While being confident in the quality of your product or service is fine and all, when was the last time you updated your analytical toolbox? How long was it since you’ve checked on the news in the field of product development metrics and KPIs?
Extinguished are the days when we lacked access to product data with some meaning and weight. Instead, today we have a different situation. Today we have a lot of choices, some think too many, even. Be that as it may, successful product managers (or PMs for short) have an enormous array of metrics when it comes to choosing one. It’s paradoxical.
Effective PMs now face another challenge: choosing and zoning in on the most efficient metric, which will help them understand how users apply their product, how usage of said products connects to positive outcomes, and how the product impacts the business.
Luckily for you, we’ve gone ahead and done the research (and compiling)!
It’s all neatly put into order in the blog below.
So…what now? Once you decide on your metrics, PMs and product leaders can make decisions on data, and create services and products that can meet or exceed users’ expectations. Some companies just take a shortcut and skip this phase, while some hire product design and development consultancies. Some companies even go that extra mile and rally the entire staff around product data and use it as a mutual language and main resource. With all of that effort, they’d better make sure they’re measuring the right stuff!
Before we start going down the list, we have an important note to add. There are two ways you can classify product development metrics:
- Strategic or tactical – Strategic metrics look at the bigger picture, they measure the overall production over a long period. Tactical metrics can evaluate individual (worker) output, short-term productivity, etc anxnr.
- Input or output – Input metrics can measure the resources which are consumed in the developmental stages of an organization. Output metrics measure the number of products produced.
Now with all of this in mind, choosing the correct product development metrics is critical. With access to this mountain of choices, companies have to choose wisely. It should be narrowed down to only a few, but dependable, metrics. The tasks sound daunting, we know, but it’s been done before. If you start measuring everything, you won’t get the job done. If you have too many metrics, it’s going to get confusing – really fast. Here are a few tips when choosing your metrics:
- Avoid metrics that would be impractical to collect
- Put metrics that have a direct impact on your revenue on high priority
- Limit the number of metrics
- Try to ’’dumb them down“, or simply said – keep them simple!
New additions to your analytics armory
Net promoter score (NPS) is all about measuring your customer’s happiness with your product. The route with NPS is one of the simplest. It’s based on the question: „Would you recommend this product to a friend or colleague?” Your customers answer on a scale from 1 to 10.
One through six are „detractors” and they are the negative ones. The next group is comprised of those who answered from 6 through 8, those we call „passives” and the last group are the ones who answered from nine through ten; these are called „promoters”. Going from 0 to 10, imagine it as being a scale that answers your question above. Your NPS is defined by subtracting the percentage of detractors from the percentage of promoters. A stable NPS is any above zero! On to the next one!
1. Feature Adoption
Launching a brand new feature in your product can be tricky! This is where expert services of product design consultancy can help, especially if they are well-versed in your own industry.
But before you enlist their help, there are things you can implement yourself. We’ve bunched up some of the aspects from which PMs can quantify feature adoption, as follows:
- Duration of adoption tells you if the feature is actually of any worth to your users
- Time – how long it takes a customer to start using a feature after it’s been launched
- The breadth of adoption focuses on what percentage of your target audience or users adopts the feature, which shows you its appeal
- Depth of adoption shows us how relevant your feature is and how easy it is to use by telling us how often the users are using it as it’s intended
An important angle to this is to communicate to your users that you are launching new features. The target audience needs to be aware of a feature to use it.
2. New Product Sales
This one’s simple. It represents the gross revenue a business gains from newly launched products. It can also be referred to as a vitality index – how lively one company truly is. For example, a company that has meager sales of a newer product can presume that it’s being supported by earlier or older, well-established products. This can be highly educative.
3. Errors per 1,000 lines of code (KSLOC – # of errors / 1,000 lines of code committed)
This can be used as a benchmark to specify what the team considers to be an acceptable rate of error. When this metric increases over time, you can surely assume that the quality of your products is decreasing, and this can be the first sign of alarm.
4. Customer satisfaction or CSAT
At first glance, this one might seem odd. Vague in concept, it is actually of vital significance in quantifying customer satisfaction. Companies that operate in highly competitive markets can make great use of this analytics tool. Customer satisfaction can mean anything, from performance and support to subscriptions, customer loss, etc. Long ago, in days before the mass use of the internet, there was only one way to uncover your customer’s feelings towards a product, simply by asking them. Luckily for us, those days are behind us, but it doesn’t hurt to brush up on the basics from time to time!
Bear in mind that no one metric, or group of metrics, is a sure way to determine your product’s success. The effectiveness of indicators, including the metrics listed above, depends on the circumstance and the level of your business’s organization. If you identify and lean in on the right metrics for the situation at hand, you are securing yourself with a reliable guide to success!