7 Product Management Keys to track your product success

The good news is that there are tons of metrics you can use to measure the success of your app, website or other digital product. However, metrics vary based on your product type and industry. Therefore, it is important to choose the right size from the beginning of the production process. We recommend starting with the North Star measurements. This analysis will help you understand the big picture of customer engagement and highlight the most important success metrics.

This blog will help you get to know the most popular products commonly used in the industry and learn more about how customers interact with your products.

7 key product management metrics:

(1) Cost of Customer Acquisition (CAC):

This is how much you spend on attracting new customers. The CAC helps you determine how well your business and sales team are doing and whether regular customers are generating enough revenue to justify the value you seem to be receiving. The CAC also helps you identify how you need to rework your acquisition and pricing strategies to stay relevant and profitable.

Calculated by dividing the total cost of marketing and sales by the number of users who become new customers in a given period.

CAC = total cost (marketing + sales) / number of new customers

(2) Customer Lifetime Value (CLTV):

According to HubSpot, “Customer Lifetime Value (CLV or CLTV) is a measure of the total revenue a business can expect from a person using money in a business relationship.” The CLV metric can help you improve your business and sales, and create strategies to increase revenue and benefit every customer.

How to: To calculate this, determine the average customer lifetime (how long a customer uses the product before they stop using it) and the average income of a user.

Average Revenue per User (ARPU) * Average Customer Lifespan = CLTV

(3) Conversion rate:

Customer conversion rate is the percentage of customers who visit your site or app and complete an action that benefits you in the business process. A high conversion rate indicates a good user experience (UX) and how effective your team is in generating sales. However, depending on your brand and business, there may be more than one conversion.

How to Calculate: Now that you have a basic understanding of conversion rates, easily calculate this magic number.

Conversion Rate = Total Conversions / Total Unique Visitors * 100

Examples of Conversion Events:

• Sign Up As a Member
• Register Credit Card Information
• Sign Up For Newsletter Subscription
• Download Technical Report
• Download Software
• Application Use the paid version of the product after program to raise

(4) Monthly Recurring Revenue (MRR):

The product management team uses the MRR metric as a diagnostic for their products. This metric helps you estimate the monthly revenue you can expect to receive from subscriptions (if you are a service) or from customers. For example, if you have 1000 customers who pay you $10 per month, your MRR would be $10,000.

How to calculate: To calculate the MRR, multiply the average number of revenue generated by each account.

MRR = Total Number of Active Accounts x Average Revenue Per Account (ARPA)

(5) Customer Retention Rate (CRR):

This metric helps you measure your ability to retain customers over time. The higher your CRR, the better for your business. Good customer retention means customers like your company or product. As your customer base grows, you can generate more revenue and increase the customer journey with more sales and cross-sells.

Customer Retention Rate = (customers at the end of the period) – (new customers) / customers at the beginning of the period.

(6) Active users:

Active users are general terms. As an important marketing tool, it measures the number of users interacting with your digital product over time. You can think of this test as a health check of your website or app. It is important to remember that you describe the process a user must take to become an active customer and use this information to see how they interact with you and the goods. Based on time, you can track:

• Daily Users (DAU): Unique visitors who interacted with your site/app in a 24-hour window.
• Weekly users (WAU): Unique visitors who interact with your digital product over a 7-day period.
• Users per Month (MAU): Users who interacted with your product within a 30-day period.

(7) Net Promoter Score (NPS):

This is a powerful metric to determine how satisfied your customers are with your product/service and how likely they are to recommend your product to their friends. In today’s digital-first age, consumers rely on online reviews and recommendations from friends when visiting websites/apps or shopping.

In fact, 91% of people read online reviews regularly or occasionally, and 84% trust online reviews as much as personal recommendations. Therefore, the Net Promoter Score is an important metric for identifying promoters.

Calculate your NPS:

Check your customers; Ask them, “On a scale of 0 to 10, how would you recommend our product/service to a friend or family member?” ask.

Identify your customers by their scores: 9-10 are your target supporters, 7-8 are passive, 0-6 are detractors.

Forget passive now; just subtract the percentage the ​Scores range from -100 to 100.

How can Pure Technology help you create a great customer experience?

Monitoring product metrics is critical to product success. During our product discovery training, we guide customers through the process of analyzing North Star metrics and help create plans to demonstrate product success. When product performance measures are implemented, all teams, from product management to development, to marketing and sales, will have access to be kind about what makes a product successful. Then, based on the insights from these metrics, you can guide their decisions about key product value, user engagement, continuous development and improvement, create monetization models, target your messages, and more.

Pure Technology is a global product development company that helps businesses create great products for their customers. In addition to recommending the technology process, we help customers select and evaluate important parameters during the purchasing and development process. To learn more about metrics or tools for increasing customer engagement and business growth, contact Us.

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