Metrics are a beautiful a part of being a product supervisor. They’re the supply of insights, hypotheses, validation, and understanding. However they are often all-consuming and complicated for those who don’t know the place to focus your power.
On this information, we’ll introduce you to numerous varieties of product metrics and make it easier to decide which of them it is best to give attention to as a product supervisor, relying in your product and enterprise.
Desk of contents
Kinds of product metrics
Product managers and groups encounter a variety of metrics which might be both straight associated or adjoining to product. A few of the commonest classes embrace:
Monetary metrics
Monetary metrics embrace something associated to cash: income, gross sales, margins, working prices, and so on.
The product is an element right here, however removed from the one issue. If the product isn’t promoting effectively or making a lot cash, it may very well be as a result of poor gross sales, advertising, content material, pricing, and/or product.
Engagement/utilization metrics
Something associated to utilization: month-to-month energetic customers, time spent in app or on website, pages views, churn, abandonment price, activations, and so on.
The product is a significant factor, however advertising and gross sales are additionally essential right here, as is design.
High quality metrics
High quality metrics embrace efficiency, bug charges, scalability numbers, reliability, compliance, safety, and so on. Usability can be one thing I might think about a top quality metric — time to finish a job, for instance.
The product is the one issue on the subject of high quality metrics.
Influence metrics
Are your merchandise having the meant influence on the folks utilizing it? For those who intention to tell folks, are you doing so? For those who hope to make folks extra productive, are they? In case your product is designed for leisure, are your customers really entertained, or simply distracted or compelled?
Once more, the product is the one issue right here.
Sentiment metrics
How do folks really feel concerning the product? Would they advocate it?
Internet Promoter Rating (NPS) is the primary metric to trace right here. Evaluations on the app retailer or TrustPilot are one other. Churn price is essential, too. These metrics are principally product-related however can be impacted by buyer help, buyer success, and gross sales.
So much goes into sentiment, and product is a significant factor, along with buyer help and success, value, assist content material, and so on.
Advertising and marketing metrics
Advertising and marketing metrics which might be related to product managers embrace buyer acquisition value, promoting metrics equivalent to value per click on and click-through price, all issues web optimization, conversion charges, and so on.
Pirate metrics (AARRR)
AARRR metrics — also called pirate metrics as a result of saying them makes you sound like a pirate — are price calling out due to their notoriety and broad use.
The acronym stands for acquisition, activation, retention (reverse of churn), income, and referral. Generally you’ll additionally see this written as AAARRR, with consciousness accounting for the additional A.
These metrics are a mix of promoting, monetary, utilization, and sentiment metrics and signify a funnel. This framework is smart for a lot of merchandise, however not all.
Qualities of product metrics
It’s essential to consider the qualities of the metrics themselves so you possibly can know what to do with them. When evaluating metrics, product managers ought to think about whether or not they’re:
Qualitative or quantitative
Essentially the most fundamental high quality of a metric is whether or not it’s qualitative or quantitative — that’s, is it objectively measurable or is it subjective and self-reported? NPS appears quantitative as a result of it’s a quantity, however it is usually qualitative as a result of it represents sentiment and due to this fact can fluctuate.
It’s essential to know the distinction between qualitative and quantitative metrics.
A/B testable
If one thing is quantitative, the following query it is best to ask is whether or not or not it’s A/B testable.
All quantitative metrics are technically A/B testable, however the experiment could run for a very long time to get a solution for some metrics, or it’s possible you’ll not have the suitable infrastructure in place, which might make a metric successfully not A/B testable. Whether it is effectively A/B testable, focus might be very tempting, however it isn’t at all times the suitable factor.
Once more, A/B testing is a important idea for PMs to know, so it’s price taking the time to study.
Main or trailing
A number one indicator is one thing that may assist you determine when to launch. A trailing indicator that you must wait and see. Most metrics are trailing indicators, that are onerous to attribute.
The one metrics which might be main indicators are high quality metrics, which makes them very highly effective and essential to a product supervisor’s day-to-day.
Which metrics ought to product managers give attention to?
As with most issues in product administration, the reply is — drumroll please — it relies upon!
Let’s begin with some tremendous widespread metrics which might be usually chosen as key efficiency indicators (just a few metrics which might be decided to matter most) or the one metric to rule all of them (a single metric that issues greater than every other):
We’ll additionally define the pluses and minuses of specializing in these metrics from a product perspective.
Income
TLDR; Consciousness and involvement are key, however income shouldn’t be a spotlight.
Income might be the most typical metric product managers are requested to give attention to. Nevertheless, my recommendation is to keep away from specializing in it too intently.
Don’t get me flawed — it makes lots of sense for gross sales to zero in on income and for it to be a KPI for the corporate. And the PM must be deeply concerned with pricing and gross sales blockers. However income is a trailing indicator and has means too many variables to be helpful for product managers to give attention to straight.
One other drawback of specializing in income is that, when it’s used as a definition of success, it’s then usually used for prioritization. And as a lot as folks will faux they’ll understand how a lot cash a function will generate, this isn’t knowable. I’ve seen this method result in inflated predictions to get options greenlit.
A last drawback is that you could be find yourself forgoing long-term, really revolutionary options and merchandise that gained’t straight influence income, finally placing the well being of the corporate in danger.
Engagement
TLDR: There are good focus choices amongst engagement metrics, however watch out!
I might simply write a whole weblog on engagement metrics — this can be a deep space that you’ll undoubtedly immerse in as a PM.
As soon as once more, engagement metrics are trailing indicators of success, which implies that enhancing engagement isn’t essentially a superb factor. It additionally implies that if engagement doesn’t enhance, it isn’t essentially a nasty factor.
Take into account the instance of reserving a reservation for a restaurant in a maps software. This can be a cool function that each Google Maps and Apple Maps permits you to do. But when folks aren’t considering to make use of their maps software to determine the place to go and as an alternative are targeted on attending to the place they’ve already determined to go, the preliminary engagement for such a function goes to be very low.
This doesn’t imply it was a nasty concept or that the function wasn’t profitable; it simply implies that customers must evolve their fascinated with what the maps software is for. They might not ever do that on their very own, however with the assistance of excellent advertising and the help of different options (equivalent to native guides), this could change over time.
The opposite canonical instance is scrolling on Fb and Instagram scrolling. There’s a level at which steady scrolling makes folks more and more much less comfortable — the notorious doom scroll. So, for those who as a PM are targeted on growing the period of time spent scrolling the newsfeed, it’s possible you’ll be negatively impacting your customers.
All that stated, used effectively, engagement metrics are a beautiful factor so long as you’re balancing this knowledge with different data (qualitative metrics like NPS or consumer surveys focused at your influence metrics). They’re quantitative and fairly often A/B testable, which makes them enjoyable to give attention to for the entire group. Decide a few engagement metrics very rigorously and take into consideration why they could be telling you one thing totally different than what you assume earlier than you determine on which of them to make use of.
Sentiment
TLDR: Sentiment metrics are essential, however they shouldn’t be used for decision-making or defining success.
A sentiment metric measures how your customers really feel about your product. Internet Promoter Rating is essentially the most generally used sentiment metric, however Superhuman’s product-market match metric is rivaling NPS when it comes to reputation for know-how merchandise. NPS measures whether or not your customers would advocate your product. Product-market match determines how upset your customers could be in the event that they couldn’t use your product anymore. Sentiment itself is just the start.
For those who see a drop in NPS, that you must look deeper at what’s behind it. It may very well be product-related, however it might not be. Doing evaluation on the qualitative responses that you simply obtain (for instance, together with s query on the finish equivalent to, “Are you able to inform us extra about why you rated us this fashion?”) is an important duty of the product supervisor. However this qualitative knowledge doesn’t essentially transfer simply and is certainly not A/B testable, so that you shouldn’t give attention to it day-to-day.
Advertising and marketing
TLDR; Advertising and marketing metrics are nice to give attention to if in case you have an idea of conversion within the product.
As a product supervisor, for essentially the most half, it is best to perceive however not give attention to advertising metrics. The exception to that is conversion price. That is commonest if there’s something the consumer actually buys in your product, however might additionally come into play for a extra delicate definition of conversion, equivalent to reserving a trip in Uber.
There may be overlap right here with advertising as a result of if somebody involves your app or website that isn’t the “proper” buyer, conversion will probably be low. On this case, it isn’t the product’s fault; it’s advertising’s fault. Or, if the “proper” buyer comes they usually don’t purchase something, the issue could also be associated to both the provision or the product.
You probably have entry to them, conversion charges are essential to give attention to as a PM, in live performance with advertising and whoever is accountable for provide.
Why influence is crucial metric for product managers to trace
Influence metrics, in my expertise, aren’t usually outlined, not to mention measured. These are metrics that both qualitatively or quantitatively measure the influence you propose your merchandise to have. For those who’re actually fortunate, a top quality metric could double as an influence metric.
For instance, in maps, it’s knowable whether or not somebody misses a flip. This can be a high quality metric (clearly dangerous) and in addition an influence metric (maps intend to get you to the place you’re going as effectively as attainable). Or, in search, if a consumer clicks on a search consequence instantly, that result’s on the high of the listing. In the event that they don’t do a subsequent search, you might be fairly darn sure the consumer discovered what they have been in search of and your search software did what it meant.
Typically, although, you aren’t that fortunate. If the consumer of the Fb newsfeed spent 20 minutes in a day taking a look at Fb, you don’t know in the event that they linked to others on the finish of the day. If somebody watched a video on YouTube about studying to hula hoop after which spent an hour watching cat movies, you don’t know if that actually met their wants that day.
In my case, as I’m presently within the enterprise of promoting retreats, I don’t know if the consumer got here away feeling remodeled. Even when they are saying they did in a overview, I don’t know if that transformation was really lasting. Influence metrics are designed to deal with this.
Influence metrics are trailing and principally not A/B testable (Fb notably does attempt to survey customers whereas within the app and makes use of responses as an A/B). Even so, influence is, for my part, crucial metric of all.
I don’t assume any of us are constructing know-how simply to generate income for ourselves and the corporate; we additionally wish to make a distinction within the lives of our customers. No matter that distinction is, be it serving to them be extra productive, extra linked, extra calm, extra entertained, it may be measured by way of buyer interviews and surveys. And realizing that you’re enhancing that influence might be some of the efficient methods to advertise collaboration and innovation amongst your group.
Conclusion
Metrics are a serious facet of being a product supervisor, however all that knowledge can flip into an infinite sea of data for those who don’t know the right way to use it.
As you progress by way of your product administration profession, you’ll naturally proceed to develop experience with metrics. I hope you’re taking away from this information just a few issues so as to add to your toolbox and really feel impressed to look extra carefully on the metrics you’re utilizing in your day-to-day roles.
LogRocket helps you communicate the identical language as your builders
Thanks for studying about Product Ops. That is an advert for LogRocket.
Undecided what we do? We simply gained Product Faculty’s “Proddy” for finest Heatmaps & Session Replay, beating out lots of nice options that you simply in all probability already use. We make it a lot simpler so that you can work together with your builders by diagnosing bugs and catching revenue-killing snags in your app’s UI.
See what you are lacking – attempt LogRocket at this time.
