Metrics that Matter to Product Managers

As Product Managers, opening up Google Analytics and being confronted by the all options available can be a little daunting at first. But after a few tweaks here and there and a little trial error, we eventually get it. We set up our little dashboards which show the metrics we think are important and then we feel good about ourselves. Like you’ve achieved something meaningful.

You haven’t.

A graph, a set of numbers, a dashboard and a couple of intelligent sounding acronyms like CPA, LTV and AOV will make any idiot appear smarter.

‘Our LTV is $50 and our AOV has declined 25% YOY but has been offset by a reduction in CPA’
‘Woah. This guy knows his/her shit.’

Really?

Humans naturally equate numbers, graphs and percentages with intelligence.

If you want to use metrics to further your career, make yourself look intelligent to your peers or bamboozle other people in a meeting room then go for it. The inconvenient truth is that in many cases, particularly in larger corporates, creating a veneer of intelligence by using graphs and charts will work wonders to further your own personal ends. What it won’t do, however, is help you create a successful product.

The inherent value of product metrics is in discovery;

1. Discovering you’re not making enough money to sustain your product beyond 6 months
2. Discovering that your customers are not willing to recommend your product because your refund policy is too aggressive
3. Discovering that your public API is bringing in more revenue than your display advertising

These little nuggets of gold can transform the direction, focus and fortunes of a product. To discover these nuggets, you need to ask interesting questions and know which metrics you should be measuring.

I can’t ask interesting questions for you or your product. I can’t tell you which metrics matter most for your product or business model. But what I can do is provide you with a (hopefully!) useful list of metrics by product vertical which you can use for your product.

And so that’s what this post is. A list of metrics by product type which you can use to inspire your own dashboards so that you can look smart and discover things which matter most about your product at the same time – a wonderful combination for any product manager.

Here’s a list of the product categories we’ll cover.

1. General product metrics
2. Ecommerce
3. Content sites
4. API products
5. Subscription products
6. Mobile apps
7. Lead generation sites

1. General Product metrics

Let’s start with a few general product metrics as a foundation. These are not necessarily specific to any one particular product category but they are metrics and concepts that you should be familiar with as a Product Manager if someone casually drops them into conversation.

2. Ecommerce metrics

One of the primary goals of Product Managers working on ecommerce products is to help their business sell as many products as possible whilst reducing friction, encouraging referrals and delivering a seamless end to end experience that leads to that customer to want to buy again. It sounds like a lot to juggle. It is.

Here’s some key metrics that matter to ecommerce product managers. As with all these metrics, these are by no means exhaustive or essential; just a list of some of the most common and useful metrics for you and your team.

3. API products

We often forget that there are entire products which exist primarily through APIs. Companies like Twilio, Stripe, Shipwire and Shopify all deliver some of their most cherished value through their external APIs and they have APIs to thank for at least some of their success.

But how do you measure your API product as a product manager? Metrics for APIs don’t spring to the mind as naturally as perhaps subscription or ecommerce products do; we’re used to hearing about CPAs and LTV but API products are a peculiar category.

Here’s some metrics to take a look at.

4. Content sites

The definition of a content site here is a product whose primary value is generated by the content it produces. The content itself is the reason people come to the site. Typically, the content is text but can include a blend of text, video and audio. This includes larger media sites such as the New York Times, BuzzFeed or The Guardian, but also smaller blogs.

The typical business model of such a content site is to sell advertising on a CPM (cost per thousand) impressions basis. This means that Product Managers on content sites are often working to maximise the number of visits and the revenue generated by those visits either through advertising clicks or orthogonal revenue generating value propositions such as paid for subscriptions (covered here as a separate category).

What should you be measuring on your content site? Here’s a list of some of the metrics:

5. Subscription / software as a service (SAAS) products

Do you remember that weird subscription box craze? Step 1 was to pick the most incredibly niche niche you could think of, step 2 was to turn it into a physical subscription box and step 3 was to watch the dollars roll in. It worked for some businesses (Graze, Dollar Shave Club spring to mind) but not so well for others.

Whilst that trend feels as though it’s (thankfully) well and truly over, subscriptions as a business model are still maturing and evolving, with the current generation of consumers feeling increasingly comfortable paying a small fee in return for access to a product or service ( Netflix, Spotify, NYTimes). It took the Napster generation a little while longer to wean ourselves off the imperfect, illegal world of BitTorrents and mp3s, but much of that was because:

1. We’d become addicted to breaking the law and getting whatever content we wanted, whenever we wanted
2. There were no genuinely decent paid for services to replace the all you can eat illegal options we’d become so used to

With offerings now available at low, fair prices, the market has shifted from ‘why would I pay for a legal, inferior experience? You’re not having my cash’ to ‘$7.99 for free delivery, video streaming and unlimited kindle books is worth the price – take my cash’.

Product Managers working on subscription / SAAS products have plenty of metrics to measure. It’s perhaps one of the most dynamic, interesting product types to work with from a metrics perspective at least, because you can view the entire customer lifecycle from end to end over a period of a few weeks or months. This is extremely satisfying as a product manager. You can analyse the entire lifecycle, implement some changes and measure the impact of these changes across a whole new set of cohorts.

A typical subscription lifecycle might include the following stages:

1. Acquisition – how do you acquire customers?
2. Engagement – how do you keep customers engaged and using our product?
3. Referral – how do you incentivise existing customers to refer other customers to increase engagement?
4. Retention – how can you use retention tactics to prevent your customers from cancelling their subscription?

Here’s some of the most useful metrics to know as a subscription product manager.

6. Mobile apps

The mobile app is dead, apparently. Less and less people are using new apps and we have certainly been experiencing app fatigue. It’s a tough task to get an app off the ground.

If you are going to do it you’ll probably need:

1. A shed load of funding and above the line marketing (if you’re a startup)
2. A pre-existing brand to use as a launch pad
3. A smart grip on the growth metrics that will get you off the ground

Here’s some of the metrics that matter most to product managers working in mobile:

7. Lead generation sites

Many product management roles are focused exclusively on lead generation and conversion rate optimization – and not building the next iPhone and becoming Steve Jobs, as many product gurus would have you believe. Lead generation and conversion rate optimization sound pretty dull but can often be satisfying.

Watching your metrics shift and knowing that your metrics are having a profound impact on the business and the bottom line can be highly rewarding. A small % shift across large lead gen sites can mean big differences throughout the end to end funnel.

Here’s some of the metrics you should be measuring on your lead generation website if you’re a product person focused on lead generation: