The world of Product Management has greatly matured over the years, with the discipline becoming more strategically important for many companies. You’ll notice product based KPIs and Goals starting to appear within company strategic plans as the performance of these products is so closely tied to that of the company.
So what are the types of KPI you may track if you’re running a product? In this article we'll look at:
- Product Business Performance KPIs
- Product Development KPIs
- Product Usage KPIs
But there are also certain KPIs that are specific to Product, such as Team Velocity. We’ve pulled out the most common examples in the list below…
Product Business Performance KPIs
As there’s always a strong link between product performance and business performance, there a number of overlapping financial KPIs and customer based KPIs that you should be reviewing running a product. These can include...
Monthly Recurring Revenue (MRR)
Monthly recurring revenue is a key metric is you’re running any sort of SaaS or subscription-based product. It’s the revenue that is coming into the business from your contracts and is a key metric when used to measure business performance.
Customer Lifetime Value (LTV)
Your Customer Lifetime Value is the amount of revenue each customer will generate in their relationship with you. Use of upsells or renewals can help to move this metric upwards.
Customer Acquisition Cost (CAC)
Your CAC is important when seen in the context of your LTV. You want to make sure the CAC is lower than the LTV and, over time, should see a decrease in the CAC. It’s commonly part of the Marketing KPIs you would measure for a business.
Number of New Users
Measuring the number of new users or customers is a key metric for both your product and marketing teams. It’s measured daily, weekly or monthly.
% User Base Growth
This KPI focuses on your overall user growth on a daily, weekly, monthly or annual basis. It’s a key indicator into the effectiveness of both your marketing and your product.
% of Users who are New
Similar to the above KPIs, this metric looks at growth by understanding what percentage of your total audience is new within the period you are measuring.
Product Development KPIs
The development of your product has a set of unique KPIs relating to team performance. Here are some examples…
Team Velocity is a measure of the amount of work your product team have done within a sprint. It’s calculated by the number of points in the stories completed and usually measured per sprint. This provides over time an idea of how effective the team are being.
Type: Duration or Percentage
The Release Time KPI measures if there are delays to the releases provided. It can be tracked as either the amount of time lapsed between a planned release date and actual, or as a percentage of releases that are delayed.
Product Performance KPIs
Any Product KPI Dashboard should look at how your customers interact with the product. Some example KPIs you may track include…
Daily Active User
Type: Number or Percentage
This metric helps understand the engagement of your product or service by establishing the number of daily active users or the percentage of total users who are active. Active is differently defined per organisation, but usually involves measuring who is interacting with your product or service. Sometimes this KPI is measured Monthly.
How long a user interacts with your product can be an indication of engagement and the chance of churn. This KPI measures the average duration of a session.
The time it takes to onboard a customer into your product will impact your margins, so it’s worth tracking and working on ways to reduce the onboarding cost.
Type: Percentage or Number
If you’re any sort of subscription-based product then Customer Churn is a vital statistic. Often measured monthly or quarterly, this KPI looks at how many customers leave your system. It can be represented as a % of total audience or as a number.
The opposite of Customer Churn is the Retention Rate. This is the percentage of customers that are still using your product and so the higher, the better!
Customer Satisfaction Score (CSAT)
Customer Satisfaction is a measured way to score how satisfied a customer is with the product or service. It usually involves a score range of 0 – 100 and one key question which is: How satisfied are you with the product/service that you have received?
Net Promoter Score (NPS)
NPS is a way to measure how many customers are willing to recommend your product or service to others. It works by asking a single question: How likely is it that you would recommend our company/product/service to a friend or colleague? The user responds by answering between 0 – 10.
- Users who respond 9 and 10 are Promoters
- Users who respond 7 or 8 are considered Passive
- Users who respond 0 – 6 are Detractors
The NPS Score is measured by taking the Number of Promoters – Number of Detractors.
App Store Rating
Type: Percentage or Number
If your product sits within an App Store of some sort, such as Apple, Google or a tech ecosystem like Xero, then you may well have a rating associated to it. This rating can be used in conjunction with CSAT or NPS to determine product satisfaction.
Type: Percentage or Number
Similar to App Store Rating, you may be listed on review directory sites. If you are, then tracking your review rating may be another insight into product performance. In both this KPI and the App Store Rating, remember to keep in mind the prose feedback that will give you further insight.