What Are Product Metrics?

A product metric is a quantifiable measure or data point that enables a business to define, check on, and analyze how its product is faring.

There are many metrics that businesses can track to see how well they are doing. The tricky part, however, is choosing the right one. If approached in a less than ideal manner, metrics can end up constituting a hindrance rather than being helpful.

Product metrics need to be carefully chosen and not be too many. With only a handful of those that fit your business goals and product strategy, you are good to go.

How You Can Find Product Metrics Helpful

Problem detection

Product metrics can give an idea of things that aren’t going as well as they should. They provide warning signs of problems that might not be directly reported by users. When monitored properly, metrics can help you detect on time issues capable of causing retention headaches.

Informed decisions

Product metrics guide decision-making. They serve as pointers of actions that should be taken. In them, you have veritable proofs of areas where extra work is needed. Metrics make product managers rely less on guesses when looking to improve customer experience.

Buy-in

For the success of your work, you need the backing of top management and executives. Product metrics can make that easier to get by providing data that makes certain decisions necessary. They reduce the amount of time you’d have to spend convincing executives to provide the necessary funding.

What Metrics Should You Track?

When talking about product metrics, companies often find it a bit challenging deciding which ones to track. There are many to pick from and what works for one company may not work for another.

Mixpanel provides a framework we think you can find helpful in determining what metrics to track. The model splits them into three classes, namely:

• Focus metric
• Level 1 metrics
• Level 2 metrics

Focus metrics

While a business will usually have more than one metric to track, it should have one that matters most. This is its focus metric, around which the others will sort of revolve. The focus metric isn’t necessarily what some people call the “North Star metric.” It is not the only one to pay attention to but one that should get top priority.

Level 1 metrics

These drive the focus metric or help to ensure that it is heading in the desired direction. In other words, Level 1 metrics serve as complements to the focus metric. If the focus metric, for example, is monthly active users, the 30-day retention rate can be a useful Level 1 metrics to show how well you’re doing. This helps to ensure that resources devoted to getting new users aren’t going to waste.

Level 2 metrics

In these, you have more specific, low-level metrics that push both Level 1 and focus metrics. Having these metrics where you want them puts you well on the way to achieving your desired overall results. Mixpanel’s framework divides the key product metrics into the following categories:

• Reach
• Activation
• Active users
• Engagement
• Retention
• Business-specific

The product analytics company says its framework is highly customizable. You can add more levels as you find fitting to your needs, so long you can establish linkage between them.

Putting Product Metrics to Work

What do you do after tracking and analyzing your product metrics? Or what should you do before acting on them? The following are a couple of key steps you should consider taking:

Verification – Be double-sure that the message you’re getting from the metrics is correct. Do users really need the features that seem to be missing and helpful? Speak with customers to know what they think.

Sharing – When you’ve confirmed what the metrics suggest, you should proceed to reveal your plans to relevant stakeholders, including team members and executives. The data you have should make it easier getting their support than it might be ordinarily.

After communicating your plans to select stakeholders, you can recruit their help to convey the same to their respective teams or groups. You should work with them to fashion out how things will run smoothly, with minimal disruptions or discontent.