Product metrics are all about decision-making. They should enable your organization to make better decisions, faster.
In this quick article, we’ll discuss the power of product metrics, how to create a North Star metric, and what product metrics mean for the success of your team.
What’s the deal with product metrics and KPIs?
Product metrics are quantifiable data points that a business tracks and analyzes to gauge the success of its product. Examples of product metrics include conversion rate, churn rate, and monthly recurring revenue. These metrics should all tie back to the product strategy.
They are quantifiable data points that an organization tracks and analyzes to measure success, not dissimilar from key performance indicators (KPIs).
Product metrics are important, as they are the common thread between different organizations at your company.
Product Managers (PMs) are typically the owner of product metrics, but it is meant to be a collaborative process. If everybody owns something, no one owns something. It needs to be cohesive.
Cross-functional collaboration is a recurring theme with PMs. Whether you're focused on data or launching new features, connecting to other people across the business is a critical function of the role.
What makes a good product metric versus a bad one?
It depends on what you're trying to track.
Churn is an example of a great product metric. What better way for someone to tell you that they're not getting use out of your product than to leave?
But it can also be considered a suboptimal product metric because if you’re looking at churn, it's too late. It would be beneficial to know that customers aren't completing their use cases well before they actually make the decision to quit.
Many teams instead look at the metrics that lead to churn—some of which a Digital Experience Intelligence solution or Google Analytics can assist with:
Sustained feature adoption: your target audience adopting a feature of your product or app by using it for an extended period of time.
Sessions per user: a group of user interactions with your product or app recorded in a given time period.
Bounce rate: the percentage of visitors on a site or app who leave rather than continuing on within the same site.
Active users: the number of customers who used a product or app within a certain period of time.
Want to take your digital experience to the next level? Let’s chat.
How do product metrics change throughout growth?
Product metrics definitely can and should change as the company grows. It all goes back to the customer and how your product is evolving to meet their needs.
As a product evolves, it’s time to decide which metrics are the most important. For instance, maybe daily active users are no longer as attractive as monthly active users. Adjust, evaluate and decide.
How do you keep metrics fresh?
Many teams pursue customer interactions as a way of keeping metrics fresh. It’s important to be in tune with what customers are doing and what the most important features are to them, along with the core problems that they're facing.
There's a lot of different metrics out there. There's probably a lot of different use cases, find the metric that is the one you hold above the rest.
To keep an eye on customer interactions, use a tool like Session Replay, where you can view user events—such as clicks, scrolling, or frustrations—into a reproduction of what the user did on the site or app.
How do you create a North Star product metric?
Making sure that you have the data needed to analyze is a good start to creating a North Star metric. String all these analyses together, and it creates the most important metric of all.
It all goes back to the customer, to understand who you're trying to serve and what you need to know to best serve them.
How does this product work best for the customer?
What are the questions that your customers care about?
How can these questions be answered with data?
Your North Star metric should be something you keep your eye on daily. As opposed to being reactionary every time you hear something is going on, you can monitor your product usage and respond appropriately.
Being data-driven with metrics is critical when aligning product marketing, engineering, or customer support teams around a North Star metric. Being able to back up why you're choosing a metric is extremely important when it comes to convincing everyone you need it.
What are the challenges in creating product metrics?
Aligning cross-functional teams on metrics is tough, but necessary.
You're not going to get alignment unless you prove that you're willing to listen to everyone who has something to say about it. Listening to people from different perspectives is super important.
Data is helpful, and it can help build conviction in yourself before you want to present an idea out there that you know is probably going to get poked and prodded from every single way. But listening to people, building that trust, and showing them your thought process for building up to a North Star metric is helpful.
When in doubt, go back to the data. Digital Experience Intelligence (DXI) is the core foundation for building product metrics that matter—and that move the needle for your team.
Ready to unearth the issues causing lost conversions (and figure out how to fix them)?
Talk to a FullStory expert about digital experience intelligence.