Product Manager KPIs And Metrics | Introduction To KPI | Product Management Tutorial |Simplilearn

foreign it's a pleasure to welcome you to our new session where we will discuss product management metrics and kpis in this video we will discuss the top metrics and kpis to measure the success of a product using key performance indicators kpis are crucial because they provide a benchmark against which to measure your performance going forward kpis make it obvious whether or not you are succeeding in your objectives and by using kpis you may Define objectives plan a course of action to achieve them and assess your progress as you go but before moving ahead in our

session don't forget to subscribe to our Channel and hit the Bell icon to never miss any updates from Simply learn now before we start our session here's a question for you all what according to you is the most important metric that defines the success of a product do let us know in the comments below today we'll start this session by providing you with a brief introduction to the product management metrics in kpis and then we will be discussing product management metrics and kpis and stick to the end because we will be discussing product management Frameworks

which are the heart framework and the r framework let's start with the session and know about product management metrics and kpis like other company teams product management teams utilize key performance indicators or kpis to set clear goals and natural choices recognize success and spot risks and problems a lack of kpis can cause a product management team to have a poor sense of progress making it challenging to evaluate and learn from past work and make it difficult to prioritize amongst different activity streams when progress fears off course the product manager often defines these kpis depending on

what they think are the most crucial indicators to measure and report on the product's success and the product management process are ultimately measured and improved using product kpis the breadth of the product manager's kpis might vary depending on the organization's procedures and product type the kpis could significantly favor the design and manufacturing of the product for instance if the team's primary goal is product development however if they want to recognize the influence on the customer the kpis might be more broad to include use in consumer behaviors the decision-making process about the kpis that matter must

ultimately be left to the product team leader although it should be highly influenced by the organization's top level goals let's Now understand what our product management metrics metrics for product management give product managers The crucial information they require to monitor their performance and health of their products your product is more likely to offer accurate insights on what adds value to your current users and help convert potential users by setting and tracking the proper metrics product metrics are are used by product managers to recognize which features are most used underused or completely ineffective finding out how

customers interact with a product find out how frequently people return after registering test how well your product is received by customers identify the user cohorts that are power users and others there are five basic metrics that are used to measure the success of a product the very first metrics of product management are growth and activation in product management growth refers to boosting the utility and user base of an already existing product product management seeks to make an existing product more successful as opposed to Conventional product management which focuses on managing all operations necessary to bring

a lucrative product to the market to maximize user retention during onboarding and the initial hours or days the term activation is used onboarding customers with less friction educating them about the benefits of your product and gaining their early commitment are all examples of activation goals this holds several kpis number of users per session traffic churn rate the next metric used for product management is retention the capacity of a business or product to keep customers over time is referred to as customer retention if a business or product has a high customer retention rate it implies that

consumers keep utilizing or repurchasing that good or service low customer retention refers to the rate at which consumers discontinue utilizing or purchasing a company's Goods or service effects of retention total company growth and client loyalty when considering extra products or Services loyal clients are more inclined to stay with a reputable business retention as a metric holds crr CLTV the next metrics we're going to discuss is engagement measuring user involvement enables you to determine whether customers value your offering logins downloads and the amount of time people spend on your website are all indicators of engagement engagement

holds daily and monthly active users session duration moving on we have user happiness as the next metric used in product management since user happiness is a self-reported statistic asking users to estimate their happiness rather than observing their behavior is necessary happiness in the context of products and services refers to a gratifying or enjoyable user experience contentment joy and Delight are additional nouns that can be used to denote happiness user happiness is a self-reported assessment thus rather than observing people's actions you need to ask them how happy they are that also implies that prejudice and feelings

are present in this situation user happiness holds NPS rating on the App Store and the last metric used for product management is revenue revenue is the cash that a firm generates via its operations depending on the accounting technique used there are several ways to compute Revenue sales made on credit will be included as revenue for products or Services provided to the client under accrual accounting Revenue may be recognized following certain standards even though payment has not yet been made the cash flow statement must be examined to determine how well a business collects debts cash accounting

on the other hand only counts sales as Revenue when payment is made Revenue holds CAC mrr arpu now let's move ahead in our session and understand what our product management kpis the success of a team may be measured using kpis for product management product management sales and marketing teams as well as other business experts use these kpis to set objectives track development and address problems because they offer advice on setting priorities and assigning tasks kpis are beneficial for product managers and other team leaders the creation and management of high quality products for a corporation depend

on these metrics product managers can carry out the following tasks thanks to kpis established goals track development take notes on prior work make sensible choices manage competitors resolve issues deliver high quality products the very first product management kpi is monthly recurring revenue or mrr a company's predictable income stream from month to month is measured by its monthly recurring Revenue this metric's main objective is to compare performance between different subscription terms or packages each with unique features and costs for companies that provide software as a service or saas or make money by selling subscription services this

type of technology is ideal these sales activities are recurring and simpler to predict than one-time purchases product managers May monitor the business's Financial Health and track the rise or drop of monthly Revenue using mrr this gauges a product's monthly gross sales if you wish to compute this you must take into account the mrr at the beginning of the month add the income from new customers and subtract the number of customers you lost for subscription-based businesses like saas where no further sales are made after a client becomes recurring mrr is simple to evaluate monthly recurring income

is calculated by multiplying the average monthly rent Revenue per user by the overall number of users for a particular month the next product management kpi is the customer retention rate it is the proportion of clients who remain clients after a specific amount of time the length of time you can keep clients will be measured using this kpi and product management you should also check to see if steps are consistently done to keep clients if the number of customers departing starts to fall without a retention plan it is common for firms to focus solely on recruiting

new clients while utterly disregarding their current clientele asking your former clients why they choose to stop doing business with you is another strategy you may employ to lower the retention rate always remember that acquiring new consumers is harder than maintaining relationships with your current clientele older customers are more likely to spend more money with you than new ones additionally it is common for current customers to test new features upgrade plans or offer comments it could be more profitable for a corporation to concentrate on keeping them the retention rate is equal to customers at the end

of a period minus new customers divided by customers at the beginning of the period times 100. moving on the next product management kpi is the net promoter score the number of current customers who are likely to recommend your product to a friend or colleague is measured by a kpi called net promoter score it keeps track of the number of consumers that aren't interested in your goods or detractors customers who give you a rating of 9 or 10 are the ones who will remain loyal to you they sing psalms about your brand and are referred to

be promoters or Advocates NPS equals the ratio of promoters to detractors the specific definition of a good NPS score is ill-defined the ideal NPS score does not exist depending on the industry it varies a firm in the electronics sector can have a higher NPS score than one in the Telecom sector the percentage of patrons who are inclined to suggest a product or promoters and those who disapprove of it or detractors is known as the net promoter score a high NPS promotes growth and knowing how many customers are complaining might help a company identify a problem

with the customer experience this measure displays the most popular product features and may Inspire teams to come up with fresh concepts for brand new features or improved ux design here's the equation NPS is calculated as the percentage of promoters minus the percentage of detractors the next kpi used in product management is average revenue per user the average revenue per user is the amount of money a business May anticipate from a single client this is an excellent technique for an saas business to evaluate the effects of a new strategy a new subscription plan or a pricing

change which client segments provide the greatest value in may be determined by running the computation for several subgroups this can provide information to investors about profitability levels guide investment choices and guarantee the business's Financial stability you may calculate the amount of money each user generates each month or year using arpu knowing your arpu may help you make decisions more easily when you are unsure of how to price a new product or when you want to raise the price of an already existing product both new users and current users can have their arpu calculated for a

new user arpu refers to metrics that are based on accounts after the price of the product or subscription plan changed but for an existing user it relates to figures from before the price change arpu is calculated as monthly recurring Revenue divided by total accounts the next product management kpi is customer acquisition cost the anticipated cost of acquiring One customer for your firm is known as the customer acquisition cost understanding the necessity of measuring CAC is essential if you plan to operate a firm for the long term CAC covers the money you spend on Advertising overhead

the effort of the sales staff software used and other expenses only after you can figure out the entire amount spent on each client will you be able to estimate how much you will need to spend moving forward on bringing in new business the cost of lowering and acquiring a new Talent is known as the customer acquisition cost this includes the time materials cash and effort needed to create leads and turn prospects into paying customers the customer acquisition expenses might include the price of marketing supplies sponsoring costs cost of software marketing salary levels for sales and

marketing staff CAC is the sum of all past and present cash outlays divided by the total past and present customers the next product management kpi is customer lifetime value you may estimate a customer's life lifetime value to determine how much revenue they will provide overall in essence it provides you with a general sense of how much income you may expect from a client before they quit doing business with you customer lifetime value is a common metric for determining the potential Revenue a business might derive from a client over time the term customer lifetime refers to

the typical length of time a customer Supports a business value is the amount of money or profit that a client is worth a firm May plan its economic stability and do Financial forecasting using CLTV obtaining cash from investors might also be aided by it product managers May learn from CLTV how much money they can spend on acquiring and retaining customers these expenses include those for lead creation marketing and retention tactics they want to ensure that their expenditures are reasonable given the return on their investment establish the average customer lifetime and average revenue per user for

your company to compute CLTV CLTV equals average revenue per user times average customer lifetime the next product management kpi is the number of customers acquired the number is not reserved only for your sales and marketing staff the quantity of customers you have obtained is a good sign that your product is successful if the discrepancy between the amount you anticipate and the actual acquisition is significant either your skills have been overestimated or the product hasn't yet gained much traction you may use this to identify areas where the product may be improved learn more about the reasons

why your product failed and then act right away to redesign it to get a broader appeal the number of new users new user percentage and percentage rise in user base are a few of the product management kpis to monitor that are connected to the acquisition the next kpi used in product management is Bounce rate the percentage of people that visit one page on a website or app before leaving quickly is known as the bounce rate this measure gives essential information about how users behave while interacting with a company's digital content if a business has a

high bounce rate it should look for strategies to hold users interest for longer it is a statistic that assesses the proportion of people that access just one page before leaving the website or simply staying for a brief period the bounce rate provides you a chance to improve the offering so that the visitor explores more pages and progresses farther down the sales funnel you may boost the average user's focus on the website by using this statistic the bounce rate should be decreased according to the product manager the next kpi for product management is churn rate the

pace at which customers depart a business or the churn rate is the reverse of the retention rate particularly following a product modification it provides information on client satisfaction two different turnover rates exist client churn and churn in Revenue customer churn refers to the number of users who have cease using your services or canceling their subscriptions the business's Revenue lost as a result of client churn is measured by Revenue churn while we would suggest focusing more on customer turnover than Revenue churn the latter is still crucial because it may reveal a lot about customer happiness customer

churn rate equals customers lost divided by total customers moving on the next product management kpi is the customer satisfaction score the level of a client's happiness with a product or service feature is known as the customer satisfaction score companies can identify it by conducting customer satisfaction surveys which are typically rated on a scale of one to ten this can assist managers and staff in determining how they might enhance their efforts to provide a better client experience a leader can use it to decide whether they want to do a more in-depth qualitative examination of client happiness

CSC is a metric that assesses consumer satisfaction with a given commodity or service customers are asked to rate their satisfaction with a particular item or service using a rating scale in this kind of survey this metric is calculated by adding the scores and dividing them by the total number of respondents CSC gauges how satisfied a single feature or service is whereas NPS gauges total satisfaction to continually learn from the customer how they like utilizing a certain feature use CIA SC frequently make sure you address their problems based on the feedback to provide them with compelling

reasons to renew the product the next kpi we have for product management is the number of users per session a product manager May learn which aspects of an app are most used by monitoring the number of user activities every session this is dependent upon the acts that a user repeats this is particularly beneficial if a business is evaluating the use of a new website or application component they can measure client interest in the modification to see whether it is intriguing or practical kpis are used to monitor if a product is still meeting client demands this

kpi monitors user activity on your website and mobile application any action they do and the characteristics they employ fall under this category this is a potent kpi that may direct your approach to feature uptake the next kpi is traffic the volume of users who locate and assess websites are referred to as traffic it may be organic emerging spontaneously or it may be paid emerging as a result of sponsorship of content or the purchase of advertising space by a business people that are in traffic are typically curious about a company and may eventually make a purchase

this is a useful indicator for assessing the success of your internet marketing additionally it may be eye-opening to know where your traffic comes from you will be able to identify the most effective channels for you when you measure sponsored traffic you will be able to identify which platforms perform best and which don't if you have a variety of channels where you post content to generate organic traffic analyzing this measure will be fun for your marketing team you should ask the user why there isn't more active participation if you see that the engagement rate is low

send your clients questionnaires to learn where you are falling short and how you can enhance their experience to encourage them to utilize more of your product moving ahead the next kpi used for product management is session duration the amount of time a person spends interacting with a website during a session strategies to monitor the use of digital products include this kind of measure although revenue is not measured customer involvement is and this has a big influence on sales the more a customer engages with the business's website and digital content the more probable it is that

they will purchase anything from that business online resources may offer Vital Information to prospective customers about the goods goals and values of a business longer session times demonstrate user interest in a website which is beneficial the success of a marketing campaign may be measured by user interactions which can also Foster brand loyalty these kinds of measures that are centered on the customer are great strategies to increase financial performance the number is crucial because it lets you know how valuable the information in your offering is in the end it will have an impact on client loyalty

and retention rate adding new videos and links and enhancing your website's General design are the only ways to improve it session duration equals the total time users spend on your product divided by the number of users the other kpi is daily and monthly active users how many active daily and monthly users you have is an important product consumption measure it demonstrates whether your product is compelling enough you must select a time frame and kind of interaction when defining active users users are active if they complete the interaction within the specified time frame you can think

of them as inactive users if they don't the number of unique users that visit your digital product on a daily or monthly basis is tracked by the daily active user and monthly active user counts daily active users are the daily total of active users users who are active each month are counted as monthly active users to get a clear picture of how engaging your product is compare your active users daily and monthly to your entire user base the last kpi used for product management is rating on the App Store users may give your app a

star rating on a scale of one to five 5. the summary rating of your app which appears on your product page and in search results is based on user ratings when you publish a new version of your app you have the option to reset the summary rating which is unique to each region on the App Store however we advise being cautious when using this function having few ratings May deter potential users from installing your app even if refreshing the summary rating might guarantee that it matches the most recent version of your program which can be

advantageous if an update answers customers prior issues now let's move ahead in our session and know the Frameworks used for product management so in this video we will be discussing the two most important Frameworks of product management that is heart framework and R framework so let's first understand the heart framework an approach to enhanced software user experience is called the heart framework according to five indicators focused on the user the framework AIDS businesses in assessing any part of their user experience the heart framework which was created for user experience designers and researchers may be a

helpful technique for product managers since it is centered on developing a deeper understanding of user behavior and user preferences Google ux created the heart framework 10 years ago as a means of precisely defining product kpis to enable data-driven decision making it aids in defining and delivering user-centered product metrics the heart framework may be used by product managers to prioritize features assess the performance of a product and make more data-driven product choices the user's experience is measured by heart instead of focusing on system or technology metrics like failures we wish to pay more attention to user

data like usage frequency these categories include happiness engagement adoption retention task success adoption the rate of users who finish the try trial or onboarding process and switch to regular use is known as adoption it tracks the success of your client acquisition and activation processes and enables you to pinpoint the factors that encourage repeat usage task success to determine whether users can successfully execute their tasks using your solution look at task success based on the findings of these tests you may modify your app's functionality such as the back end to make sure information flows through it

smoothly and delivers the outcomes users are looking for engagement user activity is gaged via engagement depending on your product this may include the number of sessions each week the number of likes or downloads the length of sessions the number of transactions as well as other metrics it is vital to Define track and monitor suitable user behaviors in your app the findings will provide you invaluable insights into how people use your app and you will be able to observe the effects of any changes you make retention the percentage of people that often utilize your product is

measured by retention it's important to keep track of who is and isn't returning to your product and why as negative retention also known as churn will affect how your product performs in the market happiness users levels of happiness reflect their opinions of your product it is a way to gauge how satisfied users are and methods include surveys in app reviews and net promoter score or NPS this is quite helpful when determining how customers feel about the most recent version of your product or the addition of a new feature this may then affect the features you

decide to preserve and the ones you decide to create now coming toward the end of our session let's learn about the r framework one of the most often used Frameworks for measuring growth and success in saas and startup businesses is the r model the pirate metrics or pirate framework are other names for it it was first proposed by David McClure the founder of practical Venture Capital it divides your client life cycle into five phases and correlates each with relevant kpis starting with the initial point of contact and continuing until a potential customer can parts to

a paying one this will offer you a clear understanding of which stages of the client life cycle are succeeding and where there is room for improvement in your conversion funnel R is a startup metric approach created by entrepreneur and angel investor David McClure often known as startup metrics for pirates you may improve the user experience for your customers by using these metrics which reflect all consumer activity patterns they let you measure conversions more accurately and concentrate on the best channels the nicest part about R is that it doesn't require any technological expertise making it simple

to comprehend for both seasoned entrepreneurs embarking on new projects and for newcomers with brand new Enterprises in short it exists to assist you in making better data-driven decisions and achieving success by maximizing each of the five criteria and if you comprehend them you'll be able to see any issues with your startup straight away as well well as what specifically isn't working and how to correct it by doing this you may prevent basing choices on guesswork or on bad information the five stages of your client's life cycle are referred to as R which are acquisition where

do customers come from activation the process of converting acquired clients into engaged ones retention how to entice potential clients to return referral techniques for encouraging clients to endorse your offerings Revenue how to convert prospective clients into paying clients acquisition in essence you want individuals to register for something for instance you could want someone to register for a free trial keep up strong traffic acquisition you need to make sure your website is receiving qualified leads the fact is if you have a good amount of focused visits each month you don't need a ton of leads to

obtain clients save your time establish your Target demographic and conduct a campaign to build anticipation in for the launch when customers are waiting for your product to launch gaining new customers will be simpler you must provide your audience with value if you want your advertising to be effective for instance you provide an automated email marketing service in this situation a smart place to start is an online Network for experts in email marketing to pique interest and discreetly promote your product to the audience publish engaging pieces regarding email marketing growth techniques activation the value and happiness

a firm provides at this stage Mark the beginning of a connection with a consumer and whether or not that relationship progresses further down the funnel will depend on those factors the number of people who do a certain action such as seeking additional information subscribing to a YouTube channel or making a purchase may be used to assess activation the number of customers or users who have been activated would be divided by the total number of people that view the website or Etc to arrive at a formula that would be helpful at this point retention retention is

essential to economic success for any organization that wants to endure for a long time this is because the most significant measure of how much people value your product or service is retention depending on the pricing range of your goods attracting first-time buyers or customers may not be challenging because people make impulsive purchases every day a subsequent purchase or engagement however shows that the customer was satisfied and that the item or service matched their needs businesses use many techniques for measuring retention however such as annual recurring Revenue monthly recurring Revenue customer churn repeat purchase ratio and

time between purchases may be approaches to gauge client-based retention referral referrals are one of the last components of the pirate funnel it is crucial to remember that many graphic representations of the funnel include an arrow called acquisition that Loops up from the bottom back to the top and this is because a perfect funnel would be a loop or a customer cycle that keeps bringing in new clients while maintaining existing ones successful referrals may be especially crucial since they are a less expensive method of acquiring customers than traditional marketing and because of the impact of family

and friends they are frequently predisposed to Brand loyalty if individuals in their Circle are already customers there are no ideal measures for this statistic however several metrics such as number of active users sharing invites can assist a firm when they start tracking referrals many times people fail to mention that they were recommended or a user who receives an invite from a friend may take months or even years to activate nevertheless a good referral program may be demonstrated by reduced customer attrition sustained growth and overall program success Revenue although money is transferred earlier in the customer

life cycle Revenue may be unreliable if the preceding phases aren't completed and measured for this reason revenue is frequently shown as the last step in the pirate funnel rapid Revenue production is less important for a company's success than effective marketing and initiatives to keep customers and get them to recommend others the ability to track income correctly is essential for a business to succeed and while being aware of total revenue after cost is crucial it only represents a small portion of the full picture to get a full view of a company's success and make informed financial

decisions it's important to evaluate income across a variety of user product and service categories so far you've learned a lot about product management metrics and kpis so here's a question for you all which metrics would you prefer to measure a product if it's good to go or not do let us know in the comments below and if you have any questions regarding product management metrics or kpi then do let us know in the comments below thank you for being here and stay tuned to Simply learn hi there if you like this video subscribe to the

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