The 12 Most Important Product Metrics to Measure
”In God we trust. All others must bring data.” ~ W. Edwards Deming
Football is a very popular sport in Nigeria. Almost all kids in Nigeria play the sport at some point in their lives.
There are two “types” of football that we played growing up: the street kickabout where no one is keeping scores, and the “proper” football game where we keep scores and the loser leaves the pitch for another team.
The game is more interesting and the competition fiercer when we keep scores. So, it is in product management. What is product management without measurement?
How do you know you are making progress?
How do you know what to improve upon? What to stop doing and what to do more of? How will you know that progress is being made and that they’re building something worth building?
Measuring the right metrics is not just for tracking progress on your product. It is also for motivating your team as well as showing potential investors that you are onto something great!
While building Africa’s first fully digital bank, my team and I tracked different things and celebrated our small (and not-so-small) wins. I recall the excitement on the floor on that monumental day when we successfully opened a standard savings account remotely! For context, accounts were being opened remotely in Nigeria before then but via USSD (Unstructured Supplementary Service Data) strings. This means that the customer would still have to walk into a physical bank branch to submit the regulatory document. What we built allowed users to open an account remotely and submit their document right on the app; eliminating the need for physical visitations.
Since no two products are the same, you have to sit down with your team and agree on what success means, and how to measure that success.
“If you don’t collect any metrics, you’re flying blind,” says Scott M. Graffius
My area of specialization is in digital products, so some of the metrics I listed below may not apply to you if you are managing physical products. The list below is supposed to serve as a guide.
Here are 12 of the most useful metrics to track for your product.
- Daily/Weekly/Monthly Visitors- How many users visit your platform on a daily/weekly/monthly/etc basis? You may decide to track unique visitors or repeat users. Compare this over a period of time and make sense of your growth or decline
- Daily/Weekly/Monthly Signup Rate- Of the total number of visitors to our platforms (or the number of app downloads) how many go on to sign up? What is our visitors’ bounce rate? How many downloads did you record in the past week? How many signups? How many drop off and at what point in the signup journey do they drop off the most? That should reveal something to you
- Average Time Spent on your Platform- typically, the higher the time spent on your platform/app/etc, the better. This increases the users’ engagement with your product. The more time people spend on your platform or with your product the more likely they are to return because they’d feel like they have made some investments on your platform. Facebook is more addictive than LinkedIn because people spend more time there than on LinkedIn
- Number of Daily/Weekly/Monthly Active Users- First of all, you need to define who an active user is. Then track how many of your total users return on a daily/weekly/monthly basis. One of the biggest confusions I have faced in product management is diverging definitions of who an active user is. Let me give you an example. When I was managing a financial product for a bank, there were 3 definitions of what an active account is. The regulator, the Central Bank of Nigeria, defined an active account as someone who has done a customer-induced financial transaction in the last 6 or 12 months depending on the account type. Management of the bank had a separate definition while the Product and the Engineering Team had theirs!
- Customer Conversion Rate- Not all users who sign up end up performing your desired action, say, make a purchase. So, track the percentage of your users who take your desired action
- Daily/Weekly/Monthly Retention Rate- How many of your users do you retain on a daily, weekly, or monthly basis? It is easier AND cheaper to retain an existing user than to acquire a new one!
- Net Promoter Score (NPS)- While this is a very subjective metric, it is important to track, through interviews and surveys, how your users feel about your product. How many of them are willing to recommend you to their family and friends?
- Customer Acquisition Cost (CAC)- How much does it cost us to acquire a customer? Are we spending more to acquire customers than we can ever recoup? Refer to №6 above.
- Average Revenue Per User- Track how much you make per user and compare that with how much you spend acquiring that user. You might be shocked!
- Customer Lifetime Value- This is the total of all the revenue you could make from a user before the user stops using your product, moves over to a competitor, or dies.
- Feature Velocity- It is important to measure how quickly you develop features/products and launch them. A good product that is late to the market is useless.
- Feature Quality- Measure the quality of our products/features to ensure we do not sacrifice quality on the altar of speed.
How many rollbacks do we record per feature release?
“If you don’t collect any metrics, you’re flying blind. If you collect and focus on too many, they may be obstructing your field of view.” ~ Scott M. Graffius
Hope you found this a useful guide
Feel free to reach out to me: nnamdi.azodo@gmail.com
