Top 10 Product Management Metrics That You Must Track

The product management metrics are critical for guiding and modifying at all phases of the product development process. Product managers may use it to evaluate engagement, feature usage, user experience, and, of course, financial success.

If you want to maintain a competitive edge and provide value to your existing and future customers, you must define, measure, and track the right metrics for your company.

Here’s an ultimate guide to critical product management metrics that will help you become a more successful product manager.

Customer Churn Rate

What is Customer Churn Rate?

Customer churn rate is the percentage at which a company’s customers cancel their subscriptions.

How to calculate?

The easiest route to calculate customer churn rate is to divide the number of users you lost over a time period by the number of customers you began with during that time period.

Why it is important?

Customer churn is a crucial indicator to watch since losing clients means losing revenue and most SaaS businesses depend on subscriptions. Moreover, acquiring new customers cost a lot more than retaining current customers.

How to use it?

Customer churn rate can reveal a lot about customer happiness and preferences.  You can assess the churn rate after offering a new subscription plan or implementing a new feature. It will make it easier to determine whether or not the changes were reasonable.

To better understand why your customers churn, you can use our free survey tool and create churn surveys to ask why they are canceling their subscriptions.

Revenue Churn Rate

What is Revenue Churn Rate?

The revenue churn rate is the rate at which a corporation loses revenue due to lost customers or subscriptions.

How to calculate?

The easiest route to calculate the proportion of revenue that has churned is to divide the monthly recurring revenue (MRR) you lost that month — minus any upgrades or increased money from existing customers — by your total MMR at the start of the month.

How to Calculate Customer and Revenue Churn Rates | Grow.com
grow.com

Why it is important?

While considering business performance, it is more advantageous to focus on revenue churn than customer churn. You can track the changes in terms of revenue since it is beneficial for preparing future plans.

How to use it?

You may compare revenue churn and customer churn to evaluate if retention is constant throughout the client base, if modest customers experience greater turnover, or if big clients are more vulnerable.

As a result, you may monitor overall consumer health in a variety of ways. You can also avoid over-reliance on a single metric, increasing your chances of detecting problems in the dataset before they become more visible and harmful.

MRR

What is MRR?

Monthly Recurring Revenue (MRR) is the number of predictable earnings that a business may forecast to obtain every month. MRR is crucial to assess overall business performance and cash flow.

How to calculate?

The easiest way to calculate MRR is to take your Average Revenue per User (ARPU) on a monthly basis and then multiply it by the total number of users in a given month. The formula for calculating MRR is:

What is MRR: Definition, formulas, and ways to grow MRR | Snov.io
snov.io

Why it is important?

The monthly recurring revenue model allows your company to predict its future cash flows and budget. MRR also enables you to control and manage the growth of your business.

How to use it?

It’s a valuable metric for tracking a company’s present health, and it can be very useful in SaaS organizations that operate on a subscription-based model. MRR is easy to compute and predict because you don’t have to worry about one-time sales after obtaining existing customers.

Retention Rate

What is Retention Rate?

Customer retention rate (CRR) is the percentage of customers that remained with the firm after a given period of time. You can base your estimations on the number of app downloads or initial logins.

amplitude.com

How to calculate?

Customers at the end of the calculated period – New customers / Customers at the beginning of the calculated period x 100 = Retention Rate

Why it is important?

It’s a crucial indicator for businesses since it demonstrates the user’s degree of engagement, interest, and loyalty. While it’s high, it indicates that consumers use your service on a frequent basis. Meaning that the company has a low churn rate.

How to use it?

When your customer retention rate rises, you can simply predict if and how long you will be able to keep new clients. In the situation where it decreases, you should keep your eyes skinned on the new competition or a significant flaw with customer support.

Bounce Rate

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https://www.searchenginejournal.com/website-bounce-rate/332439/

What is Bounce Rate?

The bounce rate may be the percentage of people that visited only one page of a website or app before leaving.

How to calculate?

The bounce rate of a website is derived by dividing the number of single-page sessions by the total number of sessions on the site.

Why it is important?

The bounce rate helps you monitor user activity. Tracking and analyzing their activity allows you to better understand how to tailor your product to lower this number while increasing user attention.

How to use it?

Bounce rate is significant since they might indicate whether or not the page content is relevant or perplexing to your site visitors. Consider that you have a high bounce rate on the first page of your site, it shows that people are only looking to that page and maybe leave after.

NPS Scores

What is NPS?

A net promoter score is a tool metric that businesses use to measure the quality of customer service.

P.S: You can use our free survey tool to track your NPS!

How to calculate?

Subtracting the proportion of detractors from the percentage of promoters is the easiest method to calculate NPS.

Why it is important?

A net promoter score is a tool metric that businesses use to measure the quality of customer service. It is very useful, especially in comparison with its competitors.. Organizations can use it to find solutions to various problems, to improve the customer experience, or to identify and guide loyalty trends.

How to use it?

Using the NPS metric motivates employees to offer more value to the business culture, to react faster to incomplete or erroneous situations, regardless of the type. At the same time, this metric can be used to improve the overall experience of customers.

CSAT Score

What is CSAT Score?

CSAT Score is the value that represents a user’s overall level of content or discontent with a certain product or service feature. Typically, businesses want customers to score a product or service on a scale that has been determined.

How to calculate?

To calculate CSAT, divide the total number of replies by the number of pleased customers (those who ranked higher).

Why it is important?

You can comprehend how clients see your customer service. As a result, CSAT ratings are an excellent predictor of customer loyalty and brand advocacy. Both of those factors have a relative impact on your sales.

How to use it?

You can use the CSAT metric to track user feedback and satisfaction during the entire process that the customer has with the business and to decide on the necessary arrangements.

Cohort Retention

What is Cohort Retention?

Cohort retention is a metric that is used to measure if a specific group of customers is inclined to maintain using your product or paying for your services in the long run.

How to calculate?

You can use many tools that calculate Retention with Cohort tables if you provide the necessary data. Three kinds of data are obligated to fulfill a cohort analysis to measure client retention rate:

  1. Who are you tracking?
  2. Date of registration
  3. Metric value on all consecutive dates

Before doing a comparison, you must combine this information in a SQL query and add it as a custom table to the data source.

Why it is important?

This metric makes it simpler to predict future user behavior based on current data and identify features, activities, or adjustments that keep consumers coming back.

How to use it?

You can use cohort retention not only to understand how retention might vary and if it is depending on when users are recruited but also to analyze the change in the influence it made on a product’s retention rates over time.

Number of Support Tickets

What is Number of Support Tickets?

The number of Support Tickets is the proportion of an overall number of help requests in your support box.

How to calculate?

Some of the client numbers that reached your support channel and therefore, waiting to be answered.

Why it is important?

This metric will track how many customers have asked for assistance over your support channel waiting for a response. The number of support tickets may be very helpful in providing you with a better understanding of how your product is functioning and potential changes that can be made.

How to use it?

You can adapt this metric to count every support ticket that has been answered by each one of your customer service employees, and see how many non-replied support tickets there are left.

Average Time To Respond

What is Average Time to Respond?

The average time to respond metric is the rate of how long a customer needs to wait for an answer to a query, regardless of its quality.

How to calculate?

You can divide the total time taken to respond during the selected time period by the number of responses in the selected time period in order to calculate the average time to respond.

Why it is important?

It will be useful in determining the site’s or application’s efficiency and user happiness. It also helps you to comprehend how it may assist your team in developing more responsive and customer-friendly apps and services, ultimately leading to an increase in consumer loyalty.

How to use it?

It can be used to determine if software or websites fulfill the fundamental demands of their users and are responsive enough to be supplied as a final product. Be careful about your test parameters, it is always better to know what you’re measuring since it can construct a control for your variables.

Time in app

What is Time in App?

Time in-app, as the name implies, is the time a user spends in your app over a specific period of time.

How to calculate?

In order for time in-app to be calculated, the purpose and form of use of your application are very important. If the application requires daily usage, the duration of all in-app activities performed every day should be recorded, while in an application that requires monthly usage, it makes more sense to use in-app activity time calculation tools based on user and process interval.

Why it is important?

With this metric, you can see what drives users and what attracts users’ attention more by considering the changes in the time spent by users within the application based on changes made to the application.

How to use it?

You can use this metric, which shows the trend in users’ in-app usage times, to determine whether your customers are spending more time using your product over time, which is a leading indicator of high retention rates.

Feature Usage

What is Feature Usage?

Feature usage is a metric that focuses on user behavior toward a specific product feature rather than the total product. This metric can also span a rather broad range of metrics including total feature users or total users except for feature users.

How to calculate?

There are many ways to calculate feature usage, in this article I will be providing the basic and most used way to calculate it. First, you need to calculate the total number of uses per day. Later, you need to determine the total number of Unique Visitors. Finally, you can take the percentage of feature users out of product users.

Why it is important?

In terms of increasing retention, conversion, and engagement rates, it is critical to aggregate feature usage analytics.

How to use it?

When you experience a significant change in the demand for a specific product, you can use this metric to see what affects your users’ behavior.

Free Trial Conversion Rate

What is Free Trial Conversion Rate?

Free Trial Conversion Rate is the proportion of users that switched to a paid account after completing the trial period. It allows you to determine the number of individuals who are interested in the service enough to subscribe to it.

How to calculate?

You can divide the number of trial-to-paid users by the number of trial users to calculate it.

Why it is important?

This indicator assists you in determining whether your product provides genuine value to your consumers and whether they are willing to pay for it. The greater your trial-to-paid conversion rate, the faster you will expand and the cheaper your client acquisition cost will be.

How to use it?

The ultimate purpose of using free trials to acquire new customers is to increase the number of paid customers. When you want to analyze the performance of your program by looking at how frequently customers upgrade from a free plan to a premium plan, this statistic will give an easy way to rapidly calculate how many users like your product enough to pay for it.

Tools To Use

HockeyStack

HockeyStack is an end-to-end analytics tool for SaaS companies. It unifies marketing, revenue, sales, and product data into one dashboard with no code so that you can understand what really drives revenue at your SaaS. It’s completely no code, and it doesn’t require any setup.

hockeystack.com

HockeyStack has one-click integrations with Hubspot, Stripe, and Paddle so that you can connect your existing data and answer questions, such as:

  • What is the average LTV of a blog post?
  • Which marketing channel bring the most engaged users?
  • What is the demo close rate of my blog posts?
  • What is the average churn rate of users who signed up from a blog post?
  • What are the common sales objections of users who signed up from my ad campaigns, alternatives blog posts, or top-of-the-funnel content?

and many more.

Main features HockeyStack offers are:

  • Create custom dashboards using all marketing, revenue, product, and sales metrics with no code
  • Goals and funnels
  • Insights
  • Marketing attribution
  • Surveys
  • Step-by-step user journey

If you want to see HockeyStack in action you can check out our live demo and schedule a demo!

Profitwell

ProfitWell is a web-based firm that offers business intelligence solutions to corporations and small enterprises. It has a software platform that focuses on marketing, pricing structure, marketing analytics, saas metrics, and positioning. Patrick Campbell created the firm in 2012, and it is headquartered in Boston, Massachusetts.

Profitwell’s features can be listed as follows;

Customer Information

  • Customer Profiles
  • Customer Segments

Predictions

  • Upsell Opportunities

Platform

  • Reporting & Dashboards
  • API & Integrations
  • Notifications
  • Scalability
  • Data Security
  • Performance & Reliability
  • User, Role, and Access Management

Data Sources

  • Internal
  • External
  • Consolidation

Analysis

  • KPIs
  • Dashboards

Profitwell Canva Use Case

Canva utilizes Profitwell to more efficiently allocate resources by focusing on the biggest point of leverage for their business. Profitwell also assists Canva in comparing their LTV, Retention, Quick Ratio, and Churn to comparable firms currently and over time.

You can also read Chartmogul vs Profitwell: Full Breakdown of the Two SaaS Revenue Tracking Tools to learn more.

Mixpanel

Mixpanel is a firm that provides corporate analytics services. It monitors user interactions with online and mobile applications and provides tools for specific audiences. Suhail Doshi and Tim Trefren created Mixpanel in 2009 and are situated in San Francisco, California.

Mixpanel’s features can be listed as follows;

Metrics

  • Engagement
  • Entry and Exit Pages
  • Standard Event Tracking
  • Custom Event Tracking
  • RetentionReturn
  • ConversionsFunnels

Reporting

  • Real-Time Reporting
  • Trending
  • Segmentation
  • Custom Reports and Dashboards

Other

  • User Data

Administration

  • API / Integrations
  • Performance and Reliability

Mixpanel SkyScanner Use Case

Skyscanner, a travel search service, uses Mixpanel to gain deeper user insights that can be readily shared with teams throughout the world, eventually helping to boost bookings while enhancing the company’s return on investment.

Pendo

Pendo was formed in 2013 by ex-Rally, Google, Cisco, and Red Hat employees to provide an easy approach to understand and act on what genuinely drives product success. Product teams may use Pendo to assess product use, collect feedback, monitor NPS, onboard customers, and announce new features in the app—all without the need for technical resources.

Pendo’s features can be listed as follows;

Metrics

  • Sessions – Digital Analytics
  • Engagement
  • Entry and Exit Pages
  • Standard Event Tracking

Reporting

  • Real-Time Reporting
  • Trending
  • Retroactive Reporting
  • Segmentation
  • Custom Reports and Dashboards

Administration

  • Performance and Reliability
  • User, Role, and Access Management

Product Analytics

  • Account-Level Analytics
  • User-Level Analytics
  • Segmentation
  • Funnels

Pendo IHS MARKET Use Case

The iLEVEL solution from IHS Markit provides private market investors with a cloud-based platform that automates data gathering, portfolio monitoring, analytics, valuation, and reporting. They employ several Pendo capabilities, such as in-app messaging, to convey updates to users, ensuring that their clients are aware of the most recent and exciting features accessible to them. In addition, they analyze Pendo product usage statistics to focus on unused and obsolete components of the platform and determine what to retire.

You can check out our Pendo vs Walkme article if you are trying to decide on an onboarding tool for your SaaS!

Conclusion

Metrics are essential for product managers since they serve as the foundation for any Business Case. Setting measurable objectives and targets for their product line, as well as analyzing various elements that influence a product’s success or failure, will be much easier with these measurements. These KPIs also serve as a basis for making choices about product strategies and roadmaps.

It is critical to assess the metrics that are being utilized on a regular basis. These parameters may be measured using a variety of technologies. Profitwell, Pendo, and Mixpanel are among the most well-known and trustworthy tools.

FAQ

What kind of metrics matter to product teams?

Product metrics are key points for businesses’ can monitor and analyzed to determine the performance of their product. Customer & Revenue Churn Rate, MRR, Retention Rate, Bounce Rate, NPS & CSAT Scores, Cohort Retention, Number of Support Tickets, Average Time to Respond, Time in App, Feature Usage, and Free Trial Conversion Rate are some examples of product metrics.

What are the categories of product metrics?


Reach
The total number of persons who have utilized the product in the most recent time period is referred to as reach. It is critical since it displays the maximum number of users who potentially become new customers, either naturally or through a re-marketing campaign.
Activation
Activation metrics can be considered as the first stage in preparing a new user to become an active user. These metrics provide valuable data about the early stages in the process of a customer’s journey.
Active users
Active users are those who have recently completed a significant action and received value from your product. It gives you a well-prepared glimpse of how many individuals are benefiting from your product. Is it falling or rising?
Engagement
The number of critical actions done is defined as engagement. With this rate, you can see how many individuals you can genuinely reach.
Retention
Retention is a measure that indicates whether or not your product will last. This data can help you provide more sustainable and desired products and services.

How do you measure a successful product manager?

A product manager’s performance may be judged by leadership skills such as:
– Whether the manager can rally people behind a common vision;
– Whether they are creative and have strong ideation abilities;
– Whether they are prepared to work in a continually learning atmosphere; -Whether they are hesitant to test their method;
– Whether they are good listeners or not.