An Overview of Product Management KPIs
In product management teams, much like in other teams in an organization, Key Performance Indicators (KPIs) are used to create clear targets, guide decisions, celebrate success, and identify risks and issues.
A lack of KPIs in a product management team can result in a poor understanding of progress, difficulty in evaluating and learning from current and past work, and an inability to prioritize between different streams of activity when progress is off track.
It is usually up to the product manager to define these KPIs, depending on what they determine to be the most important metrics to track and report on.
Ultimately, product KPIs are the foundation for measuring (and improving) the success of the product and the product management process.
We here at Cascade understand the difficulty that product managers face when trying to define and write KPIs, this is why we wrote our How to Write KPIs: A 4-Step Approach article.
In addition to this, we also created a Free Product Management Strategy Template, for you to create your own KPIs to visualize how they fit into your overall business strategy.
The product manager's KPIs can cover a broad set of topics, which will largely depend on the nature of the product and the processes employed by the organization.
For example, if their focus is more on the product development, the KPIs could heavily lean towards the design and production of the product, but if the team also wants to recognize the customer impact, the KPIs could be more inclusive of usage and customer behaviors.
Ultimately, as head of the product team, they have to make a judgment call on the KPIs that matter, but this should be heavily guided by the top-level objectives of the organization.
Product Management KPIs
We've compiled a series of KPIs as examples. If you've seen any of our other KPI examples, you'll notice that we try to provide a wide range. Depending on your particular focus, you may find that some are more relevant to you than others.
A pro tip from Cascade is to make sure you have a good mix of both leading and lagging KPI's.
Business Performance KPIs:
These types of KPI can sometimes get overlooked, as they are not always seen as directly related to the management of the product.
Having business performance KPIs will help you spot trends in business activity and behavior before another business unit comes knocking on your door!
These KPIs focus on customers, customer lifetime value (CLTV), revenues, profitability, and costs. Plenty of these KPIs will be present in other departments, as these numbers are often important to many parts of an organization.
This metric can be used to measure overall customers, or could also be focused on customers using a certain feature to measure its engagement.
It can also be used to understand growth requirements, as the customer count can affect the operating capacity (this applies particularly to a SaaS scenario).
Example: Increase the customer count for X feature by 20% before XX/XX/XXXX
This metric will help you understand where the product sits against the competition. You can track this through various services like Ovum, Forrester Research, and Gartner. Cascade Strategy, as an example, shows up in this G2CROWD grid [we're the market leaders btw :) ].
Example: Increase our market position by 3 places in the Gartner Magic Quadrant™ by XX/XX/XXXX
We've talked about the Net Promoter Score (NPS) in our Customer Service KPI piece. The NPS is a measure that helps understand how delighted a customer is with your product and service. From a product perspective, this can help guide product development and new features.
Increase our NPS above 40 by XX/XX/XXXX
These KPIs will help you understand how customers engage with your product. This will then help guide decisions further down the line in terms of how you manage the functionality and features that make it on to your product roadmap.
The more you track and report in this space, the better informed you will be about where and how to improve the product.
Tracking monthly users will help you recognize adoption trends but it's also a useful number to help plan or encourage growth and ensure that a system can scale as volume grows.
If your product doesn't lend itself to measuring it this way, maybe you can look at the number of units sold (including each model or variation) track what customers are engaging with?
Examples: Increase monthly users to 3400 by XX/XX/XXXX
Average number of sessions per user:
This metric is focused more on engagement, as in most products, the frequency of use is often a good sign that the product is being adopted as it was intended.
Example: Increase the average number of sessions per user to 10 per month by XX/XX/XXXX
Users per feature:
This metric is particularly suited to software, and could be used to measure a feature launch or to monitor certain features and decide if they will be further developed or deprecated.
Example: Increase monthly users of the reporting features to 5000 by XX/XX/XXXX
Time to X:
Measuring how long it takes for users to perform a certain action can help understand how they interact with that process. This could be applied to specific transactions or goals that we want users to achieve with a product.
In most cases, slower 'time to x' will indicate friction and usually increase support requirements.
Example: Reduce time to onboarding completion by 40% by XX/XX/XXXX
Product Development KPIs
Product development KPIs can help with recognizing process improvements and speed of development.
Tracking and sharing the results from the team can create new energy and competitiveness while ensuring that any gaps in development are picked up before they become significant issues.
This is where you track performance against deadlines. For example, for a software development team, this can help them stay accurate in their production and testing estimations.
Tracking this will allow you to assess and improve the predictability of delivery (to increase business and customer confidence, and enable dependencies to be managed more effectively), and also to encourage the team to properly understand the causes of timeline issues (which is necessary if they are to identify which things need to change).
Example: Maintain on-time delivery above 98% in 2020
Effective resource utilization:
Tracking your effective resource utilization will help you get maximize the quality of output from a given amount of resources. By effective utilization, we mean the proportion of time your team spends delivering your core product(s) - you will decide which activities count as "core" and which don't.
We know that product teams get pulled left-and-right to be involved in things because of their subject matter expertise, and "investigating" possible products and features that just aren't likely to add much value, so it's important to maintain focus on the actual product.
Example: Maintain effective utilization above 90% in 2020
Velocity in a team is calculated through the number of units of work completed per interval. A team could work on a weekly sprint where they aim to finish stories or units in each sprint.
This is particularly helpful in project-based product development (frequently seen in software production), as a way of estimating and tracking activities, allowing us to build more predictable roadmaps.
Example: Maintain velocity over 35 units per month in 2020
Product Quality KPIs:
Tracking product quality will help you recognize any risks that may stop you from delivering amazing customer experience. A product manager will need to weigh tradeoffs between quality and delivery timelines.
Remember that a negative experience in any scenario can have a bigger 'echo' effect than a positive one, especially if the customer experience team fails to respond on time.
It's more likely for an unhappy customer to jump on social media before an organization has a chance to try and fix the problem, so ensuring that quality control is tracked can minimize this.
Number of support tickets:
Support tickets do not immediately mean that there is a quality concern, as it could depend on the situation (a new version of a product is released with new features so there is a learning curve).
It is still a good indicator of consistency, and unless something significant changes in the product, the number of tickets per customer should remain steady, or gradually reduce with product improvements.
Example: Maintain no. of support tickets below 400 a month in 2020
Number of support ticket escalations:
Here you could measure only situations where the first line of support was not able to resolve an issue. This could mean a product's quality is more compromised or that particular faults persist.
Example: Reduce no. of ticket escalations to less than 20 a month by XX/XX/XXXX
Testing can cover anything from testing units, features, systems, and automation. You could look at the number of failed tests, or the percentage of success, depending on where the focus needs to be.
Example: Reduce % of unsuccessful systems test to 5% by XX/XX/XXXX
There you have it! This is by no means a comprehensive list of metrics you could be tracking during the product management process, but it is certainly enough to get you started with some ideas.
As per all our KPI guides, this is just an example of what you can measure, and ideally, you should really create your own KPIs from scratch. If you're struggling with this, be sure to check out our guide on How To Write KPIs.