7 Key Metrics & KPIs That All Leading Product Managers Track
5 minute(s) read
Published on: Aug 01, 2023
Updated on: Aug 01, 2023
If you’re an aspiring professional in this field, it’s worth knowing what the top operators are looking for when fulfilling their roles, so here are just a few must-watch stats and why they matter.
Understanding the Importance of Daily Active Users
Without doubt, one of the most crucial metrics for any product manager is the count of daily active users (DAU). This index gives you a holistic view of your app's popularity and user engagement frequency.
DAUs help you effectively monitor tendencies in customer behavior over time. They also assist in developing strategies to increase app usage and engagement since it denotes whether or not they find your products valuable on a day-to-day basis.
Diving Deep into Customer Acquisition Cost
Next up it’s worth talking about Customer Acquisition Cost (CAC). CAC may sound like a straightforward concept, answering the question of how much it costs your company to bring a new customer onboard. However, comprehending and manipulating it more effectively can provide powerful insights for product managers.
It's not just about adding up marketing expenditures over a specific timeframe and dividing by the number of customers gained. You need to consider detailed expenses such as advertising costs, team wages, design outlays, and even indirect organizational costs that contribute to gaining new clients.
By accurately measuring CAC in tune with other metrics such as Lifetime Value (LTV), you gain foresight in long-term profitability predictions and enable savings on acquisition strategies right now.
Leveraging User Engagement to Drive Success
User engagement, a metric often overlooked, can be the secret driver of commercial success for your product if rightly leveraged. It looks beyond basic usage and delves into how deeply users interact with your app or software:
Frequency: How frequently do users visit and use your platform?Duration: Are they spending substantive time on your platform when visiting?Intensity: Is their interaction superficial or are they fully exploring its features?
Engagement is a manifestation of value from the user's perspective. If you observe good engagement, it shows that customers find relevance in what you offer.
Conversely, poor user engagement may suggest that changes should be made, either by improving current offerings or devising novel strategies to enhance overall appeal and experience.
Net Promoter Score: Keep One Finger on the Pulse of Your Customers' Satisfaction
The Net Promoter Score (NPS), is a straightforward yet powerful tool that gives you an immediate sense of your customers' satisfaction and loyalty levels. It assesses how likely your users are to recommend your product or service to others.
Scoring is as follows:
A score of 9-10 denotes 'Promoters,' highly satisfied customers who might essentially act like brand ambassadors.Scores 7 or 8 are reserved for 'Passives', customers who are neutral and could be swung either way.Anyone scoring under 6 falls into the 'Detractors' category, indicating discontent.
Ultimately, NPS offers direct insight into customer experiences with your product or service, pointing out areas where improvement is needed while still acknowledging what's working well already.
Churn Rate: Interpreting Customer Departure Patterns
Discovering the Churn rate is a valuable counterbalance to more optimistic metrics like DAU or NPS. It indicates the percentage of customers you lose within a certain timeframe, shedding light on those who started as engaged users but eventually lost interest:
High churn rates may suggest big problems with user retention.Low churn rates indicate that your product continues to meet users' needs.
Churn patterns can guide strategy adjustments tailored at enhancing customer satisfaction and minimizing attrition, thus contributing to sustainable growth and goal achievement.
Lifetime Value Analysis: Predicting Long-Term Profitability from a Single Customer
LTV measurement allows product managers to project the revenue contribution of an average customer over time. It applies to everything from dating apps to ecommerce platforms, and helps by explaining user behavior and purchase patterns. It also allows for the development of targeted marketing campaigns, increasing profitability.
Analyzing the LTV enables setting realistic budgets while achieving business goals. It is crucial in identifying which customers generate more value, helping to refine targeting strategies, enhance retention efforts and ultimately ensure long-term financial success for your product.
Product Qualitative Feedback and Its Impact on Development Strategy
While metrics provide solid data, qualitative feedback reveals actual user experiences. This can take the form of customer reviews or direct input via surveys. It’s valuable as it offers insights into what users appreciate about your product and where they face difficulties.
This first-hand feedback should feed directly into shaping your development strategy, inspiring improvements to existing features or the creation of new ones. In turn, this allows your product to evolve in line with user expectations and needs, fostering increased satisfaction and engagement.
It’s not enough for product managers to simply track these KPIs. They also need to act on the insights they glean, which is only possible if you understand not just what’s being measured, but why.Do you want to own a game? Click here!