34 Product Management KPIs You Really Should Know About

I’m not going to waste your time explaining what a product management KPI is. KPIs (key performance indicators) as a concept are nothing new. In fact, they’ve been around in some form or other for thousands of years. As a product manager, you’re probably well aware of their existence. I’m not here to teach you how to suck eggs, but I am here to point out the best eggs for sucking.

You’re probably here because you’re trying to get your head around how specific product management KPIs can help you. You want to improve your processes, your understanding, your finances, and your user experience. Good move, friend. When it comes to KPIs, ignorance is absolutely not bliss.

Of course, KPIs by themselves aren’t the be-all and end-all. They’re part of a larger system of product management metrics and goals, and tie in to your Objectives and Key Results. But if you’re not tracking the right KPIs, you’re not going to know everything you need to be properly on top of your product. And that means you’re a lot less likely to meet your business goals and product vision.

We’ve put together the details, and all the nitty gritty on how to really nail your product management KPIs in our eBook, The Complete List of Product Management KPIs. It’s absolutely worth your time to read it, as it’ll give you the full picture that other product management teams are already working with.

For now though, if you want to have a handy checklist of all the KPIs you’ll need to know and a basic outline of how each one works, you’re in the right place.

Why product management KPIs are important to your product’s success

Understanding how your product is being used, how it is perceived, how efficient your processes are, what your average revenue is… if any of these things sound like they might be useful to know, then I’ve already pretty much explained why you need them. Nice work, everyone, let’s call it a day there.

Jokes momentarily aside, those are just the tip of the iceberg in terms of the key metrics you’ll want to be tracking to ensure both product success and a loyal customer base. Your product isn’t going to be meeting your business goals if you don’t know what’s happening or why.

Ensuring that you have your key product management KPIs worked out will help you to:

• Measure progress toward goals.
• Identify opportunities for improvement.
• Enhance decision-making.
• Align teams around goals.
• Monitor trends over time.

Clearly identified product KPIs will help you to make data-driven decisions rather than relying on instinct and intuition. It will make it easier for you to explain your progress to your stakeholders, and provide you with very useful insights into how your product is performing and where there is room to improve.

It will help you to identify potential process improvements and to target which product features your users want to be implemented or fixed. Using tools like Google Analytics, you can track the success of your marketing channels and more accurately target your advertising efforts.

In short, having the right product metrics in place can mean the difference between achieving your product vision and being mired in confusion as to what the hell went wrong.

The different types of Product KPIs

The specific KPIs that are right for your product team will depend on exactly what it is you are creating. A financial SaaS product is going to have different requirements than a subscription-based gaming service.

Some might not be relevant unless you’re developing a digital product, and others might not fit your current business model. Even so, it can still help to know what you could be tracking if you change your approach.

There are five types of product management metrics to be aware of: 

• Product Usage KPIs
• Commercial KPIs
• Customer Satisfaction KPIs
• Velocity KPIs
• System KPIs

Product Usage KPIs

If you understand how your product is being used,  you can make more informed decisions about your product’s key functionality, learn more about customer behavior, and better target your marketing efforts. 

Daily Active Users (DAU) or Monthly Active Users (MAU)

These product management KPIs track how many unique users have been using your product in the last day or month. They’re useful for understanding user engagement and tracking user behavior over time.

Traffic

This is a measure of how many people have visited your website or used your digital product. You can break it down into total, new, and returning traffic, as well as by the source (i.e. Google or Facebook). This can be important for optimizing your customer acquisition channels.

Bounce Rate

If someone leaves your site or product after looking at just one page, then they’ve “bounced” off without engaging further. Being aware of where people are bouncing off can help you to understand where you’re not meeting expectations or effectively capturing your users’ further interest.

Average Sessions Per User (ASPU)

Another key metric for user engagement, ASPU tracks the average number of times your users are actively using your product over a given time period.

Session Duration

How long people use your product for is a good way of telling how much they are engaging with it, and how much they are getting from it. Session duration is usually measured in seconds or minutes – the longer the better.

Time to Value (TTV)

This product management KPI is about how long it takes your average user to realize the value of your product after they first start using it. The quicker your users get to this valuable outcome, the more likely it is they’ll favor your product over your competitors.

Commercial KPIs

These KPIs aren’t going to be the ones that move the needle… they are the needle. Essentially, if your product doesn’t have an average revenue that’s in the black, it’s going to be difficult to justify its existence to your stakeholders. So, effectively tracking your commercial KPIs is vital.

Monthly Recurring Revenue (MRR)

One of the more important metrics for product managers. If you run a subscription model, then your MRR measures the average revenue you can expect each month.

Annual Recurring Revenue (ARR)

Simply put, this is your MRR times 12. It’s how much money you will make from monthly and yearly subscriptions if your users stay signed up for the whole year.

Revenue

If your business is more about single purchases rather than subscription-based, then this should be your most important commercial KPI. It’s a measure of your product’s revenue generation over a set time frame.

Average Revenue Per User (ARPU)

This KPI tells you how much each user is worth to you, and is a simple calculation. Divide your total monthly revenue by how many customers you had in that month, and you can finally turn your customers into currency.

Customer Lifetime Value (CLV or LTV)

How much is an individual user worth to your business over the whole time they use your product? Increasing this KPI is a path to sustainable growth, as each customer will bring you more and more revenue.

Customer Acquisition Cost (CAC)

The other side of the coin to CLV, this is how much it costs you to pick up new customers. It generally takes into account all of the costs, from marketing spend and salaries to your general overheads.

New Users

This is how many users you gain over a set period of time, either daily, weekly, monthly, or annual.

% of Users who are New

How many of your current customers have signed up in the past month or year is a good indicator of your product’s growth.

% User Growth

This is the percentage of users you’ve gained in the course of a day, week, month, or year.

Cost Per Lead (CPL)

This tracks how much it costs you to acquire a new lead, which is an important metric for your marketing team.

Lead to Sale Conversion Rate

This will help you to understand your product’s appeal to potential customers, and how successful you are at turning prospects into sales. Breaking it down by channel helps you to see where your efforts are effective and where you need to make changes.

Average Conversion Time

Measuring how long it takes you to turn a lead into a paying customer is an important way to track your sales cycle and can help to assess your efforts to speed the process up.

Net Profit Margin

This is the main way of determining how well you are doing at generating a profit. It’s the percentage of revenue you have left after all of your expenses have been taken from it.

Share of Wallet (SOW)

This is a measure of how much of your customer’s budget is being spent on your product, which helps to understand how well you are competing with other options.

Market Penetration (MPR)

This is the percentage of all the possible customers that are using your product instead of a competitor’s. It’s important to know how well-positioned and saturated you are in the market.

Customer Satisfaction KPIs

Having a clear idea of how happy your customers are can make all the difference. You’ll gain valuable insights into how to improve your retention strategy, ways to build on customer loyalty, and what areas of your product or service need improvement to ensure a longer average customer lifetime.

Customer Retention Rate (CRR)

This metric is a percentage of customers that continue to use your product over a given period of time. It shows how good you are at keeping your customers interested and engaged with your product.

Churn Rate

The opposite of the retention rate, your customer churn rate is how many customers have stopped using your product over a period of time. This metric is vital for product managers who run a subscription-based service.

It can be based on customer numbers (sometimes called Logo Churn) or on revenue in two different ways:

1. Net MRR Churn Rate

This tracks how much monthly revenue you have lost from customers who have canceled or downgraded their subscriptions.

2. Gross MRR Churn Rate

Similar to the Net MRR churn rate, but not including any revenue gained from customers who have paid for expansions or upgrades in the same period.

Net Promoter Score (NPS)

By asking your customers to rank on a scale from 0-10 how likely it is they will recommend your product to others, you can measure your customer loyalty and satisfaction.

Customer Satisfaction Score (CSAT)

Another way of tracking how happy your users are, your CSAT is also measured on a scale of 0-10, but the question is less about if they would promote your product, and more directly about how happy they are with it. You can use the insights gained from customer satisfaction surveys to target areas that need improvement.

Review Rating

If you run or are featured on an online marketplace, or are in the e-commerce industry, this is an important metric to be aware of. It’s a valuable source of customer feedback and another solid way of keeping tabs on your customer satisfaction.

Customer Support Tickets

If your support tickets are stacking up, that can be a good way of knowing what problems your users are having, and what issues you should look at fixing next.

Customer Effort Score

This helps you to understand your customer journey, and how easy it is for people to find, use, and purchase your product. It’s generally based on a simple survey that asks your customers to rate how easy or difficult it is to complete a certain task or goal on a scale of 1-5 (1 being very hard, 5 being very easy). A high average score is a good sign of customer engagement, while a low average score shows that people are struggling with your product and that you might lose their business.

Average Resolution Time

Keeping track of how long it takes for customer issues and support tickets to be resolved can be a helpful way to see how effectively your customer support teams are solving problems. A long average time could be a sign of future customer dissatisfaction while keeping it low can help improve their satisfaction.

Velocity KPIs

These product management KPIs are important for both you and your product team. You can use them to evaluate how quickly your development team is creating new features, fixing issues, and how much they can get done in a sprint.

They can help you to develop more accurate product roadmaps, and ensure you’re meeting your product goals by improving your speed of development, and accurately assessing your team’s capacity.

Sprint Velocity

This KPI helps you to measure how much work your teams are capable of producing during a development sprint. Understanding this metric can help you to manage your teams’ workloads and your stakeholders’ expectations, and to find ways to improve efficiency and productivity.

Lead Time

By understanding how long it takes for an issue to get fixed, from when it is flagged to when the fix is delivered, you will be able to determine if there are any bottlenecks in your development process or issues standing in the way of efficiently resolving your customers’ issues.

Release Time

This is an important metric for software development, as it is a primary indicator of how quick and efficient your release process is from start to finish. A low release time is a positive sign of an effective workflow, while a high release time is a warning that you might have some problems with your process.

System KPIs

There’s no use having the best digital product on the market if it’s never online. Tracking your system KPIs can highlight reliability issues that might otherwise negatively impact customer satisfaction and retention, which in term can hamper your long-term growth.

Uptime (aka System Availability)

This is a measure of the amount of time your product has been online and working properly during a certain time period. It doesn’t measure performance or response time, just if the system was available to use.

User Error Rates (UER)

If you know how many errors your users are making when they are using your app or product, then you can get an idea of how user-friendly and efficient your user experience is. You can also track the effectiveness of changes you make to your product design.

Product management KPIs and you – the new dream team

Congratulations, you made it. It’s quite the list when you have it all there in front of you, though like I said before, not all of them are going to be necessarily vital for your product. Don’t feel that you should be tracking every single one if you want to have a chance of success, but rather be excited!

Be excited about product management metrics? Really? Oh, yes! Because by using these KPIs properly, you’ll have all of the most important, useful, and actionable data you could possibly need at your fingertips.

Understanding your product management KPIS will mean you’ll be able to make better product decisions, improve your customer experience, reduce churn, and generally start getting proactive. It’s much better than being stuck trying to react to the market changes around you, and not knowing why things aren’t going the way you want them to.