Top Product Management Metrics and KPIs to Track in 2023
Published: 2023-04-29 15:06:14

Many successful products such as Uber, Amazon, Spotify, and Netflix prioritize data-driven product management, and we can see the results they’ve gained from this approach. Product owners would have an overwhelming amount of data as soon as the product is launched. But many [analytics tools](https://dev.to/urlaunched/why-do-you-need-to-use-app-analytics-in-startups-4h4k) are available in the market; they naturally struggle with identifying the right metrics. 

Read to know about the most important metrics and KPIs that can help you quantify the progress of your team, product, and overall business, to succeed. Meanwhile, just knowledge can never be enough. It is equally important to correctly interpret the results and initiate supporting actions to spark the change.

## Key Metrics and KPIs for Product Management

Product teams require metrics – a specific number or data-centric criteria – to set goals, identify risks, and make effective decisions. A couple of points to keep in mind are –

- While every KPI is a metric, not all metrics are KPIs.
- Metrics track workflows and processes, while KPIs track measurable business outcomes. 

Out of many available metrics in product management, let’s explore the main product metrics and KPIs that can guide your product development. 

**Product Quality KPIs**
These metrics can help you evaluate the effectiveness and quality of a particular product. Some examples - 

**Support Tickets**
It represents the total number of customer calls, tweets, chats, or issues that need assistance from the support team.

Sub-metrics given below can provide insights into the support team’s overall efficiency and identify improvement areas.

- Average time required to resolve a support ticket
- Number of support tickets closed by a particular team member
- Total number of support tickets opened during a specific time period
- The number of support tickets reopened after being closed

**Defect Rate** 
Helps teams determine the number of defects per sprint or per release over the number of areas examined. If you reduce your attention to only one product, the rate will simply become the number of instances you see as defects. This might be the number of failures per execution or defects per thousand lines of code).

You need to have distinct classifications for defects to decide the questions like -

- Does an unexpected application crash count as a defect? 
- What if you need to rewrite some code!

Defects found earlier in the development cycle will help you minimize context switches and provide instantaneous feedback to the team. Defects found closer to release dates can sometimes impact the delivery date based on their severity and delay the release.

**Customer KPIs**
These metrics help you evaluate the loyalty and satisfaction of your company’s customers. Some examples-

**Customer Lifetime Value**
With this metric, you can calculate how much money you can possibly generate with a specific user in the long term, an average profit from the user before they cancel a subscription. Accordingly, you can also decide how much you can spend to attract a new customer at an early stage, regarding the potential profit from one person. 

To calculate it, establish an average duration of a customer’s lifetime (how long a customer uses a product before stopping) and average revenue per user.

CLTV = Average Revenue Per User * Average Customer Lifetime

**Number of User Actions per Sessio**n
This metric can help you- 

- Measure the critical actions that your users perform in a single session. 
- Know what percentage of new users complete those actions 
- To identify trends in user behavior over time. For instance, the decrease in the number of actions per session over time may indicate that users are finding it less valuable or losing interest in the platform.

User actions can include activities like filling out forms, clicking on links, leaving comments, making purchases, sharing content, or any other interaction with the platform.

**Business performance KPIs**
These metrics can help you evaluate how effectively your company can achieve its goals and objectives. One example - 

**Net Promoter Score (NPS)**
This metric gives you knowledge about your customer’s satisfaction with your product. Generally, to calculate the 
NPS, a company asks the customers to rate the likelihood of recommending the product to others on a scale of 0 to 10. 

Net Promoter Score = % Promoters - % Detractors

Here, customers can be classified into three groups:

- Promoters (9-10): Extremely satisfied customers, likely to recommend the product to others.
- Passives (7-8): Satisfied customers but not enthusiastic enough to recommend it to others.
- Detractors (0-6): Unsatisfied customers, likely to discourage others from using your product.

## Measure the Right Metrics KPIs to Have the Best Product
[Product management KPIs](https://www.simform.com/blog/project-vs-product-mindset/) are beneficial in making informed decisions and determining whether you are on the right track to reaching your business goals.

Not every company will have the same number of metrics and KPIs that they should monitor. Still, let's say we want to generalize it; then it should be sufficient to focus on approximately five metrics and KPIs that matter most to your business and customers.