Essential Product Management KPIs
Key performance indicators (KPIs) are used to assess and monitor the performance of product management teams within a business. Product managers and executives may use these KPIs to assess how their product is doing in the market and pinpoint areas for development. In this blog post, we will explain what product management KPIs are and share with you ten KPIs every product manager should track.
What Are Product Management KPIs?
Product management KPIs are certain sorts of statistics that show how successful a business is. These indicators are analyzed by product management, sales and marketing teams, and other industry leaders to set objectives, track development, and address problems. Product managers and other key personnel can benefit most from KPIs since they offer advice on setting priorities and assigning tasks. For a corporation to produce and manage high-quality products, these measures are crucial. Data on issues like revenue, customer engagement, product utilization, user experience, and commercial performance may be reflected in KPIs.
How to Report on KPIs
Finding your beginning point is crucial for tracking and reporting KPI progress. The PM is often responsible for setting up the KPIs following the metrics they believe are most crucial to monitor. You must figure out a mechanism to report on your KPIs after you’ve defined them.
Establish the frequency of your KPI updates first. It can be biweekly, monthly, quarterly, and so on. It’s crucial to keep in mind that KPIs must remain adaptable and adjust to user demands, corporate objectives, and even strategy pivots. Use both quantitative and qualitative data when you get the results to develop a thorough picture of your company's operations.
KPI vs. OKR: What’s the Difference?
Organizations utilize KPIs (Key Performance Indicators) and OKRs (Objectives and Key Results) as two different forms of performance measurement frameworks to monitor development and reach objectives. While they share some similarities, they have distinct differences. The main distinction between KPIs and OKRs is that whereas OKRs emphasize creating aspirational, result-oriented objectives that promote organizational transformation and growth, KPIs emphasize tracking progress toward particular, sometimes static targets.
Yojji has hands-on experience with monitoring product management KPIs and making businesses in various verticals flourish. We have a team of professional PMs that can help you in identifying crucial key performance indicators and tracking them. Contact us for further information.
10 KPIs Every Product Manager Should Track
Business Performance KPIs
Establishing KPIs for company performance will make it easier to spot patterns in the expansion and success of the enterprise. Customers, client lifetime value, bookings, revenues, expenses, and profitability are the key points.
- Monthly recurring revenue (MRR)
This term describes the amount of income a firm may anticipate generating from its consumers or clients each month. This sum accounts for any ongoing fees or charges that clients may incur, such as subscription costs or continuous service costs. For organizations that use a subscription-based business model, such as SaaS (Software as a Service) companies or membership-based enterprises, MRR is an essential indicator.
- Customer churn rate
The percentage of customers that end their contact with a firm during a predetermined period is known as the customer churn rate. It is a crucial indicator that aids businesses in determining how quickly they are losing clients and how well they are keeping their current clientele. Customer churn rate may assist firms in identifying trends or problems that may be driving away clients, such as bad customer service, unfavorable prices, or poor product quality. Companies may improve their client retention rates by resolving these problems, which might ultimately result in higher sales and business expansion.
NPS is a metric that assesses a customer's propensity to recommend a business to others. NPS is measured on a scale from 0 to 10, with respondents categorized as Promoters (score of 9-10), Passives (score of 7-8), and Detractors (score of 0-6).
Product Usage KPIs
These KPIs assist you in determining how your clients see and utilize your product.
- Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is a metric used to describe the overall cost incurred by a business to bring in a new client. It covers all direct expenses related to sales and marketing efforts, such as advertising, promotions, salary for sales staff, and other similar costs.
- Trial drop-off rate
This KPI shows the percentage of people that signed up for a free trial, began using a product, but abruptly stopped using it. This provides important information on how first-time users engage with your product throughout the trial period.
- Daily Active User/Monthly Active User ratio (DAUs/MAUs)
Businesses frequently utilize this KPI to gauge how engaged users are with a certain item or service. Businesses may determine how many of their monthly active users are using their product or service daily by looking at the DAU/MAU ratio. A high DAU/MAU ratio is typically regarded as a sign of good user engagement and product-market fit.
Product Development KPIs
They show where processes need to be improved, as well as the rate of product expansion and growth.
- Team velocity
This indicator is great for determining how long it will take a team to finish a project. This offers more precise time estimations and more accurate roadmaps.
- Delivery on time
This KPI enables you to determine the resources you need on board and more precisely anticipate delivery deadlines. In the end, it keeps your customers content and prevents turnover.
Product Quality KPIs
These KPIs help spot trends and possible pitfalls in providing a top-notch client experience.
- Support tickets/escalations
Support tickets are a reliable sign of the consistency and high standard of a product. The quantity of support tickets should remain constant if there are no significant modifications or product upgrades that may increase consumer inquiries.
- Customer lifetime value (CLTV)
This term refers to the entire amount of money that a business might anticipate gaining from a single customer throughout their business relationship. It is a useful indicator for organizations since it enables them to comprehend the long-term profitability of both their clients and their entire enterprise. While making choices concerning client acquisition and retention, firms should take into account CLTV. Businesses may decide how much to spend on new customer acquisition and how much to invest in maintaining and nurturing current customers by knowing the worth of their consumers.
Product Management KPIs play a critical role in helping organizations measure the performance of their product management teams. It’s important to regularly evaluate and adjust KPIs as the product evolves and market conditions change. Ultimately, using effective KPIs can help product management teams deliver successful products that meet the needs of their customers and drive business growth. If you need professional help, Yojji specialists are ready to offer their expertise.
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