in achieving its primary objectives. And unlike metrics, KPIs are less about the granular details and more about the overall health and success.

    For example, while a product manager might monitor a range of metrics related to user behavior, they might put customer retention rate and monthly recurring revenue as KPIs, if these are the business’s main indicators of the product’s success.

    How Do You Measure Success in Product Management?

    When it comes to measuring the success of a product, we learned that the top three product management key metrics for B2B that help are:

    • Revenue (MRR, ARPU, CAC, CLTV/LTV, ACV)
    • User satisfaction (NPS, CSAT, OSAT)
    • Retention/churn
    Key Product Management Metrics

    Companies that track these product metrics invest time in analyzing product data and deriving insights more than acting upon insights or reviewing product metrics.

    As for how they monitor product management metrics, it turns out Google Analytics is our respondents’ favorite. In fact, 90% of the experts say the tool is irreplaceable for them when it comes to analyzing product metrics.

    Another irreplaceable option is a centralized dashboard like a product management KPI dashboard where pros can view and analyze their most important product metrics on one screen.

    Two more popular options are HubSpot and Google Sheets.

    The takeaway? Be sure to not only track the right product management metrics but also analyze them to draw insights for improving your product.

    With that, let’s look at the key metrics you should be monitoring in-depth.

    Types of Product Management KPIs

    Now that we’ve covered what product management metrics and KPIs are and how to measure them, let’s check out the different types of KPIs you can run into:

    Business Performance KPIs

    Product Usage KPIs

    Product Development KPIs

    Product Quality KPIs

    Business Performance KPIs

    Business performance KPIs are used for evaluating the financial and market success of a product.

    These KPIs encompass metrics like revenue, market share, and profitability, offering a clear view of how a product contributes to the company’s bottom line.

    Business performance KPIs are essential for a holistic understanding of a product’s impact on the business and for guiding strategic decisions in product development and marketing.

    Product managers often use them to identify areas where a product is excelling or where it needs to be improved from a business perspective.

    Product Usage KPIs

    Product usage KPIs focus on how customers interact with a product.

    They track various aspects of product engagement, which provides insights into the product’s performance, feature utilization, and overall user satisfaction.

    By understanding usage patterns, product managers can make informed decisions about further product development and see which areas should be optimized for a better user experience.

    Product Development KPIs

    As the name suggests, product development KPIs focus on the effectiveness of the product development process.

    Product managers use them to track how resources are used in creating and improving the product.

    Metrics like development cycle time, sprint velocity, and the rate of bug fixes are just some examples that provide insight into the pace and quality of development.

    They also include measures of innovation, such as the number of new features released and the adoption rate of these features.

    Product Quality KPIs

    Product quality KPIs are used for assessing the product’s overall quality and reliability.

    These KPIs include metrics like defect rates, customer satisfaction scores, and service level agreement (SLA) compliance.

    They help product managers locate areas where the product might be falling short in terms of quality or user expectations. Monitoring these KPIs is vital for maintaining high standards and making sure your customers are satisfied.

    Key Metrics and KPIs Successful Product Managers Track

    Now, let’s run you through which product management metrics you should monitor and why, and see what our industry experts had to say about them:

    Average Revenue per User (ARPU)

    Average revenue per user (ARPU) is a metric used to measure the revenue that a single user generates over a specific period (e.g., a month or a year). It’s calculated by dividing the total revenue by the total number of users during the period.

    Since the metric provides insight into how much value each user brings to a business, product managers track it to better understand growth at the user level.

    A rising ARPU indicates that the company is successfully increasing user-generated revenue, which could be due to upselling, cross-selling, or customers opting for more expensive services.

    Tim Hill from Social Status is one of our respondents who recommends watching the average revenue per user (ARPU):

    “ARPU gives me a direct market status of my product. Because social media analytics tool undergoes fast-paced changes and updates, I need to determine the revenue generated per user regularly.”

    “By doing so, I can define my future service revenue whenever I plan to improve the product features and alter the price,” Hill explains. “Hence, keeping an eye on ARPU helps me strike a perfect balance between client satisfaction and my business profits.

    Expert Insights: According to the data from our SaaS Benchmark KPIs benchmarks group with over 2000 contributors the median value for ARPU for December 2023 was $118.24. And for an even deeper understanding, our Benchmark Groups offer additional metrics and insights, which you can access for free by simply joining a Benchmarks group.

    ARPU

    Customer Acquisition Cost (CAC)

    Customer acquisition cost (CAC) is a metric product managers use to assess the total cost of acquiring a new customer.

    It includes all marketing and sales expenses over a specific period, divided by the number of customers acquired during that period.

    By comparing CAC with the Lifetime Value of a Customer (LTV), product managers can evaluate the long-term value a customer brings relative to the cost of acquiring them.

    Ideally, the LTV should be significantly higher than CAC for a business to be profitable.

    For Khamis Maiouf of Book of Barbering the “CAC metric is the most telling of a product’s success”.

    “It is a very direct correlation between your marketing efforts and product integration. When you can keep your CAC low, it shows that you are providing value, the marketing spend is working, and you are gaining new customers at a reasonable rate. More than likely it will tell you that there is an opportunity to acquire new customers at even lower costs or gain more customers with the same spend.

    Either way, a good CAC number tells you you are doing well as a product and business. Tightening up the customer acquisition process can immediately impact your bottom line, and you should be constantly monitoring as your company grows.”

    Customer Lifetime Value (CLV/CLTV)

    Customer lifetime value (CLTV) is a KPI that refers to the total amount of money a customer is expected to spend on your products throughout their entire relationship with your company.

    CLTV helps in estimating the long-term value generated by customers, which means you’ll know how much your company can spend on acquiring a customer and still turn a profit.

    CLTV

    Chris Gadek of AdQuick reports tracking this key metric because it “shows how loyal customers are to your product and your brand.”

    “You can describe lifelong customers as those who continuously interact with your platforms or continually purchase products from your website at a consistent pace. And the best way for any eCommerce website to sell more is by fostering bonds with their clients to build lifelong relationships.

    Creating these connections with customers makes them feel more confident in the products they are getting and makes them even more inclined to return for your products time and time again. Put simply, aim to create a sentimental value between customer and product [to increase] business revenue and retention.”

    In fact, Gadek recommends monitoring CLV, revenue, and retention product metrics. He says that “together, these metrics can let you see who is a recurring customer, how long they have been a frequent shopper, and what it is that makes them want to keep buying your product”.

    Net Promoter Score (NPS)

    The net promoter score (NPS) is a customer loyalty and satisfaction measurement taken by asking customers one simple question: “On a scale of 0-10, how likely are you to recommend our company/product/service to a friend or colleague?”

    Based on their responses, customers are categorized into three groups:

    • Promoters (score 9-10): Loyal enthusiasts who will keep buying and referring others.
    • Passives (score 7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offers.
    • Detractors (score 0-6): Unhappy customers who can damage your brand and slow down growth through negative word-of-mouth.

    SnackMagic’s Shaunak Amin highlighted how important it is to watch the net promoter score (NPS).

    “We take great pride in our net promoter score (NPS). A single-question survey asking customers on a scale of 0-10 how likely they are to recommend our product and service generates this numerical value. 0 being ‘Not at all Likely’ and 10 being ‘Extremely likely.’ This gold standard customer experience metric helps you better understand customer perception so you can gauge their loyalty.

    But you can also use it to track scores for individual products, stores, web pages, or even staff members. Doing so provides valuable insights into what is working to gain customer loyalty and what isn’t. And conducting these surveys regularly provides a benchmark for your company to ensure continued growth in customer success.”

    Customer Retention / Churn

    Customer retention and churn are two KPIs that usually go hand in hand as they both provide valuable insights into the health of a product.

    Customer retention measures the percentage of customers who remain engaged with a product over a specific period. It’s calculated by looking at the number of customers at the start of a period, subtracting the number of new customers, and then dividing by the number of customers at the start.

    At the same time, the churn rate measures the percentage of customers who stop using a product within a given period.

    A high churn rate can indicate dissatisfaction, product issues, or better alternatives available in the market. It’s critical for understanding customer dissatisfaction and areas of your product that need to be improved.

    Customer churn overview

    Product managers should track these two KPIs to identify why customers stay or leave so that they can better guide product development.

    Furthermore, understanding retention and churn helps in refining market strategies, positioning, and targeting.

    Router CTRL’s Jeremy Clifford makes an important point when it comes to retention:

    “New consumers are wonderful on the growth charts, especially if it appears that every day brings new customers. However, you’ve got a leaky bucket instead of a great product if those clients drop off after only a few days. It’s pointless to add more people to the pool if you can’t keep them. You need a high rate of customer retention, which means that more consumers return rather than disappear altogether.”

    “Also, remember that organizations that haven’t figured out how to retain customers and have jumped on the acquisition bandwagon too rapidly will quickly lose all of their customers. Your product is useless if it doesn’t have loyal users.”

    In sum – work on your product first and then focus on retention strategies.

    Expert Insights: According to the data from our SaaS Benchmark KPIs benchmarks group with over 2000 contributors, the median value for Churned Customers was 22 for December 2023. And for an even deeper understanding, our Benchmark Groups offer additional metrics and insights, which you can access for free by simply joining a Benchmarks group.

    Churned customers

    Daily or Monthly Active Users (DAU / MAU)

    DAU measures the number of unique users who engage with a product in a single day.

    The exact definition of “active” can vary depending on the product. For example, it might mean logging in, making a transaction, or simply viewing content.

    Similarly, MAU tracks the number of unique users who interact with the product over a month.

    These metrics help product managers understand how often users return to the product.

    Users

    A higher ratio of DAU to MAU (also known as the stickiness ratio) indicates that a significant portion of the audience is using the product daily, which is a strong sign of user engagement.

    “One of the most important things to keep in mind is product engagement and its related metrics when it comes to product management,” points out Justin Berg of CV Maker.

    Berg says that his team has “been tracking DAU for all our products since launch, and it has helped us create a comprehensive report on how the user base of each product has changed over time. DAU is a metric that has helped us evaluate other metrics too, such as their stickiness.

    This is how often users interact with the product. This vital product engagement metric enables us to make strategic decisions about adding or removing specific features in the product. A DAU of 20% is considered to be pretty good.”

    Expert Insights: According to the data from our Google Analytics 4 (GA4) for All Companies benchmarks group with over 4500 contributors, the median value for Active Users was 3.13K for December 2023. And for an even deeper understanding, our Benchmark Groups offer additional metrics and insights, which you can access for free by simply joining a Benchmarks group.

    Repeat Purchase Rate (RPR)

    Repeat purchase rate (RPR) is a KPI that measures the percentage of customers who have made more than one purchase from your business.

    For product managers, this metric helps them better understand customer loyalty and how effective the retention strategies are. A high RPR indicates that customers are satisfied with the product and will likely return for more.

    This can be a sign of a strong product-market fit.

    For Jason Sherman of TapRM, “it’s becoming harder to attract and retain current customers in the retail marketplace. So, for this reason, maintaining a high repeat purchase rate is crucial as loyal customers are a steady source of revenue. And the ones who keep coming back to make purchases typically spend, on average, 3%-15% more on each subsequent order”.

    “This additional spending boosts each order’s average amount and significantly increases the customer’s lifetime value. Your RPR shows how often customers make repeat purchases.”

    So how do you calculate your RPR?

    Sherman shares that you should “first find the number of customers who placed an order, let’s say, in December. For that same month, find the number of repeat customers. Then divide the repeat customers by the total customers.”

    “To get your RPR, multiply the quotient by 100. If that percentage is 25%, that means out of 100 orders, 25 are from repeat customers. An ideal range is 20-40%. What’s more, your repeat purchase rate can compound, meaning that a 25% RPR can add 33% revenue over time.”

    As for how to grow your RPR, here’s Sherman’s advice:

    “Improve your RPR through customer retention strategies such as an optimized customer life cycle, loyalty programs, retargeting ads, and cart abandonment emails. This creates a better post-purchase experience that drives customer loyalty and increases repeat sales.”

    Not to forget, you can also tap into the fear of missing out (FOMO) to encourage repeat orders.

    For instance, share a limited-time discount with your customers only. Or curate bestselling products and offer them as a customer-exclusive surprise box.

    Remember – buyers today love good experiences. So focus on offering the best experience to increase your repeat customer, reduce churn, and boost your CLV simultaneously.

    Looking for ideas? For eCommerce, try tactics like unique (read: instagrammable) packaging and adding personalized notes.

    As for SaaS, improve experiences by making things easy for users.

    Take a page from ApproveMe.com’s Kevin Michael Gray who shares the ‘Minimum Click, Predictive Behavior’ philosophy for improving user experience.

    “While we were building our new Document Signing Experience, we brought on a product coach as lead designer who had worked at Campaign Monitor, Skype, and Atlassian. He taught us the power of ‘minimum clicks.’ In other words, your user should only be one or two clicks away from their desired destination at any time,” explains Gray.

    “We applied this philosophy to our onboarding experience. We spent nearly 6 months creating an onboarding user flow. After recreating it over half a dozen times (from scratch), we came up with a minimum click, experiential onboarding experience that is somewhat enjoyable. This was important for us, as onboarding is an overlooked opportunity by most.” 

    Product Management Dashboard Example

    What is a Product Management Dashboard 

    A product management dashboard is a tool that product managers can use to track the progress and performance of a product throughout its lifecycle and in different areas.

    Whether it’s user engagement, product development, product quality, or any other area, you can use a product management dashboard to compile all of the most relevant metrics in one place.

    This way, you have a birds-eye view of the product’s health and success without having to log into different tools and scramble through different reports to get the data.

    The exact contents and layout of a product management dashboard can vary depending on the specific needs of the product team, the type of product, and the industry.

    Here’s one example straight out of Databox’s library – the Harvest Time Project & Team Dashboard.

    Harvest Time Project & Team Dashboard

    In this dashboard, we compiled product management metrics and KPIs such as project overview, team overview, hours tracked, billable amount, and more.

    But you can customize the dashboard to fit your specific needs and add whichever product metrics are the most important to your specific organization.

    All you have to do is connect your data source, drag and drop your chosen metrics, and then visualize them with just a few clicks of a button.

    google_analytics_product_revenue_dashboard_databox

    Monitor Key Product Management Metrics and KPIs in Databox

    Keeping track of your product’s performance and how users are engaging with it is no easy feat.

    However, it gets that much harder if you’re scrapping data from multiple tools and compiling it manually in a separate spreadsheet.

    But why even go this route when there’s a much easier way to do it?

    With Databox Dashboards, the hours-long tracking and analysis process can be compressed to only a few minutes.

    It’s as simple as connecting your data source, selecting the metrics you’ll track, and then turning them into professional visuals.

    This way, you get real-time insight into everything that’s going on with your product (relevant to the area you choose to track).

    Then, you can use Databox Reporting to convey your findings to shareholders and C-level executives with sleek and simple reports that everyone will understand.

    Oh, and have we mentioned that you’ll also get free access to Benchmark Groups?

    There’s no need to rely on vague industry reports or your gut feeling anymore when analyzing whether your numbers are good. Now, you can instantly check how competitors are performing and see how you compare.

    So, if you want to streamline your product management metrics tracking, analysis, and reporting phases, sign up for a free trial with Databox and see just how simple these processes can be with the right tool.

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