What are the Best Product Metrics for Great Business Results?
The goal of every product is to meet the specific expectations of its creators and be suitable for its users. There are specific metrics for each product that can highlight its effectiveness and operation.
These metrics are well-described in the article we found on Hygger.io blog. The author defines the main concept of product metrics, their components, and the most relevant product metrics systems for those professionals who want to plan and develop really useful products and achieve the best business goals. Here’re some key points from this useful article:
- Product metrics allow specialists to make a competent and timely assessment of the product’s performance based on the company’s current work strategy and goals.
- Product metrics help to know how the product meets the stated expectations, how the quality of its work performance is, how the customers are satisfied with its functionality, etc.
- Product metrics are established by different specialists such as product managers and product marketing managers, business analysts, UI/UX designers and others.
What are the most popular types of product metrics?
Every professional has his personal opinion of what should be done first and what should be developed next. Sometimes product managers make a rather wrong decision to try to check the product by all the existing metrics. There are typical metrics that are used in the product lifecycle:
- Monthly Recurring Revenue (MRR) that demonstrates the amount of profit that the company intends on receiving.
- ARR (Accounting Rate of Return) is the amount of the profit that is expected from the product investment.
- Churn rate is a metrics that shows the percentage or the number of users that have stopped using the product.
- Customer Lifetime Value (CLTV) is a kind of forecast for the amount of money from customers in the future.
- CAC (Customer Acquisition Costs) is the sum of the entire investment that was spent on customer acquisition channels, marketing promotion, advertising and other sources.
There are also different methods that combine many specific product metrics. One of them is HEART.
It is one of the top techniques not only because of its unusual name but also thanks to its simplicity and versatility. HEART was created by Google specialists. It contains the following components:
- H – Happiness – is one of the equivocal indicators that implies user satisfaction, the comfort of use of the product and other metrics of the product.
- E – Engagement – usually presents the pure data of the users activity, including their number of visits, likes, shares, comments, etc. In other words, this metric is an user’s direct interest in the product.
- A – Adoption means how a user cares about the product. That is, it becomes clear how many users downloaded the latest version, bought some additional functions, or how many subscriptions were made.
- R – Retention shows the number of repeat visits, users or orders. Also with such a product metric, it becomes possible to know the customer churn.
- T – Task Success is a specific indicator of how the product becomes utilizable and how it meets all the requirements.
What product metrics do you usually use in your personal work? How can you understand which strategy is the most proper right now?