What Product Management Metrics Really Measure

Understanding app health and customer experience go hand-in-hand.

While exact metrics and the prioritization of those KPIs differs from company to company, there are three key areas all product managers measure:

  1. Customer acquisition
  2. Retention and engagement
  3. Customer experience

Ultimately, measuring these different KPIs allows product managers to answer the question, “Why?” Why are app downloads down this month? Why are customers suddenly churning? Why are people abandoning their shopping carts?

When you keep a constant pulse on your customers through proactive feedback, you can gain a better understanding of where friction occurs in the customer journey and therefore quickly take action to improve that experience.

What Product Management Metrics Really MeasureCustomer acquisition

You can’t get new customers if people don’t trust your brand or product. And what people say and feel about your company, product, or service significantly impacts overall brand reputation. Third-party validation and peer recommendations matter more to people than a brand name alone when making a purchase decision. That’s why ASO and app downloads are directly impacted by the quality and frequency of your customers’ ratings and reviews. If you amplify the voice of your most loyal fans, you can resolve negative experiences quickly, and grow your customer base.

KEY METRICS:

  • Customer lifetime value (LTV)
  • App downloads or installs
  • Conversion rate
  • App store ratings and reviews
  • Cost to acquire a customer (CAC) or cost per install (CPI)
  • Return on ad spend

Increase customer acquisition by proactively prompting people to share their positive experiences in public channels. Prompt happy customers for reviews, and resolve issues directly with unhappy customers.

Engagement and retention

Converting customers into fans is one of your greatest opportunities for reducing churn, but consumers have no shortage of options to choose from when determining their loyalty toward brands. The key to reducing customer churn is to understand why your customers feel the way they do—especially when their emotions change over time.

When you accurately measure shifts in customer sentiment and behavioral changes, you can intervene at the right time and place before it’s too late. You’re then able to follow up with customer segments based on how they feel and turn detractors into promoters by implementing and listening to their feedback.

KEY METRICS:

  • Uninstalls
  • Retention rates/churn rates
  • Monthly active users (MAU)
  • Daily active users (DAU)
  • 90-day retention
  • Annual retention
  • Average order value
  • Repeat purchases

Engagement is a massive indicator of product success. No matter your industry, the primary goal of all products is to have highly-engaged customers.

Conversion and retention may be among the most ambiguous metrics to define, but they are also two of the most important. Understanding how to retain customers once they convert is what turns good mobile products into great ones, and it’s important to consider tracking metrics around conversion and retention as early as possible to help you understand your customers’ journeys.

Key Stat: Many businesses don’t focus on metrics past 90-day retention (marketplace average is 48%), and they don’t feel like they know enough to focus on annual retention (marketplace average is 35%).

Customer experience

Tracking qualitative in addition to quantitative feedback is the key to truly understanding – and therefore improving – customer experience. But the secret sauce comes from tracking this data over time. When you track metrics such as customer sentiment over time, you can then start to predict and act on shifts in sentiment.

KEY METRICS:

  • Survey response rate
  • Love Ratio
  • Net promoter score (NPS)
  • Customer satisfaction (CSAT)
  • Sentiment (Fan Signals)
Key Stat: A “good” NPS score typically falls between +40-50.

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