Top product metrics you can track
There are several categories of product metrics that can provide helpful information about various aspects of your business. Here are several of the most common types of product metrics you can set as your key performance indicators.
Product acquisition metrics
Product acquisition refers to your company's ability to sell a particular product in the first place. These are important metrics that will give you an indicator of whether your company is on track as far as producing products and preparing them for sale.
Key metrics to track: Acquisition rate, Customer Acquisition Cost (CAC), and bounce rate.
Designing and releasing a quality product that will offer an exceptional user experience and make your customers' lives better does not mean they will automatically know it exists or have any interest in purchasing it. Product adoption describes the process your customers will go through from first learning about your product to building interest in it to ultimately making a purchase. For an average customer, this process typically consists of four stages: the awareness, interest, evolution, and conversion phases.
Key metrics to track: Product adoption rate, time-to-first key action, and activation rate.
Product engagement metrics
Product engagement describes the various ways in which customers can interact with your product. Keeping track of these actions gives you an understanding of how to adjust your actions toward them to affect that behavior. Analyzing the steps your customers are taking over time can help you determine which products customers are sufficiently interested in and which ones you may need to increase your promotion of or consider discontinuing.
Key metrics to track: User engagement rate, number of active users - Daily Active Users (DAU), Weekly Active Users (WAU), and Monthly Active Users (MAU).
Customer satisfaction metrics
Although your company will receive the same profit from a specific purchase regardless of your customer's level of satisfaction, customers who are highly satisfied with their product, customer service, and ordering process are much more likely to become repeat customers than those that are not. This means that tracking customer satisfaction metrics can give you an idea of which customers may be among the most likely to continue to place more orders and increase your revenue over time.
Key metrics to track: Referral rate, Net Promoter Score (NPS), Customer satisfaction score (CSAT), and product return rate.
Customer/user retention metrics
Likewise, retaining as many customers as possible is key when it comes to increasing your overall revenue. Tracking which customers have placed multiple orders and factors that may be related to their decisions to do so can help you increase your ability to create a customer experience that results in an overall customer retention rate that is as high as possible.
Key metrics to track: Churn rate, retention rate, growth rate, and repeat purchase ratio.
Tracking and analyzing your revenue is key when it comes to determining how well your business is doing overall. Although your revenue and sales can be broken down into several of the above business metrics, studying your overall revenue and comparing it to that of past quarters and years is one of the most important steps you can take to gain a complete picture of your current business.
Key metrics to track: Annual and Monthly recurring revenue (ARR/MRR), Average Revenue Per User (ARPU), and Customer Lifetime Value (LTV).